Tuesday, August 02, 2005
Copyright © Las Vegas Review-Journal

AIRPORT LAND TRANSACTIONS: Appraisal overseer resigns

Official quits post after learning of county's intention to fire him

A project coordinator who oversaw the appraisal process for McCarran International Airport land transactions resigned last week under threat of termination.

Keith Kinsey voluntarily resigned after Clark County administrators told him of their intent to fire him, according to a county report.

Kinsey's departure represents the first disciplinary action taken against a county employee connected to the ongoing investigation of airport land swaps. Kinsey was responsible for overseeing appraisals of public land involved in deals.

Kinsey declined to comment Monday.

The first phase of the county audit was presented to Clark County commissioners last month. Auditors discovered that appraisals of airport-owned property consistently favored developers, and airport staff was never given documentation supporting those appraisals.

"The (airport) did not demonstrate due diligence, as the appraisals were generally not reviewed," the audit says.

The lack of oversight resulted in property being valued at high prices when it was traded to the airport and lower values when transferred to developers.

Kinsey, who was paid $69,592 a year, worked under Airport Program Administrator Sharon Jolley. Jolley retired last year.

In addition to notifying Kinsey of their intent to terminate him, the county's auditing team also recommended to commissioners that they report appraiser Tim Morse to the Nevada State Real Estate Division. The county stopped using Morse after learning he was involved in the two deals it has investigated.

Morse has not returned repeated phone calls. After commissioners voted to file a complaint against him, attorney Don Campbell called the move "a blatant, disgusting attempt to make a scapegoat of someone ... anyone ... other than the Clark County officials who approved every real estate transaction."

The audit was initiated after a series of Review-Journal stories that outlined inconsistencies in appraisals involving public land. The stories also showed that land broker Scott Gragson was the successful bidder in 20 of 46 airport land exchanges since 2000.

Morse, one of five county-approved appraisers, appraised all airport properties sold or traded to Gragson. Gragson made millions flipping parcels just days after acquiring them from the airport.

The first phase of the audit focused on two Gragson transactions, but the county, Las Vegas police and the Federal Bureau of Investigation are investigating all of the land deals overseen by the airport.

Critics have argued that airport administrators should be accountable for lack of oversight that resulted in Gragson's ability to reap millions of dollars in profits. Clark County Manager Thom Reilly said the audit showed that Jolley and Kinsey were at fault and they no longer work at the airport.

He emphasized that disciplinary action thus far is based only on the first phase of the investigation.

"In the first two transactions, one of the major findings dealt with the issues of appraisals," Reilly said. "In that case, staff involved as well as the appraisal were called to task.

"It is a process, and we need to respect the process. If there comes a point where we can take action, termination or notice of termination, we're doing it," he said.

In the first step of the audit, county administrators looked at a piece of airport land up for sale at Windmill Lane and Durango Drive. Newspaper legal notices advertising the property said the land carried a restriction limiting it to cemetery use only.

Gragson was the only bidder on the property. When he signed the deed in 2003, the cemetery use only restriction vanished. He acquired the property for $2.6 million and sold it for $5 million.

The second land deal involved three pieces of land at Blue Diamond Road and Valley View Drive. Gragson offered three parcels and cash with a combined value of $1.2 million.

He told commissioners his three parcels were surrounded by county-owned land and said the county would need his property if it was to proceed with a commercial development planned for the site.

Gragson told the board if it did not approve his proposed land swap, the county would be forced to pay him a much steeper price for the land later.

Not only was the land not owned by Gragson, but it was already locked up in a contract with a private developer. Commissioners opted to go with the bid Gragson submitted. He soon resold the land he acquired in the swap for a profit of $3.5 million.

Kinsey was informed of the county's intent to terminate him last week. He resigned shortly before a scheduled employee hearing, which is required under the county's collective bargaining agreement.