Tuesday, Jan. 26, 1999 | 11:09 a.m.
Golf-course developer Billy Walters said he has not yet determined how he will set the rates for play at his new Royal Links Golf Course and has no immediate plans to offer reduced rates for residents.
Walters was relieved of his lease-mandated duty to offer lower rates to locals Monday when the Las Vegas City Council agreed to sell him the 160 acres he's been renting for the golf course, which is nearing completion.
Before the council agreed to the $824,000 sale Monday, by a 4-1 vote, Walters said he would consider offering reduced rates for residents if the city would lower its purchase price.
"If the city wants to change its position and reimburse me the money we've invested in the golf course, we'll drop the rate," Walters said. He said he's invested roughly $17 million so far.
But the council decided that the city price was fair and that it's better to have money in hand than wait 50 years to collect on what could either be a multimillion-dollar cash cow or an aging and practically worthless golf course.
"Using money today to build soccer fields and ball fields is this council's agenda," Mayor Jan Laverty Jones said before the vote, which earmarked the money for park and recreation uses.
The proposed sale sparked controversy last week after the city's price was published in news reports. Local golfers contended that Walters was getting a sweetheart deal, and at least one commercial land appraiser said the amount being offered was too small.
After years of odor complaints from county residents living next to the Water Pollution Control Facility, the city bought the land for $780,000 as a buffer zone to soak up the smells.
But the vacant plot drew vandals, litter and vagrants and suffered numerous fires before the city decided in 1997 to ask for 36 proposals to build a golf course on the site.
Only The Walters Group was willing to make the investment and entered into a 50-year lease with the city.
"I thought he was a sucker," Councilman Michael McDonald said. "You're going to develop a golf course next to a stinky sewer plant. God bless you."
Several residents told the council Monday that they disagreed with McDonald's assessment, claiming the land is worth far more than the $5,600 an acre proposed.
Mayoral candidate Steve Miller said Friday he would call 40,000 residents a day urging them to protest what he called a "sweetheart deal." In a news release, Miller said comparable land sells for $40,000 an acre.
After listening to one resident use similar numbers, an angry Jones said: "I know what ex-Councilman Steve Miller thinks is true, and I take exception."
"Land is worth what land is worth," Jones said. "You can speculate. Maybe someday this will be worth a lot of money. Maybe it won't."
David Roark, the city's manager of real estate and asset management, computed the fair present value of the land by adding its appraised value of $566,000 to the nearly $16 million Walters has spent on the course. An additional $1.2 million was added for incidentals and interest on the total $17.7 million amount was then compounded over the 50-year course of the lease to reach $161,398.
When the total lease payments of $732,337 over the course of the 50 years were added, the city got its sale price.
Independent appraiser Shelli Lowe told the council she used different discount rates and tinkered with some of the future lease payments to see whether she could get a better deal for the city.
"No matter how I did it ... it still supports the value that Mr. Roark came up with," Lowe said.
The city could not put the property out for bid or borrow against the land because Walters had the lease agreement.
Although Lowe said today it may have been possible for the city to borrow against the lease, she said the city would have had a hard time finding a lender for such a deal, given the 50-year length of the lease.
Any amount it could borrow "certainly wouldn't be for any more than the sale amount," Lowe said.
Councilman Arnie Adamsen called the sale price a "very good" offer but said he has a personal philosophy that the city should be looking further ahead in its planning.
Adamsen also said he was concerned about what the land would be worth in 50 years. He cast the lone vote against the land sale.
"There's no way we can control what's going to be in 50 years," Councilman Gary Reese said. "Mr. Walters won't be here in 50 years."
Calling it asset management, Councilman Larry Brown said selling the land would help "meet a need today that is dire today."
"I think we're being dishonest to say maybe we should wait 50 years," he added.
Walters disputed some of the claims one local golfer made about the availability of "affordable" golf.
"That's the biggest misnomer than has ever been stated," Walters said after hearing one man say he couldn't find a round of golf for less than $75.
McDonald said he doubted the sale of the land would have even raised anyone's eyebrows if not for the upcoming mayoral election.
"If this wasn't a political season, we wouldn't be going through this," McDonald said.