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The Federal Bureau of Land Management expects to make 2 billion dollars next year in revenue from public land. The outright sale of those lands is the agency's second largest source of income next to onshore mineral leasing. For a decade it's been criticized as selling and trading these public lands to developers for below value. As KNPR's Ky Plaskon, the nation's largest land management agency is making changes.
BLM APPRAISALS SOQ 6:00
The BLM, with it's 261 million acres of land has always been the go-to agency for developers according to real-estate agent Jim Dunn of Dunn Properties
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It's almost like being held hostage, if you want to play the game, if you want to have some lands to develop or land for inventory, then they just about have to come from the BLM or the Department of the Interior.
The way they got that land was by trading. Developers would buy land valuable to the public for its environmental or cultural value and offer it to the BLM in exchange for developable land near urban areas. But,
There was some real pillaging that went on in some of those deals.
Dunn says in some of these deals the BLM in Southern Nevada ended up buying land that wasn't valuable to the public at all.
There was a sense of exclusivity . . .
Mike Ford Southwest director of the Conservation Fund a national organization that negotiates land deals between private and public entities, says developers also got fed up with land speculators buying sensitive lands and the BLM only dealing with the few owners of those lands for the prime pick of exchanges.
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People feel like the BLM may have acquired land that wasn't worth the same amount as the land they disposed of but I am not sure that is the case totally, but it sure was a perception that plagued the program.
At least some of these perceptions have arisen from reports by the General Accounting Office and Congress since 1987. The reports say BLM's property isn't going for fair market value in exchanges. And more recently the Appraisal Foundation - a national group of appraisers found significant faults in BLM's appraisal process. James Hughs, Deputy Director of BLM's Policy and Programs says there was a conflict of interest between appraisers and supervisors and the agency didn't make changes for fear of piling more time on to the already 15 month to 3 year land exchange process. Nevada let the marketplace take over.
No, you folks through delegation decided that the Southern Nevada Public Land Management Act decided that this is the way to go and that would get you away from these kinds of problems.
The act, passed in 98, allows the BLM in Nevada to run auctions and use the funds to buy land instead of exchange. Since then it's sold almost three quarter billion dollars worth of property around Las Vegas.
But one problem that's still evident is undervalued appraisals. Since the passage of the Act the BLM has sold 6 thousand acres, most for 160 percent above BLM's appraised value. In one case, BLM appraised a property 300 percent below what developers feverishly bid.
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In that case, appraisals are used to set the floor to tell us what a reasonable price would be in a sale.
But in the last 8 months the BLM's average appraisals have risen from 57 thousand per acre to 130 thousand . . . and at the auction last week, property went for only 27 percent higher than BLM's appraisal. Ford of the Conservation Fund says BLM appraisers are catching on to the actual value of public land in its trust.
What will happen over time is that BLM will factor in those higher sale prices and subsequent appraisals will actually go up.
Nonetheless, BLM's appraisals in Southern Nevada to date have not taken into account road frontage for instance. But, Hughs of the BLM says, what's important is that the BLM will be getting out of the appraisal business. Earlier this year it released a report to the Department of the Interior recommending changes that will ensure land exchanges are properly appraised throughout the nation.
And we did a study of our work force and something like 60 percent of our appraisers work force is within 5 years of retirement so the idea is that we will contract out more appraisers.
Despite the problems Southern Nevada's auctions have eliminated for the BLM, he says other cities around the nation aren't offered the luxury of land auctions because other communities aren't growing as fast as Southern Nevada.
Ky Plaskon, News 889, KNPR