NHSE Regents critical of UNLV’s $1.25B leasing plan for property near Strip

State higher education officials expressed strong skepticism over UNLV’s plans to enter into a lengthy ground lease on 42 acres of university-owned land near the Las Vegas Strip.

At a meeting of the Nevada System of Higher Education Board of Regents on Wednesday, several regents pushed back against UNLV’s proposal to enter into a 99-year ground lease for a mixed-use project that would generate $1.25 billion for the university. Several regents wondered if UNLV could get a better deal than the 99-year lease for the desirable land near the intersection of Tropicana Avenue and Koval Lane.

“I think it’s too soon,” said Regent Susan Brager. “It’s the wrong time with what’s happening in our state. I think there’s much more value in this land.”

Brager and Regent Stephanie Goodman both said it would be better to wait to enter into a lease after high-end projects near the land, like the planned Oakland Athletics’ $1.5 billion stadium, are built in order to see how those projects impact the value.

“The last appraisal was done in March of 2023,” Goodman said. “It just doesn’t seem prudent to move forward with an appraisal that was done prior to the building of a major stadium.”

UNLV’s response

UNLV bought the acreage in 2015 for $50 million and university officials said at the time the land could be used for a campus village or stadium project. But since the purchase, the land has been mostly vacant and costs UNLV $3 million annually on debt services, security and maintenance.

UNLV President Keith Whitfield defended the 99-year lease proposal since it provides “long-term significant, consistent and meaningful revenue” and was the most “advantageous” proposal submitted when a formal call for proposals was put out in 2022.

David Frommer, UNLV’s associate vice president of planning, construction and real estate, said the acres doesn’t do anything for UNLV and the proposed lease allows the university to “monetize” it and invest revenue back into UNLV.

He also said that the lease doesn’t put UNLV at risk for development costs and the university will get all the benefits from improvements made over the lease period.

The length of 99 years was a cause of concern for Regent Carol Del Carlo since she said no one at the NHSE meeting would be alive or able to oversee the full term of the lease.

Frommer said that most ground leases need to be long term in order to get a sizable investment. He said a 30-year lease would only attract a more retail or pad-style development approach. A longer term lease is needed for a higher density or high-rise development.

“I think when you start to get to the 99-year (lease) you’re going to find people are going to be willing to invest more capital, because the potential for the return is much, much higher,” he said.

What is planned for acres?

The lease for the 42 acres would be overseen by G2 Capital Development. Not much has been shared about the development plans for the acreage except that a mixed-use project would be placed there. G2 Capital’s website said the land is suited for hotel, casino or entertainment uses.

Frommer said there is no intent to place UNLV functions on the land.

Regent Heather Brown wondered if the G2 Capital’s plans are the best idea for the land and if it would be a good idea to place academic uses on the land. Whitfield said if UNLV needs to expand it would focus on its main campus along Maryland Parkway or on 2,000 acres it’s set to get in the northern Las Vegas Valley.

G2 Capital declined to comment on Wednesday’s meeting or the skepticism of the lengthy lease.

Next steps

The regents were originally supposed to vote on approving the lease during an April meeting but the power went out at the NHSE building before they could vote on it. Regent chair Amy Carvalho said there wasn’t enough clarity on the lease to vote on it at the meeting Wednesday and wanted UNLV to provide more information on it before the regents vote on approving the lease.

The regents should vote on approving the lease at their meeting in June.

Contact Sean Hemmersmeier at shemmersmeier@reviewjournal.com. Follow @seanhemmers34 on X.