Bargain basement: $1 million land parcel selling for $52,000

Who says you can’t find bargains on local land anymore?

A 5-acre parcel valued at $1.04 million is on the market in south Las Vegas for $52,000. That’s a 95 percent discount.

But don’t get too excited: This land is spoken for.

The Bureau of Land Management plans to sell the property, near Agate Avenue and Kimo Street south of Blue Diamond Road between Las Vegas Boulevard and Interstate 15, to the Nevada Housing Division. The division would build affordable housing for seniors.

It’s an unusual proposal. It would be just the third time a public agency bought federal land for affordable housing since the Southern Nevada Public Land Management Act made such deals legal in 1998, said BLM real estate specialist Michelle Leiber. The other two projects, Harmon Pines and Arbor Pointe, happened in 2006 and 2007.

Leiber said she’s not sure why more than five years passed before an agency requested more land for affordable housing, but she said it could relate to lower demand during the housing downturn.

One thing hasn’t changed, though. That 95 percent discount was standard before the bust. Harmon Pines’ 5-acre parcel at Harmon and Jones was valued at $3 million, and sold to Clark County for $198,000. And Arbor Pointe’s 10 acres, near the Las Vegas Beltway and Durango Drive, was worth $9.5 million when the county bought it for $475,000.

You have a vested interest in those asking prices, because proceeds from BLM sales go to the state’s general education fund, the Southern Nevada Water Authority, public parks, habitat conservation and the purchase of environmentally sensitive lands.

Joe DeSimone, founder of development and brokerage firm First Federal Realty DeSimone, said the cost cut seems too generous at first glance.

“My initial reaction is that a larger price could be paid, and the project would still earn a profit,” said DeSimone, who builds affordable housing for seniors.

To qualify as affordable, a one-bedroom unit could cost $500 to $662 a month, DeSimone said.

The state Housing Division’s Agate Avenue Apartments would have 182 units, for a land cost per unit of $285.

In comparison, DeSimone built out a 4-acre property with 255 units, and paid $8,000 to $9,000 per door for land, for a total of $2.3 million.

DeSimone said a 95 percent discount would make sense if the site needed environmental remediation, or if the state was up against caps on the dollar value of bonds it can issue for projects.

But BLM spokeswoman Hillerie Patton said there’s nothing wrong with the land. Rather, federal law requires the discount, a throwback to boom days when land and home prices soared.

That’s not happening anymore. The median single-family resale price in June was $175,000, down from $315,000 in June 2006, according to the Greater Las Vegas Association of Realtors. Condos and townhomes were even more affordable, at a median of $86,000. The average apartment rent was $748 in the first quarter, according to research firm Applied Analysis.

Still, the city has plenty of seniors who can’t afford what’s out there, DeSimone said. One project he’s leasing up is moving nearly one unit a day on average.

To qualify for Agate Avenue, a senior can’t make more than roughly $32,500 a year. That’s 60 percent of the local median household income, which the Census Bureau pegged at $54,174 from 2007 to 2011.

A city of Las Vegas report found that 21.7 percent of locals were 55 or older. Among seniors, the median household income was lower than average, at $43,256. And 42 percent earned less than $34,999 a year. But it’s also worth noting that 81 percent of local seniors own their home.

The area around Agate Avenue already has high-density development, including apartments, motels and an outlet mall. The complex would open in 2015.

The BLM sale isn’t a done deal. The public can weigh in through Sept. 16. Mail written comments to: BLM Las Vegas Field Office, Assistant Field Manager, Division of Lands, 4701 N. Torrey Pines Drive, Las Vegas, NV 89130.

Contact reporter Jennifer Robison at jrobison@reviewjournal.com or 702-380-4512. Follow @J_Robison1 on Twitter.