Voters warned: Don’t take the bait

Michael J. Mishak

Friday, Aug. 25, 2006 | 7:21 a.m.

Calling it classic "bait-and-switch," opponents of Nevada's eminent domain initiative say that the ballot measure, billed as an effort to protect property rights, would instead raise taxes, kill freeway growth and other public works projects and effectively paralyze local governments - all while lining the pockets of trial lawyers.

Racing against the election clock, a number of government agencies, businesses and labor unions are challenging the initiative's legality. They have asked the state Supreme Court to toss it off the Nov. 7 ballot.

If it survives the court challenge, the state faces a potential catastrophe - worse even than the upheaval Oregon is experiencing from a less restrictive measure that went into effect just months ago, said a trio of public officials who met with Sun editors and reporters on Thursday.

Clark County Commissioner Bruce Woodbury described a grim future in which local governments could find themselves bankrupt and powerless in the face of mounting lawsuits.

"This constitutes a radical overturning of existing law," Woodbury said. "If this had been in existence when we determined the route of the (Las Vegas) Beltway, it wouldn't have been built. Property owners will hold out with no penalty, and the taxpayers will pay the bill."

The stated purpose of the initiative is to prevent abuse of the eminent domain process, under which governments can force private-property owners to sell their land at fair market value for public use.

Under the initiative, instead of fair market value, property owners would be paid the highest possible value for their property, plus compounded interest and attorney fees. That language will drive up the cost of acquiring land - a cost taxpayers would have to bear.

Washoe County, for example, has estimated that the price of road projects would soar by 70 percent because of the increased cost of acquiring right of way, Woodbury said.

Southern Nevada already faces a $4.8 billion deficit in funding necessary to build roads to keep up with growth. Those costs could rise as much as 50 percent to 100 percent if the initiative becomes law, said Phillip Peckman, chairman of a task force created by Gov. Kenny Guinn and the state Transportation Board to evaluate Nevada's highway demands.

The initiative's broad language would damage the state in other ways, the officials said.

One provision states that property owners would be entitled to "just compensation" for any government action that changes the value of their property. That language would include a zoning change, or failure to make a requested zoning change, or turning a two-way street in front of a business into one way to improve traffic flow.

Any property owner who feels thus aggrieved would be guaranteed the right to two separate jury trials.

The situation could lead to a zoning free-for-all, forever changing the character of Nevada, the opponents said. Unable to pay substantial claims , local governments would be forced to waive zoning restrictions, they say.

The provision also would effectively void projects such as Southern Nevada Water Authority's proposal to pump ground water from White Pine County . Ranchers and others could file lawsuits claiming their land values had been harmed, demanding compensation at exorbitant prices, the officials said.

Another provision would require property taken by eminent domain to revert to the original owner - upon repayment of the original purchase price - if the property is not used within five years.

That not only jeopardizes Nevada's federal highway funding, Woodbury said, but it also makes it impossible for government to save money by buying road rights of way at current prices for use in the future.

"It's absolutely ludicrous what's going to happen," said Peckman, an executive with The Greenspun Corporation , which owns the Sun. "This will basically stop road construction. This selfishness has to stop."

Nevada is not alone in wrestling with the initiative. Similar campaigns to "reform eminent domain" are under way in five other Western states.

In Oregon, a less sweeping measure was approved in 2004. It took effect earlier this year, after legal challenges, and has resulted in $4.7 billion in claims against local governments.

The Nevada initiative campaign is being paid for by the People's Initiative to Stop the Taking of Our Land, or PISTOL. It has received more than $168,000 from Americans for Limited Government, a Chicago organization that has financed similar measures in other states, including Washington and Arizona. The organization is headed by New York real estate mogul Howie Rich.

The driving force in Las Vegas is eminent domain lawyer Kermitt Waters . "It's going to stop government from financing public projects on the backs of landowners," Waters has said. " This will keep the rich from robbing the poor. It's a reverse Robin Hood."

Officials who met with the Sun said Waters' interests dovetail with the libertarian cause.

"The libertarian ideological agenda will cause harm to this community," Woodbury said. "In the end, government would be bankrupted, and then paralyzed."