Landowners attack eminent domain

Tuesday, March 9, 1999 | 11:10 a.m.

CARSON CITY -- Gary Bruno says he had the foresight to buy potentially valuable property in Clark County that was later condemned for the Las Vegas Beltway.

But because of the laws of Nevada, he may end up a loser on the deal.

Bruno and attorneys for other property owners urged the Assembly Judiciary Committee Monday to change the eminent domain laws to protect owners from suffering losses from delays.

But representatives of governments argued that property owners are fairly compensated now and any change in the law would cost taxpayers millions of extra dollars.

Bruno told lawmakers delays in the current system have cost him.

Twenty years ago, Bruno purchased 2 1/2 acres from the federal government for $20,000. The county began condemnation proceedings for the beltway in 1992, but it took 2 1/2 years before a district judge ruled Bruno should get $500,000 for the property, a value set as of the beginning of the trial.

The case was appealed to the Nevada Supreme Court, but in the meantime Bruno paid $65,000 in capital gains taxes on the sale.

The Supreme Court ruled that Bruno's land should be valued at 1992 prices, less than the $500,000 Bruno received.

Bruno told lawmakers he doubts he will get a refund on the taxes he's already paid on the higher amount. His lawyer, Kermit Waters of Las Vegas, added that the delays decrease the value of the property through no fault of the property owner.

Assembly Bill 287 would set the value in such cases as of the date of the new trial.

Laura FitzSimmons, attorney for landowners, asked for the change in valuation date, noting that property increases in value through the years and the landowner is not fairly compensated for that appreciation. She said the landowners have been the victims of "hardships and unfairness."

FitzSimmons also asked the committee to require governments to pay interest based on prime rate plus 2 percent, the same as is awarded in other civil cases. Currently, governments are required to pay an interest rate pegged on Treasury bills, which can be 5 percentage points less.

But Brian Hutchins, chief counsel for the state Department of Transportation, said the bill would mean "enormous fiscal impacts" on the agency. He estimated it could cost the state up to $14 million a year.

Hutchins suggested that the bill would turn things "lopsided" in favor of the property owner. The government now makes a deposit of the estimated property value at the beginning of the case, he said -- a value estimated by the state appraiser. That money earns interest at Treasury rates, and the property owner can withdraw and use the money, he said.

Changing the dates and interest rates would cost too much, he said.

Mark Wasser, an attorney who represents Las Vegas in eminent domain actions, also opposed a section of the bill in which the property owner would have to be compensated for loss of "good will" when his property is taken. "That's a very expensive proposition," he told the committee.