Las Vegas Sun

March 29, 2024

County may change way airport sells surplus land

A recent controversy involving a land deal between the Clark County Aviation Department and a local developer has sparked a familiar litany of suggestions of back-room deals and residents hurt by new commercial development next door.

The most recent deal involves a two-year-old land swap between developer Scott Gragson and the airport in the Cooperative Management Area, a swatch of 5,300 acres west and southwest of McCarran International Airport given by the federal government to the county in 1999.

Complaints about the deal have prompted a county audit of both the circumstances surrounding the swap for land at Windmill Road and Durango Drive and the Aviation Department's policies for such deals.

Controversy over land deals around the airport already motivated the Clark County Commission last year to require all such deals to come before the commission in a public hearing

Thursday, County Manager Thom Reilly said the county may abandon land swaps altogether in favor of straight auctions of the land in the Cooperative Management Area.

"I'm leaning that way," Reilly said, although he added that a decision may have to wait for the results of the audit.

"The last several land trades have been very controversial," he said. "The perception of it surely is negative."

Reilly noted that 90 percent of what the county acquired in the federal giveaway, an action taken to avoid future complaints about noise pollution from aircraft taking off and landing, has already been sold, traded away or leased.

"It's not worth the controversy," he said. "An auction is pretty clear cut."

In the most recent controversy, residents near property at Windmill and Durango said they were promised that the 38 acres traded away by Clark County to a Las Vegas developer would be for a cemetery.

The issue, however, points out the sometimes complex nature of land-use issues generally, and the problem of perception involved when developers and the county work together. One point on the specific Windmill and Durango deal remains, and contradicts media accounts: The deed for the land never included a restriction that the land only be used for a cemetery.

Instead, the language calling for a cemetery was used in the Aviation Department's original legal notice offering the land for sale or swap. The deed restriction included with the land at Windmill Road and Durango Drive said the property must be developed in conformance with restrictions on residential development in the area and in conformance with the master plan of the area, in the unincorporated town of Enterprise.

Aviation Director Randy Walker said that meant that originally the land could only be developed as a cemetery, since the land was, until last, year master planned for residential uses. Because land in the management area can't be used for residential projects, the only remaining use under that zoning would be as a cemetery.

The company that purchased the land last year, however, worked throughout the year to change the master plan for part of the area to commercial.

The County Commission on Dec. 8 changed the master plan, incorporating the commercial designations the owner, Windmill Durango Limited Partnership, sought. In the approval, the commission opened the door for commercial development that would not include a cemetery.

The company unsuccessfully sought a zone change to commercial, which county airport officials opposed. When Windmill Durango worked through the master plan amendment process, Walker said the airport did not oppose their request.

"We didn't oppose him because frankly we didn't think it was our business to say what the master plan should be," he said.

Walker said that based on advice from staff and the district attorney's office, the deed restriction could not specify use only as a cemetery, but instead had to be tied to issues of the master plan and compatibility with airport operations.

The commercial zoning of the property now meets both criteria. More than 17 acres, however, closest to the homes in the Rural Neighborhood Preservation district remain zoned residential, and could still be developed as a cemetery.

Walker said his staff made a mistake in saying the land should be used only for a cemetery in the original legal notice published in local papers that offered the land for sale or swap. The language reflected the restrictions that sprang from the combination of the old zoning, the master plan and the restrictions against new homes on airport land.

"The controversy stems from the fact that we want to dispose of this land in a way that is compatible with the master plan, the airport and the CMA (Cooperative Management Area) guidelines," which bar new homes on formerly airport land, he said.

"What can you do with a piece of residential land, master-planned residential (in the management area)? Not much," Walker said. "You can't put homes on it. You can put in a cemetery."

Still, the legal notice in May 2003 that specified only a cemetery could go in on the land in question should have said it could only be developed according to the master plan, not specify "cemetery," he said.

"It shouldn't have been published that way."

The only bid, for swap of appraised land, came from Gragson, who has done extensive work in other parts of the airport management area. Airport officials said it was Gragson who approached the airport about the land, which some have said points to a back-room deal.

"They came and said we have an interested party that wants to build a cemetery there," Walker said. "They knew that unless there was a legitimate use, we would decline to dispose of the property."

He said the Aviation Department confirmed there was a party interested in building a cemetery on the site. The fact that both Gragson and the airport cooperated to sell land that would theoretically become a cemetery, but instead seems likely to be used for other purposes, adds to the appearance of potential impropriety for some observers.

Gragson said two things changed that outcome: the cemetery interest instead bought land about a mile north on Windmill, and another party came forward before the deal had been inked with another offer to buy the airport land, with the deed restrictions in place.

Gragson and Walker said that is not evidence of collusion.

"I don't think that is true," Walker said of charges of insider dealings. "People were speculating on this land, thinking it was cheap, thinking they could flip it and get a good deal ... (But) staff had no relationship with the buyer on a personal or professional basis.

"Our goal is to make sure the land is developed in a compatible nature for the airport."

The scrutiny of the issue has prompted commissioners, including Commissioner Lynette Boggs McDonald, to ask for an audit of the Aviation Department's policies generally and the Windmill and Durango land deal specifically.

Walker and the developers said they both welcome the audit, the scope of which the county will describe Friday.

Gragson acquired the land in 2003 and sold it a year later to Windmill Durango, in the process making a $5 million profit. He doesn't apologize for making money on the deal but insists that is not evidence of any wrongdoing.

Gragson said he has worked extensively to buy and trade land with the airport because he has focused professionally on the fast-growing southwest part of the Las Vegas Valley, an area dominated by the Cooperative Management Area.

"It was not a sweetheart deal," he said. "There was no conspiracy... This is a fairly rigid process, and most people don't want to take the risk of entering the process or fronting the money.

"These aren't normal deals. Unfortunately, they are very complex, and there are a lot of moving parts, and there is a lot of risk associated with them.

"I wish I had control of all the moving parts, then I would take the blame, but I don't think there was anything wrong here."

The buyer of land from Gragson, who won the right to develop the property commercially with the master-plan change in December and the zoning approval from the county commissioners earlier this month, agreed.

Daniel Loera, Windmill Durango's agent on the deal, said he began working with Gragson and the county early last year. The new owner was aware of the deed restriction from the beginning, he said.

"The deed restriction says no residential construction and it must conform to Clark County's, and more specifically to the Enterprise land-use master plan," Loera said.

The new company hit a serious snag in its plans to develop the property commercially early on last year.

"We moved forward with a nonconforming zone change (to the master plan)," Loera said. "In doing so, the airport threw up a red flag."

The airport opposed the zoning request, and Walker said he threatened to sue to protect the existing, residential zoning that would prevent commercial uses. Instead, the landowner turned its attention to the Enterprise land-use plan, then going through an extensive period of public meetings to produce a new guide.

"We put the project on hold," Loera said, while the master-plan revisions went forward.

He said residents expressed concerns about the proposed development in several neighborhood meetings and two town board appearances, but those concerns did not focus on whether a portion of the land became a cemetery.

The company left 16 acres of the land undeveloped in an effort to protect an adjacent rural neighborhood preservation zone and lowered the proposed buildings in the development, both concessions to neighbors, Loera said.

"There were no comments on the corner of Windmill and Durango," the site of the would-be cemetery, Loera said.

He said suggestions that the deal was struck in a back room ignores numerous public meetings, public notices and other moves that were taken in the light of day.

"A lot of it has been misinformation," Loera said. "It really has been characterized as a conspiracy."

But Loera said the development had to go through public rounds in front of neighborhood groups, the town board and ultimately the county commission.

"There was really no other way around the process to develop the land."

Protestations of innocence to the contrary, some of the observers to the process are unhappy with the result. John Hiatt, a member of the Enterprise Town Advisory Board, said he doesn't fault the developers.

Hiatt said he doesn't remember the specific deed restrictions that accompanied the property, but he clearly remembers seeing copies of the original newspaper advertisement saying the land could only be used for a cemetery. He also remembers Aviation Department officials arguing against the early zone change effort.

Those officials said then that only a cemetery could go in, Hiatt said, and Walker, with the airport, agreed. But that was before the master plan change.

"The big issue is what the airport said and then what happened," Hiatt said. "The airport guys said this restriction applies to the land and they said it had to be a cemetery."

Sue Allen, president of South West Action Network, a citizens group of southwest residents focused on land-use issues, said she doesn't see evidence of conspiracy. She said people must carefully follow land-use issues, especially when it comes to the admittedly long process of revising master plans.

Allen noted that the developer is unable to develop 17 of the 38 acres because it is in a rural neighborhood preservation zone, a goal her group worked for and something she considers a victory for her citizen group.

"We maintained the boundary even though it left the developer with 17 acres he can't do anything with," she said. Except, perhaps, build a cemetery.

Allen said some residents feel strongly, and have made accusations about both county staff and the developer.

"I don't know if anything illegal was done," she said. "Something unethical may have been done, but I don't know that either.

"We told people they've got to follow it. We told them they've got to come in and look at the maps. If you don't do that, then I'm sorry, you don't get to object. Well, you can object, but people might not take you too seriously."

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