Nobody wants to surrender land to the government, but when the government exercises its power of eminent domain -- dirty words for property owners -- homeowners should at least be paid fair market value.
That's the argument of Las Vegas real estate attorney Brian Padgett, who represents property owners dealing with Project Neon, a massive widening of Interstate 15 from Sahara Avenue to Martin Luther King Boulevard. The project will have a major effect on hundreds of businesses on both sides of the freeway, he said.
Padgett, who practices eminent domain and condemnation law exclusively, said he has recovered more than $70 million for Nevada landowners since starting his own law firm in 2007.
With the new Metropolitan Police headquarters at Alta Drive and Martin Luther King Boulevard, businesses along that corridor should be feeding off the "synergy" found around police headquarters in other large cities, Padgett said.
Surrounding developments such as Las Vegas Premium Outlets mall and World Market Center on the other side of the freeway have added value to property in that area, he said.
"Think of what could have been," Padgett said as he stood in the parking lot of a vacant office building across the street from police headquarters. "Everybody along here is gone. They're going to take out the first line of property on the west side (of I-15) between Charleston (Boulevard) and Alta."
Padgett, who is originally from Alaska, received his law degree from Seton Hall University in New Jersey and came to Las Vegas in 1999 as a clerk for District Court Judge Steve Huffaker. In 2001 he joined the law firm of Kermitt Waters, where he specialized in eminent domain.
Question: What is eminent domain?
Answer: It's the power of the government to take land for public purpose.
Question: Does it ever go through uncontested?
Answer: If the government gets to the point of eminent domain, it's contested. They can't come to an agreement on the price of the property. Otherwise, it's a willing buyer and a willing seller.
Question: Does that ever happen?
Answer: It happens often. If there (are) 20 properties, eminent domain is probably used in three or four of those. I think people are afraid of being named a defendant in a civil action. That's intimidating for people, when the issue really is (that) we can't agree on the value of land and we're going to find out what the true value of that land is. Sometimes you settle on that amount and sometimes you go to trial.
Question: How did you end up specializing in this field?
Answer: I always wanted to be in real estate development. I liked the idea and I'm interested in constitutional rights. Eminent domain allows me to determine the highest and best use of a property. That's when you get the highest price. The landowner gets his land taken and he's got one shot at compensation. I do a lot of detailed work, so we only handle a small amount of clientele. Ultimately, I was very successful at it and I found I really enjoy it. The government has a lot of power. They hire appraisers and right-of-way agents. We're always the underdog, defending landowners. The government has all those resources. They have more power than we do.
Question: Do you have an example of how you recovered just compensation for a client?
Answer: We had an $800,000-an-acre offer for a parcel at Silverado Ranch (Boulevard) exit, on the west side. It was a mixed-use overlay district, a lot more valuable than a home value for an acre. They (property owners) wanted another $50,000, that's all. The right-of-way agent called and said, "We're not giving you $50,000. Maybe $10,000 and you (had) better take it quick." They owned the home for 20 years. Ultimately, they got paid $2.2 million an acre for seven acres. You've got to give people the opportunity to make a fair assessment.
Question: What are some of your most egregious cases?
Answer: I'm representing several landowners where the government started buying property from 2004 to 2007. They bought some properties, but they didn't buy other properties. They deposited the money in the bank at 2007 and 2008 prices. Then the market turned. Now they say that property is $1.5 million less, and by the way, pay us back. The property owners could not have sold because the project (Neon) went through the middle of their land. Nobody wants to touch it. He's stuck. He can't sell the property, while his neighbors sell at the peak. That's the most egregious. Don't take someone's property and leave them holding the bag.
Question: What's the big issue with eminent domain for Project Neon?
Answer: When did the government announce the project and did they miss the upturn? Now it's come down (in price) and now the government wants to acquire the property. Recognize they froze them for four years.
Question: Do you propose an alternative solution to Project Neon?
Answer: The government has the power to take the land and the owner has the power to be paid just compensation. NDOT has worked with the government and they went through with the environmental impact statement. They determined this path was best to accomplish their goals, to serve them best. If they (property owners) felt they were treated fairly and reasonably, there won't be a problem, if they were made aware of their rights. Transparency is the best policy. If they don't feel they're treated fairly, there's going to be eminent domain.
Question: How can these issues be avoided?
Answer: I think you've got to have transparency. Tell these people up front what their rights are. You're going to have to tell them the law says they be paid a price for the highest and best use, and that use may not be what the property is currently being put to.
Aside from just compensation, there are a lot of important issues in relocation. These people have a business in the path of the project and they need help relocating, not just moving down the street, but help finding that location and moving. Make sure they have the same amenities, and it shouldn't come out of their pockets.
Question: What brought you to Las Vegas?
Answer: I'm from the West Coast and I love the open air. I didn't want to be living on top of someone. I saw an opportunity for someone who wants to roll up their sleeves and work hard. ... That it was growing and it was developing, there was opportunity. There (are) nearly 1 million attorneys in L.A., and there were 5,500 attorneys here. I knew if I was going to make money outside of law, it would be buying property and developing and Las Vegas seems like the place for me.
Contact reporter Hubble Smith at email@example.com or 702-383-0491.