Monday, Jan. 7, 2002 | 11:17 a.m.
North Las Vegas city officials and investors in a mortgage company's fraudulent scheme are deadlocked over what should happen with a half-built mobile home park.
The investors are trying to sell the 40-acre parcel on the corner of North Fifth Street and Washburn Road to recoup their losses. City officials say the permits to build the park are no longer valid and any developer would have to apply for them again before finishing the project.
Greenpoint Mobile Home Park, as the project is known, is the last of 44 loans handled by the defunct Harley L. Harmon mortgage company, which still has about 165 investors waiting to get back almost $7 million.
In 1999 the Harmon scandal prompted Nevada legislators to tighten mortgage broker laws.
Last April a federal grand jury indicted Harmon, a former speaker pro tem and Democratic majority leader of the state Assembly, on mail fraud charges. He is scheduled to go to trial in April and faces up to 355 years in prison as well as $17.8 million in fines if convicted.
Hundreds of other Harmon investors have received some or all of their money from other loans as other Harmon investments were liquidated. Those other loans totaled $23.9 million at the time the company was shut down by state officials in December 1997.
A buyer has offered $4 million for the Greenpoint site if he can build a mobile home park. Without the permit investors might only get $2 million for the land.
Jeanette Jarrett, a retired secretary who invested $25,000 in the park, is still waiting for her money and blames city officials for delaying a sale of the property.
At the Greenpoint site, gray utility hookup poles sticking out of the ground are the only signs that someone once planned to put 250 homes on the land.
For more than four years the site has remained untouched and has been left to deteriorate. Heavy iron gates adorned with a golden "GP" have been unhinged and lay rusting by the entrance, near a crumbling bathtub. Car tires line the streets elsewhere and graffiti has begun creeping up on the brick walls that surround the land.
"The city of North Las Vegas refuses to allow it to become a mobile home park," Jarrett said. "Don't they know how many people have been hurt in this thing?"
In 1995 city officials granted Greenpoint developers permission to go ahead with their project on the parcel, which was originally zoned for ranch estate homes on 15,000-square-foot lots.
But the permit expired in 1998, and city officials now argue that any developer would have to start from scratch and re-apply for the project, since the construction of a mobile home park is no longer legal on the land.
"We can appreciate that it's an unfortunate situation and many investors have dollars at risk," City Attorney Sean McGowan said. Nonetheless, the city has to follow its rules, he added. Besides, the investors could have applied for an extension of the permit before it expired.
The investors on the other hand argue that that the permit's expiration date should have been stalled when Las Vegas developer Bernie Chippoletti was appointed to oversee Greenpoint and other Harmon properties in December 1997.
They also say that more than half of the park is already developed.
"You've got a project that's half completed," Chippoletti said. "How can the city say you don't have zoning," or the permit, to finish the park?
Clark County District Court Judge Stephen Huffaker will hear the investors' complaints against the city this morning. A ruling will probably come in several days.
Chippoletti, who is asking Huffaker for advice on how to proceed, said he will follow the court's orders.
If Huffaker tells him to reapply for a permit to finish the project, he'll do it, even though investors would "take a big hit" as a result, he said.
The other possibility, and the one investors are hoping for, is that Huffaker will order city officials to honor the permits to build Greenpoint.
McGowan said he had researched the matter and not found any reason why Greenpoint's permit should still be considered valid by city officials.
Apart from the court hearing, the investors will also still get a chance to make their case to elected officials in North Las Vegas.
"This matter has not gone all the way through the city's processes," McGowan said.
Planning commissioners are scheduled to discuss an appeal of the decision by city officials that the permit is no longer valid at their meeting on Jan. 23. Should they agree with city officials, investors can still appeal to City Council members.
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