Las Vegas Sun

March 29, 2024

Firm was forced out of Ivanpah plans, jury told

Clark County aviation officials pushed a private company out of plans to develop the proposed Ivanpah airport after the company spent hundreds of thousands of dollars to finance a study later used by the county to further its own goals, the company's attorney told a jury Thursday.

Hamilton Nevada LLC sued the aviation department for allegedly taking ideas from the company's study to move forward with its own plans for a second airport in the Ivanpah Valley.

"They (Hamilton Nevada and potential investors) were shown the door by the county," William Coulthard, an attorney for Hamilton founder Raymond Young, said during opening arguments of the trial in District Court. "Not only were they shown the door but it was slammed in their face."

Hamilton Nevada attorneys argue that county officials are "unjustly enriching" the county by using parts of the company's $700,000 study of the location and overall feasibility of the project.

Coulthard argued a five-year memorandum of understanding was abruptly severed after a July 2001 meeting with county Aviation Director Randy Walker, Young and potential investors, during which time Walker insisted the project be publicly financed.

Walker's alleged actions, described by Coulthard as "storming in" to the meeting late and cutting off presenters trying to speak, so "humiliated" Young -- a Princeton-educated engineer and former undersecretary of the federal Transportation Department -- that would-be investors balked at his plan and damaged his ability to seal future deals, Coulthard said.

"It destroyed Mr. Young's ability to move forward," he said.

Meanwhile the county has since repeatedly used information from within the study, which weighed three potential sites for a second Southern Nevada airport and recommended Ivanpah land, to further its own goals while failing to compensate Hamilton, he said.

Attorneys for the county, however, said at the center of the lawsuit is a flawed plan -- one designed by Hamilton Nevada -- to build a massive cargo airport. The company recommended the county acquire 6,650 acres from the Bureau of Land Management and give the company the right to lease the area and develop it.

County officials said what they needed was another passenger airport to ease congestion at McCarran International Airport, but Hamilton Nevada pushed plans for a cargo airport and tried to drum up investors to support the plan, Peter Bernhard, an attorney for the county said.

County planners submitted additional designs focused heavily on passenger service and eventually removing the cargo element entirely, he said.

Bernhard said the county and Hamilton Nevada, which the memorandum of understanding in August 1997, were at odds because of "parallel goals."

The memorandum formed an agreement for the two entities to work together but differed from a legally binding contract, county officials have said.

The county received the BLM land and in 2001 decided to move forward without Hamilton Nevada, saying the company had failed to disclose that its primary investor, French firm Dumez-GTM, had backed out of the project. Dumez fronted the initial $1.4 million to Young's company.

Bernhard disputed Coulthard's claims that the county had intentionally removed the privately financed cargo portion to force Young from the project.

"Clark County is not responsible for those failures," he said. "There was no attempt to 'design him out.' "

HDG Inc., a partnership between Hamilton Nevada and French consulting firm Dumez-GTM, presented a complex plan for what was deemed the Nevada International Industrial Air Center, a facility that would have routed cargo from Asia and Europe on its way elsewhere in North America, Bernhard said. He said the company was looking for investors.

HDG was dissolved in 1999 after Dumez backed out of the project. The company is now called Hamilton Development Group.

County officials were deterred by increasing passenger counts and another report by consulting firm Merge Global saying a primarily cargo-based facility was not appropriate, Bernhard said. Merge Global's recommendation, coupled with what Bernhard said was Young's inability to draw in other investors, prompted the county to eliminate the plan, he said.

Estimates on how much the airport would cost varied, although initial expectations for a cargo-based facility were pegged at between $300 million and $400 million, Coulthard said.

That estimate has since proven unrealistic, as the project will likely surpass $1 billion, Bernhard said.

Young's company in June 2002 sued the county for unjust enrichment, breach of contract, intentional and negligent misrepresentation.

District Judge Mark Denton dismissed all but one claim -- that of unjust enrichment -- in October.

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