Lawsuit seeks to sort out water rights for casinos, power plant

Grace Leong

Tuesday, Aug. 21, 2001 | 10:44 a.m.

The Primm family, which sold a casino entertainment complex to MGM Grand Inc. of Las Vegas, is now suing the buyer over water rights on 740 acres of casino property and surrounding desert land where a power plant is planned.

Primm South Real Estate Co. and partner Primm 120 Ltd. Partnership -- both owned by the Primm family -- took over as landlord of the Primm property after owner Ernest J. Primm died in 1981.

Primm South Real Estate and Primm 120 sued their tenant, MGM MIRAGE's Primadonna Co. LLC, in Clark County District Court.

The property in question is on Interstate 15 at the California-Nevada border, 35 miles south of Las Vegas. Primadonna was acquired in 1999 by MGM Grand Inc., now known as MGM MIRAGE.

MGM Grand's $590 million purchase included three hotel-casinos: Buffalo Bill's, Primm Valley Resort and Whiskey Pete's. It also included the Primm Valley golf club.

The land on which the casinos and golf course -- as well as the Fashion Outlet of Las Vegas shopping mall -- is sited is owned by the Primm Family.

Primm South said the lawsuit is an attempt to clarify who has rights to service the water requirements of its prospective tenant, Reliant Energy Power Generation Inc. Reliant plans to build and operate a power plant called Reliant Energy Big Horn that will need more than 200 acre feet of water per year, the suit said.

The casinos and the proposed 550-megawatt power plant, located on the east side of I-15 about a mile north-east of Buffalo Bill's casino, are part of the same 740-acre property in Primm.

Alex Flangas, Primm South's attorney, said the water title rights have to be clarified because some of the water permits were applied in Ernest Primm's name -- and should therefore to titled to Primm South -- because his property and his water rights were transferred to Primm South after his death in 1981. "This is not a battle over new water rights or issues," Flangas said. "There are long-standing title issues as to whether some of the water permits, which are in the name of Ernest Primm, should be titled to Primm South or Primadonna."

But regardless of how the lawsuit is resolved, both Primm South and Primadonna agree Reliant will receive the water, he said.

"Building a power plant is expensive. And Reliant, which has to assure its investors, is nervous about who has proper title to the water because it has to make sure it's getting water from the proper entity," Flangas said. "We want to preserve Reliant as a tenant and the lawsuit demonstrates to Reliant that we're getting things resolved."

Alan Feldman, spokesman for MGM MIRAGE, said: "We're hoping to get the matter resolved. The issue is over who legally owns the water rights and who gets paid for the water. We believe we have rights to the water."