Friday, July 5, 1996 | 11:59 a.m.
and Steve Kanigher
The Howard Hughes Corp., already the largest private landowner in Southern Nevada, is using political juice to corner the local real estate market, some detractors say.
"That's an outlandish statement," said Hughes Vice President Mark Brown. "This is the hottest market in the country. Whoever's making those statements wishes their founder had purchased land in Las Vegas in the '50s like Howard Hughes did."
The alleged land grab began taking shape last month when Rep. John Ensign, R-Nev., called for a freeze on public-private land exchanges.
These exchanges involve developers who need urban property for home building. To get at that prime land, developers swap pristine parcels elsewhere that the federal Bureau of Land Management wants to protect.
Ensign, who says taxpayers are losing millions in the exchanges, called for a freeze on them until a bill he and Sen. Richard Bryan, D-Nev., introduced has a hearing.
One key portion of the bill would allow local governments, such as the Clark County Commission, to approve which developers get land to subdivide and sell.
The land freeze would presumably benefit Hughes because other developers would have to pay a premium to buy property Hughes controlled before the freeze went into effect.
"What it would be doing is limiting the additional supply of workable land," said UNLV Professor Keith Schwer, who directs the Center for Business and Economic Research. "Those people who already hold land would stand to gain."
The second advantage to Hughes would come if the County Commission is given authority to approve land exchanges. Rival developers fear Hughes' influence with the commission would give it first dibs at prime land that could be turned into upscale subdivisions.
Brown called the allegations "ludicrous." He said Hughes did not know Ensign was going to call for a land swap freeze.
"We're a victim of that, too," said Brown, noting that proposed Hughes projects also would be frozen.
He added, "We by no means control the commission. We participate in the process like everybody else."
Ensign said he wants regional governments to have the final say-so because the BLM "releases land without coordinating with the locals."
Whether a local government is susceptible to influence is out of his control, he said.
"You can't draft legislation on whether a local government is corrupt or not corrupt," he said. "You have to assume a local government is not corrupt."
Ensign said the part of the bill granting authority to local governments is in trouble anyway because Interior Secretary Bruce Babbitt opposes it.
Brown believes Hughes' competitors are sniping because Hughes was the first big developer in what has become the nation's most desirable real-estate market.
"We invested in this county 30 or 40 years ago," he said.
Hughes is the area's largest private landholder, with 27,000 acres -- about 20,000 of which is still undeveloped, county planners said. Hughes also is the highest taxpayer on vacant land, with undeveloped property appraised at $315 billion.
Even after a recent takeover by the Rouse Co. of Columbia, Md., Hughes owners will participate in future land sales and other profits during a 15-year period through Rouse Co. stock.
Del Webb is a distant second, with $142 billion in appraised vacant lands. But the company, which has made millions on adults-only planned communities, is looking for more land.
Del Webb wants to expand its holdings by 5,000 acres through a BLM land exchange that would give the federal government 3,500 acres of environmentally critical land and water rights in Churchill County and the Moapa Valley. Hughes, which sold land to Del Webb for Sun City Summerlin, has been closely monitoring the proposed exchange, BLM officials said.
Gary Ryan, acting assistant director for the BLM's regional office, said Ensign's proposed moratorium would apply to six pending land swaps.
Hughes is also proposing a land swap for 583 acres, but it's low on the BLM's priority list.
If there were a moratorium, Ryan said, Hughes could benefit because developers would have no place else to go for large, contiguous chunks of land needed for master-planned communities.
"One could argue that if a moratorium goes into effect and the bill passes, that's more money in their pocket," Ryan said.
Hughes could further benefit because most of the land exchanges being proposed are in unincorporated Clark County, where Hughes has substantial "political juice" with the County Commission, according to political insiders.
Some insiders say the county owes Hughes for backing a bill in the state Legislature that allowed the county to gain more tax revenue from Spring Valley and turn Summerlin South, a Hughes development, into a taxing district.
Also, Hughes has donated $25 million worth of land for Las Vegas Beltway right of way through Summerlin South.
One insider said Hughes could use its muscle with the county to manipulate the disposal of federal lands.
County officials discounted that, saying that 200,000 acres of undeveloped land still exist. They support the Southern Nevada Land Exchange Act because it would give the county a tool for controlling growth.
Ensign said
The development community, except perhaps for Hughes, is leery of a moratorium.
Robert Lewis, president of Lewis Homes, which is ranked eighth among vacant landholders, said he would prefer a short-term moratorium to study the process.
"The more land available, the prices generally will be lower, which makes it easier to provide affordable housing for people," he said.
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