Auto dealers file suit vs. city

Kim Smith

Friday, Nov. 16, 2001 | 9:40 a.m.

The Courtesy Auto Mall Association, headed by Joseph Scala, has filed a lawsuit against the city of Las Vegas, claiming the company lost money when the City Council last month expanded the opportunity for new car dealerships to build in the northwest.

Scala operates an auto dealership and owns an additional 30 acres for future dealerships inside Town Center, near the corner of Centennial Parkway and U.S. 95.

Paul Larsen, who filed the lawsuit on behalf of the association and Scala, wrote that the association spent "tens of millions of dollars" designing, constructing and improving the property and infrastructure while relying upon the city's written policies and master plan.

When Town Center was created in 1996, the council adopted a plan that grouped all commercial uses into one area, near U.S. 95 and Centennial Parkway.

Until last month all new car dealerships were required to locate in the commercial zone, on land that is owned by Scala and a private landowner.

East Coast car dealer John Staluppi Jr. brought attention to the need for additional commercial land after he tried and failed earlier this year to negotiate a deal with Scala for a Nissan dealership.

Staluppi then attempted to open a dealership along Rancho Road, but his application was denied because the proposed business was not in a commercial zone. Staluppi has since filed suit against the city for denying the dealership. He has also sued Councilman Michael Mack, alleging that Mack tried to broker a deal between Staluppi and Scala.

After hearing concerns from developers that Scala had a monopoly on commercial land in the northwest, the council designated parcels for car dealerships. Scala's attorneys opposed the proposal to expand the zone, saying it was unfair to Courtesy's investment.

"The city's actions were arbitrary, capricious and an abuse of the city's discretion in that these actions were not based upon or supported by substantial evidence in the record," Larsen writes.

As a result of the city's actions, the association has lost the money it sunk into the improvements, and the land itself has lost value, the lawsuit states.

Larsen is asking District Judge Jeffrey Sobel to force the city to maintain the status quo within the Town Center by reversing the council's decision to expand the commercial use. Larsen is also asking for the city to pay damages.