By Cy Ryan (contact)

Wed, Jan 7, 2009 (12:29 p.m.)

CARSON CITY – Two well-known Northern Nevada figures are facing off before the state Supreme Court over construction of a hotel-casino in Sparks.

John Ascuaga, long-time owner of the Sparks Nugget, maintains the Sparks City Council illegally approved the application of lobbyist-developer Harvey Whittemore to go forward with plans for a gaming resort.

J. Stephen Peek, attorney for the Nugget, told the court that the Sparks City Council approved a settlement permitting Whittemore to move ahead without amending the master plan. And he said the Nugget never had any opportunity to present its opposition.

Daniel Hayward, representing the City Council, said it “found itself between two powerful competing local interests” and the vote by the council on Sept. 20 2006 was valid in allowing Whittemore to go ahead.

The Nugget is the biggest hotel-casino in Sparks. And Ascuaga celebrated his 84th birthday witnessing the oral arguments in the courtroom Wednesday.

Whittemore acquired development rights in a certain section of the city but sought to build his project in another section of the city about five miles from the Nugget. The council rejected his application and Whittemore filed suit, seeking $100 million in damages.

Sparks City Attorney Chet Adams and lawyers for Whittemore worked out a settlement that would permit him to build the resort complex. The council, in a closed-door meeting, approved the settlement. When threatened by the state Attorney General’s Office that the closed-door session violated the open meeting law, the council held an open meeting 19 days later on Sept. 20 and approved the settlement.

Peek argued there was no testimony or facts presented at the second meeting and the Nugget never had a chance to intervene. This was a land-use decision that was “not openly heard and decided,” he said referring to the first closed door meeting of the council and the terms of the settlement.

Hayward argued the city attorney had the authority to negotiate a settlement and the Nugget had ample time to intervene in the case. He said the Nugget did “not take steps to protect their interest” within the allotted time.

E. Leif Reid, attorney for Whittemore’s Red Hawk Land Co., said the city attorney had the right to reach a settlement that approved the development and dismissed the $100 million claim against the city. The Nugget had received notice of an opportunity to challenge the actions by the City Council on Sept. 20, he said.

Whittemore, a high-powered lobbyist at the Nevada Legislature in past sessions, is also involved in a 43,000 acre development in Coyote Springs in Southern Nevada.

Chief Justice James Hardesty said this case was “complicated” and buried in a “judicial quagmire.” The hearing was set for 30 minutes but the court allowed it to extend to 50 minutes.