BLM terminates controversial land deal in Henderson

The Bureau of Land Management has terminated a deal for the purchase of 480 acres of federal land in Henderson once earmarked for an ambitious professional sports complex.

The lenders of controversial Texas developer Chris Milam had hoped to close on the land purchase Monday, but the BLM told the Review-Journal on Friday that it will not issue a patent for the land and will return the purchase deposit.

The BLM notified Silver State — the party that was scheduled to close on the land purchase — and the city of Henderson that the property title will not be issued, said Celia Boddington, a BLM spokeswoman in Washington, D.C. The site is adjacent to the Inspirada community and east of The M resort.

“We are taking this action because circumstances have changed significantly since the BLM accepted Silver State’s purchase offer,” Boddington wrote in an email to the Review-Journal.

Asked in a phone interview about the “circumstances” that have changed since Milam won the bid to buy the land with a $10.56 million offer, Boddington said, “Your newspaper has documented them.”

In the phone interview, Boddington said, “We feel it’s the right thing to do. It protects the pubic interest.”

The BLM decision to pull the plug on the land transaction ends an ugly ordeal for the city and Milam after he told the city on Nov. 28 that his proposal to build a $650 million sports arena was not viable.

But there was a hitch: Milam may have bailed on the arena but wanted to continue buying the land from the BLM that was zoned to host the sports complex.

That prompted the city to file a lawsuit in late January alleging Milam and four consultants conspired to commit fraud by creating a ruse to propose an arena when they actually planned to buy the land from the BLM at a discount rate of $22,000 per acre and then flip the land to homebuilders.

The city and Milam settled two months ago, with the understanding that Milam’s lenders would take over the BLM land purchase deal and Milam would be banned from doing business in the city.

The Milam lenders were Rockafellow Investments LLC and II C.B. LLC. They loaned Milam $16 million to cover the $10.5 million cost of buying the land from the BLM.

Under the Milam-Henderson settlement, Milam’s lenders were required to pay the city $4.25 million as part of the BLM closing. But that is off the table because of the BLM decision to not issue the patent.

Henderson spokesman Bud Cranor said the BLM decision was “consistent with our original position with this deal — that the transfer of the patent not occur.”

Cranor added, “This is certainly consistent with what we believe should have happened originally when Milam attempted to back out of his contract with the city, which was the whole reason for the litigation in the first place.

“This allows the process to unwind, and the land now reverts back to where it was before. With the land remaining with the BLM, it gives us the opportunity to work with them as we move forward in the future to make sure any development in that area is consistent with the purposes and plans the city has for that part of Henderson.”

Cranor said the Milam deposit on the BLM land was $2,132,000.

The Review-Journal contacted the office of Texas lawyer Walter Batla, who was representing Milam’s lenders. A person who answered the phone said Batla was out of the office and unavailable until Monday.

Developer John Ritter, chief executive of the master developer of Inspirada, welcomed the BLM decision. He criticized the process that allowed Milam to make a winning bid of $10.56 million.

“The BLM did the right thing,” Ritter said.

Review-Journal stories about the role of former BLM Director Bob Abbey in the BLM purchase deal helped prompt the Office of Inspector General to launch an investigation into the BLM land deal. That is because Abbey is a business partner of former BLM official Mike Ford, who worked as a consultant for Milam.

In court papers, the city alleged that Abbey used his political influence to help the BLM land deal move forward. A congressional committee chairman also cited Abbey’s role as a potential conflict that warranted a closer look.

Abbey and Ford have denied they did anything wrong.

In an Aug. 2, 2011, email from Ford to Milam, Ford said he talked to his friend Abbey and informed Milam “we can expect full support and cooperation at the local, regional and national level.”

The city also has reached a tentative settlement with Ford and public relations specialist Lee Haney, who were also named as defendants in the city’s Milam fraud lawsuit.

Ford said his firm’s insurance company has agreed to pay the city $10,000 “to end the nonsense.”

“This issue was always about a dispute between the developer (Milam) and the City of Henderson as it related to the Development Agreement,” Ford wrote in an email to the Review-Journal. “It was NEVER about the BLM land sale, which was conducted in complete compliance with all federal rules, laws, and regulations.

“There was never any fraud, or any other wrong doing on my part, as it related to the BLM land sale,” Ford wrote. “Now that we have settled, we intend to work on restoring our reputation after the pummeling we have unfairly absorbed over the last 4 1/2 months.”

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