Fidel Rivera, left, and Jose Rivera move a section of storm pipe into place Tuesday at the Coyote Springs development, 50 miles north of Las Vegas. The Clark County Commission on Tuesday approved establishing a general improvement district to allow developers to begin building homes. The developers plan to build 159,000 homes along the border of Clark and Lincoln counties over the next 40 years. Photo by Clint Karlsen. Click image for enlargement.

Resurrecting an arcane law and employing it in an unprecedented manner, the Clark County Commission approved a measure Tuesday that will allow Reno businessman Harvey Whittemore to expedite development of his Coyote Springs golf community 50 miles north of Las Vegas.

Commissioners created a water resources general improvement district that will allow multimillionaire lobbyist-turned-developer Whittemore to proceed with building the first phase of 49,000 homes of a planned 159,000 along the border of Clark and Lincoln counties without waiting for public money to become available for water and sewer lines.

Tuesday's establishment of the Coyote Springs General Improvement District also insulates local taxpayers from subsidizing a speculative investment in a plan to build 159,000 homes over the next 40 years -- more than four times the current size of Summerlin -- on desert land in the middle of nowhere.

The unusual plan for the district, referred to as a GID in the development community, will see Whittemore and his partners fronting the initial $120 million cost of building water treatment facilities and pipelines. Such infrastructure would typically be funded out of county coffers.

Whittemore and company could be reimbursed for the outlay years from now if the community is successful, with repayment at the discretion of the County Commission.

Whittemore and county officials said a developer-funded GID will prevent Las Vegas Valley customers from being soaked for the cost of building massive infrastructure for a private venture in an area that currently has no residents paying taxes.

The atypical arrangement makes sense for an atypical development, said Commissioner Tom Collins, whose district includes land Whittemore and Pardee Homes are developing as their first phase.

"Taxpayers in Las Vegas aren't going to have to pay to run a water line and sewer lines 50 miles out of town," Collins said. "A GID makes sense for a development not connected to existing development, and you're not putting a burden on existing governments."

Typically when there's new residential development in Las Vegas, the county simply extends and expands nearby pipelines and charges homebuyers a water and sewer hookup fee.

Because Whittemore is erecting a new community far from existing development, the county does not have nearby water treatment facilities or pipelines that can be tapped into easily to expand service.

To receive county cooperation for such an outlying development, Whittemore and company had to go further than most developers to secure infrastructure.

At Whittemore and his partners' expense, the Las Vegas Valley Water District and the Clark County Water Reclamation District will respectively manage water and wastewater systems for the newly created Coyote Springs General Improvement District.

"They're going to build it with their own money, build it to our standards and then turn it over to us for operation," County Manager Virginia Valentine said.

The agreement with the county also calls for Whittemore to secure water for Coyote Springs without tapping into the Southern Nevada Water Authority's scarce supply.

"They have to secure and provide their own water supply, which is something we don't (require) for developers in the valley," Valentine said.

Whittemore has already obtained more than 4,000 acre-feet of water rights from Lincoln County to supply initial development.

Whether Whittemore and his partners ever recoup the $120 million investment is up to county commissioners, who now will also sit as trustees of the Coyote Springs General Improvement District.

Should residents begin moving into the development as scheduled in January 2008, they will be assessed a $45 monthly water infrastructure charge by the GID.

The commissioners, acting as the district's trustees, could decide there is sufficient money from that revenue to reimburse Whittemore. Dick Wimmer, deputy general manager of the water district, said the monthly fee will be in lieu of a single water hookup fee when residents move in.

"This is a unique deal," Wimmer said. "But never has there been a development of this scale detached from existing development."

Tuesday's move is also a new way of employing the rarely used model of a general improvement district.

Traditionally, GIDs are created at the behest of commissioners or residents already settled in a community.

Clark County has five general improvement districts. Each provides water and treatment facilities to outlying communities. The Big Bend Water District, the last such district, was created in 1983.

To create one, state law mandates that proponents of a GID show it is "required by public convenience and necessity."

Board members listed numerous reasons they believed creation of a Coyote Springs GID would clear this legal hurdle.

"It insulates Las Vegans from (water) rate increases if the community fails," Commissioner Lynette Boggs McDonald said.

Commissioner Chip Maxfield said the GID's reliance on the valley water district and the county reclamation district ensures that future county constituents will have the same quality of service as Las Vegans.

Other, smaller outlying communities in Southern Nevada have used privately operated water treatment plants for their GIDs, resulting in failures that the county had to clean up at significant cost, commissioners said.

"We do have historical examples in Blue Diamond and Indian Springs where private purveyors screwed up," Boggs McDonald said. "It's always best to be proactive in these matters than reactive."

The board's actions Tuesday only apply to the 49,000 homes Whittemore plans to build on the one-third of Coyote Springs that lies in Clark County. The other two-thirds are in Lincoln County, where Whittemore is likely to seek a similar arrangement. However, development of the Lincoln side is years away, Whittemore said in an interview.

"This project, we're talking about a 40-year horizon," he said.

Although the GID is specifically structured to protect valley taxpayers should Coyote Springs turn into a boondoggle, Commissioner Collins isn't worried about the project tanking.

He said with vacant land dwindling and population growth booming, people will continue hunting for places to live.

Said Collins: "God quit makin' land, but he ain't quit makin' babies."