Course rocky for Rio golf course

Bill Gang

Tuesday, Oct. 6, 1998 | 11:10 a.m.

Will homeowners around the Seven Hills Golf Course in Henderson get to play at the exclusive facility or will they be relegated to watching casino high rollers tee off?

That decision is now in the hands of District Judge Mark Gibbons. The nonjury trial concerning the controversial golf course began Monday with opening statements in a courtroom jammed with frustrated and irate residents as well as a legion of lawyers.

At stake could be millions of dollars, including the Rio hotel-casino's $33 million investment in the golf course that the Rio has said it wants to limit use to hotel guests and gamblers.

Lynde Selden, attorney for a group of homeowners, complained that his clients bought houses with the understanding they would have access to what was billed in advertisements as a high-end golf course that would be open to the public.

Many homebuyers were given disclosure statements listing the golf course -- yet to be completed at that point -- as a public facility.

Developers complained that they bought parcels within the master-planned community and built projects that they sold to people looking for a "golfing lifestyle."

Steve McKinley, who represents the Helmer Company of Nevada, told the judge his client was urged to take that approach by the Silver Canyon Partnership that developed the Seven Hills project.

"Now Helmer is trying to sell homes in a golf course community that is no longer a golf course community," McKinley said.

Attorneys for other developers told similar stories.

The original concept went sour when the golf course developer ran out of money in 1995 and the Rio, which is now owned by Harrah's, stepped in to salvage the project and eventually assume full ownership.

The Rio declared the course to be private, but a flurry of lawsuits resulted in an agreement that it would stay public pending the outcome of this week's trial. The catch, however, was that green fees would be $300 a round -- second highest only to Steve Wynn's Shadow Creek course in the county.

Attorneys for the homeowners and developers originally asked the court for an order to keep the course public, but that has changed. Now they want the sale to the Rio to be declared illegal and the golf course turned back to its original owners.

Gibbons repeatedly asked how the Rio could be compensated for its investment if he gave that order, but he got no definitive suggestions.

Elizabeth Gonzalez, who represents Capital Pacific Homes, said the Rio may just have to suffer the loss because it took a risk in buying the golf course while knowing a legal storm was brewing over access.

She suggested that an option might be for Gibbons to order that the course be a public facility and reasonable rates for green fees be set.

The Rio's Los Angeles attorney Richard Levy conceded that many home builders and home buyers were told the golf course would be open, but he said that was contradicted by the covenants, conditions and restrictions -- commonly referred to as CC&Rs -- signed by all the parties.

Those CC&Rs, Levy said, spelled out that the golf course was privately owned and access could be denied to the residents or the general public. He added that if anyone made promises to the contrary they were misrepresentations that don't legally bind the Rio.

Levy noted that documents indicated the course, in fact, might never have been completed without the Rio and legal agreements opened the door to the possibility the course eventually could have been divided into more home sites.

Because of the original owners' financing problems, Levy said that had the Rio not stepped in, "you'd be looking at a half-finished course today."

Levy said that even without public access, the Rio's completion of the course has benefitted residents overlooking the facility and they should be grateful.

The statement brought groans from the homeowners in the courtroom.

"I understand we're the bad guys here," Levy continued. "But the Rio spent a fortune making it into a gorgeous golf course."