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August 1, 2014

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Culinary, city continue City Hall redevelopment battle

The fight over the future of the Las Vegas redevelopment plan is far from over.

At its March 3 meeting, the Las Vegas City Council voted not to place the petition issues, which had the required number of certified signatures, on the ballot.

Culinary Local 226 officials, who submitted the petitions, filed a suit in the Nevada Supreme Court this week seeking an emergency order to compel the city to let voters decide on the ballot initiative and referendum submitted in January.

“It is clear that the city ... took the law into its own hands, violating the constitutional rights of voters,” D. Taylor, secretary-treasurer of the Culinary, said in a statement. “Instead of wasting further taxpayer dollars fighting these ballot measures ... Las Vegas should obey the law and let the voters decide.”

City officials say they tried to work out a solution that would appease the Culinary to no avail and felt they were left with no alternative but to vote the initiative and referendum off the ballot, even if it meant facing a lawsuit.

The initiative, called the Las Vegas Taxpayer Accountability Act, would require the city to get voter approval for lease-purchase agreements worth more than $2 million.

The referendum would repeal the Las Vegas redevelopment plan.

In January, In Business Las Vegas was the first to report that the City Council might use a 1995 Nevada attorney general’s opinion as a basis for not putting the initiative and referendum on the ballot.

City Attorney Brad Jerbic cited that decision when he recommended the council leave the issues off the ballot. The council agreed, 6-0. Councilwoman Lois Tarkanian was not present.

“There was a petition filed in 1995 that is strikingly similar to the referendum and initiative circulated this time,” Jerbic said in a later interview. “The referendum is different only in the ordinance number that they are trying to repeal and the initiative is similar in that it sought in 1995 to make the citizens the redevelopment agency.”

Jerbic is familiar with the decision by Frankie Sue Del Papa, the attorney general in 1995, because the longtime city attorney requested the clarification that prompted the opinion.

In the opinion, the attorney general’s office stated: “(T)he ballot measure would plainly and palpably violate the United States Constitution based upon the analysis (Jerbic) provided on the subject of impairment of contracts.”

There is some additional language in the Culinary’s petition that is designed to get approval for the specific type of agreement approved by the council to fund a new city hall.

“What’s new about this is that they added an additional part to the initiative that states any appropriation of $2 million or more for a lease-purchase agreement has to be approved by the voters,” Jerbic said.

A lease-purchase agreement, financed by certificates of participation, is what the council has approved for the funding of a new city hall. City officials say this method was preferred over general obligation bonds because failure to repay bonds would hurt the city’s credit rating.

Certificates of participation offer higher returns and are purchased by investors. In this case, the city’s lease payments would be used to pay the certificate holders with interest.

Jerbic made it clear to the council that he thinks the Culinary’s motive is to derail a new city hall.

“Let’s be blunt,” he told the council, “this is aimed at stopping your ability to make your lease payments for the city hall.”

Culinary officials are equally candid in their assessment of the city’s motives. They say the city chose the lease-purchase option to deny voters a say in the new city hall deal and have rejected the ballot initiative and referendum for similar reasons.

“It’s a sad day when the City Council and mayor are afraid to put an issue that’s been signed by 14,000 citizens before the voters,” said Chris Bohner, Culinary research director.

Jerbic said that getting the required number of signatures on a petition is a necessary step in the process, but it doesn’t guarantee ballot inclusion.

Inclusion based strictly on the number of valid petition signatures, he says, could allow items that are unconstitutional, or even illegal, onto the ballot.

Richard McCracken, an attorney representing the Culinary, said the Nevada Supreme Court has ruled that voters must be given the chance to vote before the substance of a ballot measure can be challenged.

Jerbic admits that there has been some evolution in law since the attorney general’s 1995 opinion.

“There has been a lot of inconsistency as to what you can challenge and when you can challenge it,” Jerbic said. “There is still authority for our position that it is appropriate for the council to consider whether it goes on the ballot now. The Culinary certainly has every right to go to court and see if, within that range of law, they can make a case.”

In addition to what Jerbic considers a strong legal argument, the city will have the support of some prominent members of the downtown Las Vegas business community.

Richard Worthington, chairman of the Downtown Las Vegas Alliance, said his group plans to file an brief in support of the city’s position.

“We’re very concerned about losing the redevelopment agency,” Worthington said. “We believe it’s critical to every business in the downtown area. We’ve seen it’s progress to date and we think its best results and impacts are yet to come.”

Worthington, president of the Molasky Group, said he strongly supports unions, but he disagrees with the Culinary on this issue.

“We think this could really set back the clock on redevelopment downtown,” Worthington said.

The Downtown Las Vegas Alliance includes representatives from the World Market Center, the Fremont Street Experience, downtown casinos and several small businesses.

Jerbic said despite the council’s unanimous support for the new city hall, the sole determination of whether his office recommends an issue to be placed on the ballot is if it passes legal muster.

“Our job is not to like or dislike an initiative any more than it is to like or dislike who is on the ballot for election,” Jerbic said. “If there were a question that somebody in government didn’t agree with that was legal, it would be on a ballot and that’s what the law says. The law also says that there are some things that are just not proper subject matter for voters.”

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