CARSON CITY — A Las Vegas attorney representing the landowner in a Boulder City bypass eminent domain dispute is complaining that the state Department of Transportation is wasting taxpayer money fighting the case rather than accepting a settlement.
The inverse condemnation action on three acres of the Jericho Heights property on the southwest side of U.S. Highway 95 at Railroad Pass has been the focus of recent public comments by Gov. Brian Sandoval because of the concern that the cost to the state could exceed $100 million. Inverse condemnation involves the loss of income from the future use of the property. The property is approved for high-density residential use.
But attorney Kermitt Waters said the owner of the parcel, Jericho Heights LLC, and its principal, Randy Schams, has made a much lower offer without getting a response from the state.
The offer is $33 million and includes 3 million yards of fill that can be taken from the property that is worth close to $20 million and that will be needed for the project, he said. The property not needed for the right of way also would be offered to stage equipment for the bypass project, so the net cost to the state is only about $10 million, Waters said.
NDOT has valued the three acres at only $337,000 based on a recent appraisal, which does not encompass the potential inverse condemnation costs.
OFFER CALLED ‘PIE IN THE SKY’
The private attorney retained by the Transportation Department to resolve the dispute described the Feb. 28 offer as “pie in the sky.”
Attorney Laura Fitzsimmons also called the demands for the property “a shakedown.”
As more facts come to light in the case, their claim will become weaker, she said.
Waters said the public references by Sandoval to the higher amount is an effort “to prejudice a jury and judge in our case and say we are overly greedy.”
“Instead of responding to the landowner’s offer, the state, using a mountain of taxpayer dollars, has paid an army of private hourly billing attorneys to aggressively attack the landowner and has undertaken a no-holds-barred character assassination of a Nevada landowner for being nothing more than a citizen, landowner and entrepreneur in Nevada who happens to own land in the path of NDOT’s project,” he said .
Fitzsimmons is the only private attorney working for the agency on the dispute.
Fitzsimmons said she has worked for about 2½ months on the case and billed the state for about $80,000 at $400 an hour.
She said the $33 million offer only seems reasonable in relation to the unreasonable $110 million to $120 million sought in the original claim.
Speaking only for herself and not on behalf of the Transportation Department, Fitzsimmons said the claim of $110 million to $120 million is based on a $40 million to $60 million valuation dating back to 2005, plus a healthy rate of interest to the current date.
JERICHO HEIGHTS PROJECT
The Henderson Planning Commission in 2008 approved the Jericho Heights project, a 752-unit residential development on 82 acres.
Waters said the basis for the claim is that Schams has not been able to develop his project because of a lack of access dating back to 2005. That access won’t be available until Phase 1 of the bypass project is completed, he said.
At the state Transportation Department Board of Directors meeting March 11 , agency Director Rudy Malfabon said the new offer from Waters will be reviewed. He suggested that the public announcement by Waters is an effort to pressure the state to accept the offer. The agency wants Clark County District Court to grant more time to determine any facts that might have a bearing on the final price, Malfabon said.
Transportation Department spokesman Scott Magruder said the agency is still evaluating whether the fill is needed and would meet environmental standards. The offer of the property for a staging area is also being assessed, he said.
The Boulder City bypass is a top priority for state officials. Initial construction of Phase 1 of the bypass has begun, with a completion date estimated at late 2017 to early 2018.
The state needs three parcels for the right of way for the first phase of the project to Railroad Pass. In addition to the Jericho Heights property, the state is estimating it will need to spend $14 million for Railroad Pass Casino land acquisition and inverse condemnation costs. The casino will continue to operate at the location. There is also a $12 million estimate to acquire the K&L Dirt property and relocate the business.
Condemnation actions are under way on all three properties.
The second phase of the project would run south of Boulder City east to the Hoover Dam bypass and bridge. There are no right-of-way costs involved, but there is no funding, either.
The 2011 Legislature passed a bill making a toll road a potential option to get it built more quickly. The bill lifted a prohibition on toll roads in Nevada and made the bypass a possible demonstration project.
The Regional Transportation Commission of Southern Nevada is evaluating the feasibility of the toll road option.
But the state Transportation Board, which Sandoval serves on as chairman, was told at its February meeting that tolls from the bypass would likely generate only 25 percent of the cost of construction.
Contact Capital Bureau reporter Sean Whaley at firstname.lastname@example.org or 775-687-3900.