The city's environmental officer blasted Tuesday a deal that would allow a developer to turn a golf course next to the city's sewage treatment plant into a 1,200-home subdivision and said it will cost taxpayers an additional $30 million.
The proposal for the Royal Links Golf Club, which the Las Vegas City Council is scheduled to reconsider today, is the most recent in a string of deals benefiting developer Bill Walters, said Lori Wohletz, the city's environmental officer.
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"To jeopardize that (sewage treatment) facility's compliance to make one person richer, who's already rich, makes no sense to me," Wohletz said.
She said she warned City Manager Doug Selby before the council voted on the matter on Nov. 2 that the city was getting a bad deal if it removed the restriction on developing the golf course into homes. To reduce odors at the sewage treatment plant to protect its new neighbors would cost the city $30 million, she said.
"There's no benefit to the city, and there's a large potential to harm the wastewater treatment plant," she said.
Wohletz has been in charge of making sure the city's Water Pollution Control Facility complies with environmental regulations, including odor issues, for the past 10 1/2 years. The city has spent $35 million over the past decade to cut odor emissions, and no odor complaints have been made over the past three years.
But, Wohletz said, neither she nor the plant manager, Dave Mendenhall, knew Walters wanted to turn the course into housing until it was put on a City Council agenda in July.
The council voted Nov. 2 to lift a deed restriction on the 160-acre course, paving the way for it to be turned into housing. But some officials called for a do-over, after two reports released after the vote alleged former Public Works Director Richard Goecke made decisions and committed potentially criminal acts that cost taxpayers millions of dollars and helped Walters acquire and develop the golf course in the late 1990s.
Goecke denies he did anything wrong.
Mayor Oscar Goodman has invited Goecke and nine other people to address the council today. The list includes Walters, former City Manager Virginia Valentine and former Councilman Michael McDonald.
Goecke has said he will speak to the City Council today.
Walters, who has denied wrongdoing, has said he will address the council.
Other deals between Walters and local governments have come under scrutiny.
"Staff members have been expressing outrage over these deals for the last 10 years," Wohletz said.
The 160 acres near Vegas Valley Drive and Nellis Boulevard was meant as a buffer between residential development and odor from the sewage facility.
The city acquired the bulk of the land between 1987 and 1990 for $2.65 million, city Finance Director Mark Vincent said. That land was sold to Walters in 1999 for $854,000, well below the city's acquisition price and the market price at the time. To maintain a buffer around the sewage plant, the city placed a deed restriction on the land requiring it remain a golf course.
Early this year, Walters approached the city about lifting the restriction. He said he would pay the city $7.2 million, the difference between the appraised price of the land in 1999 and what he had paid, plus an additional 6 percent per year in interest.
Lifting the deed restriction because it allows residential development increased the value of the acreage by $24 million, to $35.6 million, according to one appraisal the city commissioned. Another appraisal for the city found lifting the deed restriction raised the land's value by $28.7 million, making the parcel worth $55.7 million.
Wohletz said allowing the development would ignore recommendations made by independent consultants.
"The expert panel came out and basically said, 'It's crazy to do this,'" she said.
The houses Walters proposes will be as close as 20 feet from the Water Pollution Control Facility's northern and western borders. That would increase the likelihood of odor complaints, which would force the city to spend millions of dollars, she said, citing the city's panel report.
The number would be about $5 million in the short term, but if the plant is expanded, it could climb to $30 million, according to the report.
The report recommends leaving most of the golf course as is and acquiring more land to serve as a buffer. Wohletz said she made the same recommendation to Selby.
Selby said he had conversations with Wohletz but said that policy decisions were best left to the elected officials.
"I told her we owe the mayor and the council a full accounting of this report. It's up to them to make the decision. It's not a staff prerogative whether this is an acceptable deal or not," he said.
The City Council agenda showed staff recommending lifting the deed for $7.2 million from Walters and the return of a contract to buy cheap wastewater.
Selby said that in retrospect, he might not have put any recommendation on the item. He later said he thought deal was a good one for the city because it "is one of those situations when we have an opportunity to get revenue off of something that may not be available in the future."
He said the land could not be put up for bid because it was sold to Walters in 1999.
Wohletz accused Selby of changing the questions prepared by staff and sent to the experts reviewing the proposal to put a positive spin on plans to develop the project.
In an e-mail sent to Mayor Pro Tem Gary Reese, Wohletz said, "I feel very strongly that the City Manager has attempted to manipulate the expert panel hired to review the impacts on the WPCF (Water Pollution Control Facility) solely to promote the development of the golf course. ... The final questions are so slanted toward development that the expert panel immediately asked if the lifting of the deed restriction was a 'done deal.'"
Selby defended the expert panel's analysis. It was a "very credible report," he said. "No one told experts what to say. No draft was edited or reviewed."
In July, Wohletz raised concerns over an earlier engineering report that was commissioned by the city. The original version brought up costs, up to $100 million, that might have to be spent to clean up odors. It warned of methane gas explosions.
An edited version painted a much rosier picture, downplaying costs and problems. Concerns over the edited report led to the police investigation.
"I had the original in my hands for about 5 minutes, when we got a call that most of the negative information was taken out," Wohletz said.
She took the original unedited version of the report to Deputy City Manager Betsy Fretwell and told her, "in my opinion, it was unethical, and I would not go along with it."
The Las Vegas police investigation found no criminal acts by Goecke that caused the memo to be changed. Police said that he advised the consultant preparing the report to focus on the positive, which is what Selby had requested.
Mayor Oscar Goodman has stood by his Nov. 2 vote in favor of lifting the deed restriction and has said the city should not "extort" people. He has said that the events in the late 1990s had nothing to do with the issue of lifting the deed restriction.
Lois Tarkanian is the only member of the council to say that the city should have gotten more money for lifting the restriction.
Walters said he would reserve most of his comments for today's meeting.
"This thing has been studied every which way they can study it," he said. "Nothing has changed except misinformation and innuendo."
When Wohletz was asked why she was coming forward now, she told a reporter, "Because you called me."
In her letter to Reese, dated Nov. 4, Wohletz wrote: "I am fully prepared to resign immediately if necessary. My last boss, Michael Naylor, once told me that if my ethics were bothering me then it was time to find another job. I always thought that was some of the best advice that I was ever given."
