Construction continues Monday on the parking structure of Vegas Grand condos, being built at Flamingo Road and Swenson Street. Photo by John Gurzinski.

The developer of Vegas Grand luxury condominium project has been ordered to pay 2.5 percent of gross sales proceeds into a common fund as part of a class action lawsuit settlement, the plaintiffs' attorneys said Monday.

Florida-based Del American was sued last year for canceling reservation contracts and raising prices at the $650 million mid-rise condo community under construction at Flamingo Road and Swenson Street.

Under terms of the settlement, 638 Vegas Grand reservation holders will receive periodic payments as the project is built and sold, California attorney Richard Donahoo said.

The final amount paid to the plaintiffs will depend on sales in five buildings at Vegas Grand. At today's market prices, the fund to be distributed among class members is projected to total more than $15 million, the attorney said. Reservation deposits of $25,000 are also being returned.

"We are pleased with a successful result for the purchasers and that the project is going forward," Donahoo said. "The parties engaged in extensive mediation to find common ground. The settlement approved by the court will allow the Vegas Grand project to move forward with no further delays."

Calls to Del American attorneys were not returned.

U.S. District Court Judge Brian Sandoval gave final approval to the settlement on Nov. 17.

The court found that the settlement is "fair, adequate and reasonable; that the interests of the class are better served by the settlement than by further litigation; and that the settlement does not unduly burden the rights and interests of other parties to be affected by its terms."

Prices started in the low $200,000s when Vegas Grand was announced in late 2003. In May 2005, buyers were notified that the developer was canceling reservation contracts and increasing prices by about 50 percent due to escalating construction costs.

They were given the option of having their deposits refunded or staying in the project at the new prices with a slight discount. Several of the original reservation holders entered into new agreements to purchase units at Vegas Grand.

Plaintiffs were represented by Donahoo & Associates of Santa Ana, Calif.; Foley Bezek Behle & Curtis of Santa Barbara, Calif.; Marquis & Auerbach of Las Vegas; and attorney George West of Las Vegas. The developer was represented by David Oliver and John Boudet of Greenberg Traurig in Orlando, Fla., and local counsel Tom Kummer.

"We have always been willing to accept the brunt of the unexpected increase in construction costs in Las Vegas, which affected our unit prices, so long as the reservation holders recognized that financing for the project was necessarily dependent upon the project pricing making good financial sense," Del American Chief Executive Officer Chris DelGuidice told the Review-Journal in August when a preliminary settlement of the lawsuit was approved.

Local attorney Will Kemp, who represents 35 buyers at Krystal Sands, the first luxury high-rise project to be canceled in Las Vegas, said there will probably be a couple dozen "opt outs" at Vegas Grand, buyers who won't accept the terms of the settlement in hopes of getting a sweeter deal.

"But it's refreshing to see a developer settle," he said.

Vegas Grand differs from Krystal Sands, which was purchased by Florida-based Turnberry Associates for about $90 million, because Vegas Grand involves canceled reservations and Krystal Sands is about purchase and sale agreements, or "hard contracts," Kemp said.

"Let's see, $15 million on a reservation case. What's that make hard contracts worth?" he said.

Kemp also represents buyers in a lawsuit against the failed Icon project by Related Cos. of Las Vegas. That case is just entering the evidentiary discovery phase.