County, Wal-Mart battle over lease deal escalates

Thursday, June 10, 2004 | 11:25 a.m.

The fight over a planned Wal-Mart on county land has become increasingly antagonistic as county officials and the developer argue whether a legal lease exists.

County Aviation Department Director Randy Walker said Wednesday that no binding sublease for a 200,000-square- foot Wal-Mart Supercenter at Russell Road and Eastern Avenue exists, and therefore the county is under no obligation to honor a March 16 agreement, approved by the county commission, to build the store.

Other county officials cited at least four other technical issues that they say could be used to block the store.

County commissioners were surprised to learn last week that they had approved a sublease for Wal-Mart on airport-owned land and county officials have been trying to find a way out of the deal.

County commissioners approved the master development agreement with Marnell Carrao on June 4, 2002. On March 16, commissioners approved Marnell Carrao's sublease of the property to Wal-Mart, an action they later claimed they didn't know they were making when they approved the sublease.

The claim came despite the fact that the sole point of that day's agenda item was to approve the Wal-Mart sublease.

The agenda-item cover sheet shows that the approval is needed because Marnell Carrao planned to lease 20 acres of the 160-acre commercial site and the county was to split net lease revenue 50-50.

Wal-Mart was first mentioned on page 5 of the sublease.

County commissioners said no one told them that before they passed the agreement.

Chris Kaempfer, the lawyer for Wal-Mart, reiterated his previous points in the escalating conflict: his client has an existing, enforceable contract, and the county does not have a legal basis for blocking store construction.

He said the county's position that the commission must independently approve the sublease ignores the fact that the commission agreed to the lease amendments.

"The sublease is between Marnell and Wal-Mart and both Marnell and Wal-Mart acknowledge that the sublease is valid and existing," he said.

Marnell Corrao's Guy Amato, vice president of business development and marketing, said earlier this week that the sublease was in effect. Wednesday, he said that because of the legal issues involved, the public March 16 agreement would have to serve as the company's formal comment.

Publicly, all sides say they want to avoid a court battle. Privately, they agree that a potentially protracted and expensive lawsuit appears increasingly likely.

"We have every hope that we can work things out through continued meetings with the neighborhood and the county staff," Kaempfer said. Nonetheless, "Wal-Mart's position is clear. We have an assigned sublease. We have approvals of staff, the town board and the planning commission.

"The only thing before the county commission is the design review on our site," he said.

Kaempfer added that in his extensive land-use work before the county, design reviews have not been used to block a project completely.

Walker, who received direction from Commissioner Rory Reid on Tuesday to fight the construction, said the Wal-Mart is not a done deal.

"The only thing that's been approved has been the lease between the county and Marnell Corrao," he said. "There are a lot of issues here that are unresolved."

Walker and other county officials cited at least three other options that could stop the store construction:

The options outlined by county officials, he said, "have no legal weight. None."

The issue of the Wal-Mart at the site was relegated to the back burner until last Wednesday, when residents and at least one official from a union at odds with the retail giant protested the proposed design of the store -- and asked the commission to scuttle the project altogether.

Kaempfer noted that the commission's March approval of a revision to Marnell Corrao's master lease specifically included numerous references to Wal-Mart.

But county commissioners, among them Reid, said they were not aware that they were approving a Wal-Mart or other big box store.

Kaempfer said county officials must have realized that such an approval was on the table.

"There is no secret. There never was any secret," he said. "The designs for this project were included as part of the traffic study that was submitted to Clark County and approved by Clark County. They show two 'big boxes' (stores like Wal-Mart)."

The 20 acres, part of a larger mix or airport operations and retail services on 155 acres of county-owned land, were "designed for that purpose," Kaempfer said. "That design was approved by the airport and submitted to the county and approved by the county.

"We have an approved traffic study and that approved traffic study includes 600,000 square feet of retail operations," he said.

Reid disagreed. For the commissioner, who represents the area, the key issue is not the county's previous approvals, zone changes and other moves, but the compatibility of the Wal-Mart to the nearby residential areas.

"There's no question that his property has been zoned C-2," a county land-use designation that allows a variety of commercial operations, including large retail stores, Reid said. "That does not mean that a developer has the right to build a 200,000-square-foot retail facility within 340 feet of a neighborhood.

"It may not be possible to make a development of that intensity compatible with that neighborhood," Reid said.