Council faces golf course dilemma

The Las Vegas City Council will have to decide next Monday whether to sell 160 acres of land adjacent to a waste-water treatment plant now for $894,000, or wait 50 years until the land is developed as a golf course and worth an estimated $36 million.

The council's Real Estate Committee decided Tuesday not to offer any recommendation to the full council with respect to the proposed sale to The Walters Group.

"This is an interesting dilemma," said Councilman Arnie Adamsen, who presided over the meeting alone due to the absence of Councilman Gary Reese. "Both (options) have advantages and disadvantages."

Negotiations with The Walters Group began in November 1998 for land at Stephanie Street and Vegas Valley Drive, which the city purchased for $780,000 in the 1970s to serve as a buffer zone from the neighboring Water Pollution Control Facility.

David Roark, manager of the city's Real Estate and Asset Management Division, said the buffer zone helped distance the plant from housing developments and helped absorb odors from the facility.

Due to its situation on a high water table, however, the vacant land was often subjected to run-off and spills from the treatment facility. That run-off could possibly have contaminated portions of the land, Roark said.

The Walters Group is currently leasing the land and constructing what Roark considers the only use for the parcel -- a golf course.

In addition to remaining as a buffer between the plant and houses, the Royal Links Golf Course could also result in increased home values and tax bases in the area.

The land was appraised in December at $560,000. Due to a 50-year lease on the property, however, the golf course would revert back to the city at the end of the lease term -- and any potential buyer at that time would need to buy back the lease agreement along with assets.

Staff of the Real Estate and Asset Management Division reeled off the mathematical computations in a memo to the Real Estate Committee, comparing a sale now to the value of holding onto the land.

The bottom line: The amount the city would receive from the lease over 50 years was added and converted to a net present value of $732,334. The projected value of the golf course at the end of the 50 years was converted to a net present value of $161,398 -- bringing the negotiated buy-out price to just under $894,000.

Roark recommended the city accept the deal and take the $894,000.

Adamsen, however, wasn't so sure because of the conservative estimated end value of the course -- $36 million -- or up to $60 million if interest rates hold at 5 percent for the duration.

"What's the better deal?" he asked, before deciding that the City Council should debate the issue.

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