By Michael Weissenstein
Review-Journal
August 20, 2000
On the last day of February, a prominent Nevada lobbyist's company told Clark County officials that profitably
developing thousands of acres the firm owned 60 miles north of Las Vegas would be a practical impossibility.
"I don't think in my lifetime, or at least in the next 10 years, you're going to see any kind of development
out on this particular property," Reno lobbyist Harvey Whittemore's hired land expert told the county's Board
of Equalization.
Agreeing that the land's uses were limited, the five-member board slashed the property tax bill of Whittemore's
Coyote Springs Investment group by nearly $40,000. The unanimous devaluation vote also improved the company's standing
with the Internal Revenue Service, Whittemore said last week.
Board members didn't know that Whittemore had already begun planning to build Nevada's largest master-planned community
on the land.
Coyote Springs had hired a Las Vegas planning consultant in October to help the firm apply for county permission
to develop a golf course and clubhouse on its holdings.
And a letter written by Coyote Springs Investments' general manager in April 1999 detailed the company's proposal
"for development of recreational uses, including without limitation, a golf course or golf courses ... large
lot (10-40 acre) residential development and recreational open space," on the land.
The 42,800-acre project straddling northern Clark and southern Lincoln counties will encompass 10 championship
golf courses and as many as 50,000 homes, company officials say.
It is expected to produce as much as $500 million in revenues over the next 50 years.
Whittemore hired appraiser William Kimmel in January to produce a private estimate of the land's worth, which the
equalization board accepted at face value a month later. Coyote Springs officials never told the appraiser about
the April letter or their plans to file the county golf course and clubhouse application, Kimmel said last week.
Kimmel said he almost certainly would have appraised the land at a higher value if he had thought the property
could be profitably developed in the near future.
"No question about it," he said. "It sure could be more valuable."
The equalization board's vote based on Whittemore's private appraisal slashed $4.08 million off the official taxable
value of Coyote Springs' 13,310 acres in Clark County. Also, if the board had upheld Clark County's initial appraisal,
the IRS could have factored the number into a complex formula allowing the agency to ask for more taxes on the
firm's 1998 sale to the Southern Nevada Water Authority of $25 million of water rights from the Coyote Spring Valley
land, Whittemore said.
But the company's ongoing plans and proposals for the land were irrelevant to Kimmel's appraisal, Whittemore said.
The land's value increased only after the Clark County Planning Commission approved the golf course and clubhouse
development permit in June.
"At the time that the appraisal was done for tax purposes, we did not have approval of the special-use permit
which allowed us to build the golf course and the village center," Whittemore said. "Since that time,
we have acquired such approval and our position is that the value of the land is going to be substantially higher."
Coyote Springs Investment officials planned to present their own appraisal to Lincoln County officials but cancelled
their appeal, Lincoln County officials said.
Before Kimmel began his appraisal, Whittemore's attorney told him that federal law prevented everything but industrial-type
uses on almost half of the land in Clark County, which Congress had originally traded away to a defense contractor
for use as a rocket-testing facility.
"It cannot be used for anything except roadways, open space and, as I recall, manufacture or assembling of
rockets," Kimmel said he was told. "It couldn't be used, for, let's say, homes ... If I was misled I
sure wouldn't be happy about it."
Based on that understanding, Kimmel on Feb. 28 estimated the value of Coyote Springs Investment's holdings on the
Clark County side of the Coyote Spring Valley at an average of $57 an acre.
The company filed its application to develop a golf course and related facilities on March 16.
Whittemore's attorney, Dean Zerbe of Reno, could not be reached for comment last week. County Board of Equalization
members declined to comment on the case without conducting a detailed review of the facts.
Under Whittemore's interpretation, federal law allows golf courses and homes on much of the land only if a local
government first approves development on adjacent land not subject to federal restrictions.
In fact, Whittemore said, he received a second private appraisal late this week that estimated the land's value
at between $500 and $800 an acre.
The land will almost certainly be reassessed at a higher value next year, county officials confirmed.
The lands' differing valuations comprise the latest chapter in the long, complex and controversial history of the
Coyote Spring Valley land.
Under a congressionally mandated land trade, 42,800 acres of Bureau of Land Management holdings were traded to
the Aerojet corporation in 1988 for use as a rocket testing grounds.
The land was federally appraised at a value of $2.6 million.
The Sacramento, Calif.-based defense contractor never developed the acres for their intended purpose, instead selling
them to a company controlled by Whittemore's family for $15 million in 1986.
Two years later, Whittemore sold the Southern Nevada Water Authority water rights associated with the land for
$25 million.
Earlier this month, he announced his intention to build a master-planned community larger than Las Vegas' Summerlin
on the land. News of Whittemore's plans sparked outrage from environmentalists and land-exchange critics, who say
that taxpayers were shortchanged in the trade. Critics also charge the project will devastate thousands of acres
of pristine desert tortoise habitat by extending urban sprawl into the northern reaches of Clark County.
Under the 1988 trade, the South Florida Water Management District received 4,600 acres of an environmentally sensitive
Aerojet rocket testing facility, which the utility converted into a public park.
"We got a better deal," said Bill Helfferich, the district's land acquisition plan coordinator. "At
least it's not more of downtown Miami."
(c) Copyright Las Vegas Review-Journal. All rights reserved. To see more of the Las Vegas Review-Journal, or to
subscribe to the newspaper, go to http://www.lvrj.com