Controversial Texas developer Chris Milam never planned to build a pro sports complex in Henderson as he promised to city officials and schemed with associates to get a sweetheart land deal while intending only to flip the property for residential development, according to a lawsuit filed against Milam by the city of Henderson on Monday.
The lawsuit alleges Milam and four accomplices misled Henderson officials about his "Las Vegas National Sports Center" and plans to attract a pro team, arguing Milam used the city to win a bid on 480 acres of federal land he conspired to sell "piecemeal to residential and commercial developers at a substantial profit."
The lawsuit also lists as defendants John Marchiano, Christopher Stephens, Lee Haney and Michael Ford. Marchiano and Stephens worked as lawyers on the deal, while Haney did public relations.
Ford, a land and energy consultant with Abbey, Stubbs & Ford, LLC, is a former Bureau of Land Management official who worked with Milam on the federal land deal. Ford previously did consulting work for the city of Henderson on an unrelated project, a city official said.
According to a complaint filed in Clark County District Court on Monday, Stephens is a California attorney who "regularly engages in the unauthorized law in Nevada."
According to the lawsuit, "(Milam) and other Milam Defendants conspired to utilize the Master Plan Agreement as an instrument of fraud to obtain land … below what a true competitive bidding process would yield … Milam believed that his fraudulent scheme would at all times remain unknown to the City."
Court papers cite a similar but unrelated prior judgment against the developer, saying "Milam is a man with a troubled past, and is no stranger to fraud."
The legal action, filed by the Las Vegas law firm of Bailey Kennedy on behalf of the city, seeks a restraining order or injunction to block Milam and his associates from selling the land or using it for any purpose not covered by a project land agreement. The city also asks for real and punitive damages to be set at trial, plus its costs for bringing the lawsuit.
Of the five listed defendants, only Haney could be reached for comment.
"I just received a copy of the lawsuit,” she said in an email Monday evening. "I will need to review the allegations with my attorney, but even without doing so, I know that I never made any knowing misrepresentations and that I never stood to gain financially from either the acquisition or the sale of the land. As the spokesperson for the project I was always told that Mr. Milam intended to develop an arena/sports complex on the property and can assure you that I wanted and worked diligently towards the development of an arena/sports complex on that site for our community."
Milam paid the BLM $10.5 million for the land, but the agency has delayed closing until Feb. 6, with the money held in escrow.
Milam first approached the city in June 2011 about a plan to build four venues: an arena for NBA or NHL games; a stadium to host Major League Soccer games and the National Finals Rodeo; a park for Major League Baseball games; and a stadium for NFL games.
The city moved quickly in response. In September 2011, it nominated Milam to buy the BLM land, effectively endorsing his sports complex plan. In October 2011, the city changed its land use plan and zoning to accommodate the project. Milam’s Silver State Land was the sole bidder, and in June 2012, the BLM declared it the winner.
In nine meetings with the city from April to November 2012, the defendants repeated that the sports complex project was viable and funded, according to the lawsuit. But in mid-November, the city received information from residential developers that Milam and his "confederates" were marketing the land to third parties for single-family residential use, the lawsuit said.
City Attorney Josh Reid sent Milam a letter on Nov. 26, warning the city will not rezone the land for residential use and that Milam should stop marketing it for homes. Milam did not respond.
The lawsuit alleges Milam’s associates worked to deceive the city.
"Marchiano, Stephens, Haney and Ford knew or had reason to know that Milam deceived the city with regard to the Project, and each of them helped facilitate his scheme to defraud the City by creating an appearance of legitimacy," the lawsuit alleges.
The lawsuit also singles out Ford and alleges he pressured "the BLM into issuing the Patent to the Land to the detriment of the City and to the benefit of the Milam Defendants."
Ford threatened Reid during a Nov. 30 phone conversation, "stating that he and the City should not interfere with the transfer of the Land to Milam, and indicated that there was nothing that the City could do to prevent the BLM from issuing the patent."