City of Henderson on Milam sports complex: A ‘breathtaking fraud’

John Marchiano, the lawyer for developer Chris Milam, confessed to Henderson city officials last November that Milam was lying about a plan to build a major sports complex in the city, according to court papers filed by the city's legal team.

The explosive allegation of "this breathtaking fraud" is contained in Clark County District Court papers filed this week with a request for a preliminary injunction to block a Bureau of Land Management transfer of 485 acres of desert in Henderson to Milam. Milam paid the BLM $10.5 million for the land after Henderson endorsed his bid. A court hearing on the injunction request is set for Tuesday, a day before the sale is scheduled to close.

At that Nov. 28 meeting, City Attorney Josh Reid asked Marchiano about marketing materials that promoted the site for homes, not the arena project that Milam had promised in many meetings with city officials since June 2011, the lawsuit said.

In response, Marchiano, a longtime Henderson land use lawyer who was city attorney in the 1980s, spilled the beans to Reid and City Manager Jacob Snow, court papers said.

" He confessed and told the City that Milam had been lying to them regarding his intentions with respect to the Project and the land," the legal motion alleged.

"Milam lied to the City, and his attorney, Marchiano, admitted that Milam had lied,'' attorneys for the city wrote in the injunction request. "The land was meant to be developed for the benefit of the residents of Henderson ... and not be acquired by a private developer for his own pecuniary gain."

In its lawsuit, the city seeks a judge's order prohibiting Milam from using the land for anything but an arena if the BLM transfer goes through.

"The City will not allow Milam and his cohorts to reap the spoils of their fraud. Defendants, through Marchiano, have confessed to their fraudulent scheme - i.e., to acquire the Land for quick profit, rather than to proceed with the Project in good faith," the motion said.

Marchiano's lawyer, Jacob Hafter, on Thursday said there was no such admission.

"He never confessed because he never knew anything," Hafter said.

Hafter's formal response was filed with the court on Wednesday.

"At no time did Mr. Marchiano ever have any reason to believe that all of the parties to this litigation were working towards anything but the development of a sports complex," Hafter wrote in a court filing.

Hafter said it wasn't a confession. Marchiano was just trying to revise the development agreement because of fresh information that showed the arena complex Henderson expected could not be financed, Hafter wrote.

"He never saw any purported marketing materials related to single-family residential development of the land, nor did he ever hear Mr. Milam or any ... associates discuss such," Hafter wrote in court papers.

Milam is a Texas developer who had unsuccessfully pitched his arena plan for several sites near the Strip before approaching Henderson officials in June 2011.

From the start, he promised to build four major sports venues: an arena for NBA or NHL games; a stadium for Major League Soccer and the National Finals Rodeo; a ballpark for Major League Baseball games; and a stadium for NFL games.

For more than a year, he assured the city the massive project was viable.

But on Nov. 28, the day he wired payment for the land to the BLM, Milam delivered a letter to Snow terminating the project agreement.

In addition to Milam and Marchiano, the city's lawsuit names as defendants Christopher Stephens, a lawyer; Michael Ford, a land consultant and former BLM official; and Lee Haney, a public relations specialist.

The city alleges all five participated in a bait-and-switch ruse to acquire the BLM land at a below-market price, with plans to flip it for residential and commercial developers.

The city says it does not know whether the BLM will follow through on sale of the land, according to the court papers.

Neither the BLM nor Milam could be reached for comment for this article.

Contact reporter Alan Snel at asnel@reviewjournal.com or 702-387-5273.