Las Vegas Sun

October 25, 2014

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Landowner vs. landowner

When the Focus Property Group bought 1,712 acres in northwest Las Vegas in 2005, it did so with the knowledge that a road was to cut through the property.

Similarly, when other owners, including iconic Las Vegas entertainers Siegfried Fischbacher and Roy Horn, bought land to the north in recent years, they did so knowing that the proposed Mountain Edge Parkway would be near - but not on - their property.

Last week, all that changed when the Las Vegas City Council approved Focus' plan for a 16,000-home master-planned community and possible high-rise casino. In so doing, the council shifted the planned highway route from the middle of the Focus site to its northern and western edges - a configuration that will take the road through nearby property owners' land.

Not surprisingly, that decision has those owners fuming at the developer and City Hall alike.

As they see it, Focus, because of design difficulties posed by the highway's initial planned route, got a sweetheart deal on the land, then persuaded city officials to move the road, substantially increasing Focus' property value at the expense of its neighbors'. It's just one more case, they say, of City Hall siding with a heavyweight developer over the little guy.

Focus and city officials, though, dismiss that as an empty conspiracy theory. Focus' $510 million purchase price was $210 million higher than the minimum auction bid set by the Bureau of Land Management, they said. In addition, although the highway's new northern route opens up as much as 84 acres for development, the company says it will end up with 60 acres less of buildable land because of city demands for more parks and other open space.

The new route also will save taxpayers more than $100 million, they predict.

"I would say unequivocally that it's utter silliness to suggest that this is a sweetheart deal for the developer," said Mark Fiorentino, Focus' senior vice president of government affairs.

If nothing else, the dispute proves anew that , in land deals, the difference between shrewdness and conniving often is in the eye of the beholder - or, more specifically, the property owner.

Headed by prominent local developer John Ritter, Focus' Kyle Canyon Gateway project, off U.S. 95 at the southwest corner of Fort Apache and Moccasin roads, was approved unanimously by the council May 16.

That action, representatives of nearby land owners say, sharply devalued their property, viewed as a potentially lucrative long-range investment because of its location along the major route to Mount Charleston.

Attorney Jeff Silver, who represents two undisclosed partnerships that own land along the new route, said that the property was worth about $1 million an acre before the council decision but is worth much less now. No prospective buyers will want land they know could one day be turned into a highway, he said.

"No responsible buyer will want this land other than the city of Las Vegas, and that's if they ever get funding for the highway," Silver said. "The council decision benefits one private landowner to the detriment of other private landowners."

To support the theory that Focus got a bargain when plans called for the highway to intersect its land, Silver told the council that while the developer paid $298,000 an acre, other property in Las Vegas was selling at the time for $500,000 to $700,000 an acre.

Fiorentino, though, stresses that Focus outbid two other companies to acquire the land for $510 million, paying two-thirds more than the BLM's minimum bid.

Attorney John Moran Jr. represents Rancho Drive LLC and Rancho Drive Partnership, which own property in the path of the northern alignment. Public records identify Fischbacher and Horn as the managers of Rancho Drive LLC and general partners of Rancho Drive Partnership, although Moran would not confirm his clients' names.

"I believe there is something wrong with the taking of people's property by impeding it with a public highway when there are no federal dollars available to build it," Moran said.

City officials, including Councilman Steven Ross, who took the lead in advocating the development, counter that affected property owners will receive fair market value for their land from the city for road construction.

They also say taxpayers will save $126 million because the northern route would reduce costs associated with flood control, bridge s and sound wall barriers.

"We're also getting 13 parks out of this deal," Ross said.

Although Ross received $18,500 in campaign donations from Focus and related political action committees when he won his seat in 2005, he said his decision to support Kyle Canyon Gateway was not affected by that. There have been repeated occasions, Ross said, when he told Focus representatives face to face that he would not support particular proposals.

The planned development, covering land on both sides of U.S. 95 north of the Las Vegas Beltway, calls for a mix of single-family homes, apartments and condominiums along with a potential casino up to 160 feet tall and other commercial uses. Land will be set aside for schools and parks, and the developer will pay the city $1 million to build a fire station and $10 million toward construction of a new U.S. 95 interchange at Kyle Canyon Road.

Focus officials acknowledge that the original interchange location would have altered the development, but say it would not have blocked it.

"We still would have proceeded with a development, only it would have been designed differently," Fiorentino said.

In addition to appearing before the council, dozens of area residents wrote letters and e-mails to city officials to complain about the development's potential traffic, the added residential density and the casino. They also said the city did not seek enough input from nearby residents before putting the project on a fast track.

"As far as specific terms of the development agreement and what's being negotiated, there's not a lot of input from the public," said Jennifer Taylor, co-founder of the group Northwest Residents for Responsible Growth.

Ross, though, strongly defended the development.

"With growth, traffic is always inevitable," Ross said. Speaking of those now complaining about how the development could affect their property, he added: "Eight years ago, before their houses were built, other people were saying the same things about their neighborhoods."

Fiorentino said Focus held at least four public meetings and has agreed to meet with any group as the development proceeds. The developer will still have to return to the council for approval of building heights, setbacks and subdivision plans.

The city has eyed the northern alternative for some time. It applied in December to have the BLM grant right-of-way status on agency land along that route, according to Mark Chatterton, BLM's Las Vegas assistant field manager for nonrenewable resources.

The BLM still has to conduct an environmental impact study of the route and sign off on the city's request, which could take at least a year , Chatterton said.

The initial route would have traveled diagonally from Grand Teton Drive to Fort Apache Road, while the new route is to curve along the northern and western edges of the development.

A chart presented to the City Council showed that the new route would cost taxpayers $322 million, $126 million less than the $448 million estimated for the initial route.

"I will save taxpayer dollars any chance I get," Ross said. "By moving that parkway we save taxpayers millions of dollars that would have gone into flood abatement."

To secure the land needed to build the northern route - something that may not occur for 15 to 20 years - the council was told that the city would have to acquire 277 acres. Of that, 161 acres would be donated by Focus (105 acres in Kyle Canyon Gateway and 56 acres outside the development), 83 acres would come from the BLM and 33 acres would have to be acquired from other landowners.

In a memo, Deputy City Attorney James Lewis stated that the city, by choosing the northern route, would not be taking private property "to give to another private landowner for private purposes." The issue at the heart of that statement is the subject of a proposed constitutional amendment known as PISTOL - the People's Initiative to Stop the Taking of Our Land - that Nevada voters approved last fall and will face again in 2008 that would ban such practices.

"It is true that the developer will be burdened by less acreage of a future beltway, if constructed," Lewis wrote. "The 'perception' that this is unfair to the city taxpayer, in this case, is not reality."

That's because of the extra acreage Focus is willing to donate for the northern alignment, he said.

Silver and Moran, though, disagree with Lewis' analysis, and say their clients are getting the short end of the deal.

"This taking is the poster child for the PISTOL people," Moran said.

Sun reporter Mark Hansel contributed to this report.

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