Suit against Tuscany dismissed

Jeffrey Libby

Thursday, Oct. 31, 2002 | 9:22 a.m.

A civil lawsuit that contests a Henderson redevelopment deal worth up to $40 million in public money was dismissed Wednesday because it was filed too late.

But Henderson resident Tom Hantges, motivated in part by an unrelated racketeering suit filed against him, said he will appeal the ruling by District Judge Michael Douglas to the state Supreme Court.

Hantges alleges that the Henderson Redevelopment Agency broke state redevelopment laws in April when it approved developer Commerce Associates for up to $40 million in city aid to help build a 525-acre golf course community at an old gravel pit in eastern Henderson.

Las Vegas Strip developers Barry Fieldman and Bob Unger, managing partners of Commerce Associates, defended the project, known as Tuscany, Wednesday. They called it a classic redevelopment agreement.

A private developer, in this case Commerce Associates, agrees to put up money in advance for public infrastructure through a blighted area, Unger said, and then, as houses are built and property values improve, the city gives back to the developer an agreed-to cut of new tax revenue created within the redevelopment district.

"Hantges' lawsuit is holding us up," Unger said. "He's just upping the ante to try to settle another case."

Unger and Fieldman said Hantges' lawsuit is an attempt to force a settlement in an unrelated federal court case filed by Commerce Associates investor Rolland Weddell. The suit, filed by Weddell and others in 2001, accuses several parties, including USA Capital, and Hantges, who is CEO of the mortgage company, of racketeering.

Weddell, for his part, is being sued by the majority owner of Commerce, Tom Gonzales, for allegedly embezzling more than $10 million from Commerce at or around the time he declared bankruptcy for two companies in debt to USA Capital.

"That's 100,000 percent (expletive) correct," said Hantges, when asked if Weddell's suit against him had prompted his suit against Henderson. "But that does not change the merits of my lawsuit.

"Tell them the Henderson City Council was hoodwinked," Hantges said. "The council relied on staff recommendations and those recommendations were materially false and misleading, because when Commerce Associates bought the property, it wasn't blighted. If you want to go back to Biblical times, maybe, but not when they bought it."

Hantges filed his lawsuit against Henderson in May, arguing that when Commerce Associates bought the former gravel pit in January 2000, it had been zoned for homes for several years, the majority of the operation had been rough-graded, roads had been cut and 850 house pads fringed the beginnings of an 18-hole golf course. For that reason, it could no longer be considered a blighted property, Hantges said.

During the two years city staff planned and created the 850-acre Tuscany Hills Redevelopment Area, Fieldman and Unger sat on the city's redevelopment advisory board, with Fieldman as chairman part of that time.

Both developers abstained from votes on the project, but Hantges argues their dual roles as applicants and board members created a conflict of interest that was never disclosed in original redevelopment plan documents.

"If that was an SEC (U.S. Securities and Exchange Commission) document, forget about it," Hantges said. "They want full disclosure."

Henderson Mayor Jim Gibson said Wednesday that disclosures by the city and developers were more than adequate throughout the process. The developers also resigned from the board before a decision was made to give the development the city money.

Gibson also defended the city's decision to declare the property blighted. If successful, Tuscany could create $263 million in new tax revenue over 30 years.

"It has to be a priority of the city to reclaim that land and a lot of the surrounding land and it's no easy task given the industrial uses that were prevalent on much of that area," he said.

On Wednesday, District Judge Douglas didn't address the merits of the redevelopment area, instead narrowing the argument to the issue of timing.

"It all comes down to the wonderful little phrase of materiality," Douglas said.

He weighed only whether the April agreement outlining financing for Tuscany was materially different from the March 2001 ordinance that created the redevelopment area. He ruled there was no material difference, just "putting meat on the bones, so to speak." So the 90-day period for filing a complaint had long expired.

Hantges has 30 days from the written entry of Douglas' decision to file with the state Supreme Court.