Lawyers’ payment of $500K approved by Las Vegas in Badlands case

The approval came despite the protests of Councilwoman Victoria Seaman, who said the city should settle the case rather than keep paying money to outside attorneys to fight the case when it has 14 civil attorneys on staff.

“I refuse to pour another $500,000 down this black hole at a time when the city is freezing needed positions and looking to cut capital improvement projects,” Seaman said before Wednesday’s vote. “We must settle this lawsuit now and not continue to throw good money after bad.”

The expenditure was included in the council’s consent agenda, a package of items that are generally approved in a single vote. On Wednesday, Seaman exercised her ability to vote against a single item on the consent agenda while approving the rest of the package.

No other council member commented on the payment or voted against it. The law firms receiving the funds will be McDonald Carano and Brownstein Hyatt Farber Schreck, both from Las Vegas, Leonard Law in Reno and Shute, Mihaly & Weinberger in San Francisco.

Payments will come from the up to $1 million in general funds recently earmarked for that purpose for this fiscal year, which began last month, according to the city. The agenda item also noted that city attorneys are taking part in litigating the suits.

The legal battle with EHB Cos.’s subsidiaries began after the company’s CEO and developer Yohan Lowie purchased the defunct 250-acre golf course near Alta Drive and Rampart Boulevard in 2015.

Residents of the adjacent Queensridge neighborhood quickly came out against it, and the city blocked the development.

EHB sued shortly thereafter, alleging that the city illegally “took” property by not allowing the developer to exercise its land-use entitlements for an expansive housing project he intended to build.

$400M and counting

Courts litigating three of four lawsuits have ruled in favor of EHB to the tune of about $400 million, EHB attorney Jim Leavitt said last week. One suit was upheld by the Nevada Supreme Court and the other two are under appeal.

Negotiations for a possible settlement were ongoing, according to the city and Leavitt, who characterized recent talks as promising.

In an internal memo sent last month, City Manager Mike Janssen told staff that the city had earmarked $60 million to pay for a $64 million judgment in the first lawsuit, adding that losses for the remaining cases were “expected to reach a staggering sum of over $490 (million) that the City could be required to pay.”

“Folks, we have a very tough road ahead of us but as I’ve seen in my 27+ years at the city, the City Team has a way of coming together during tough times and finding a way to persevere,” Janssen said. “I’m confident that by working together we’ll do it again.”

Two weeks later, a District Court judge awarded another $30 million to EHB in back interest and fees alone for one of the cases. Interest in that case is accruing at a rate of more than $21,000 a day.

A fourth case for a substantially larger 133 acre-parcel was moving through court with no decision yet.

Janssen said that the city had established a committee to explore hiring freezes for some of its 310 unfilled positions, noting that the city would only save $30 million a year if it paused all new hires. He said the city was also considering delaying projects and selling public land and properties.

Leavitt previously told the Las Vegas Review-Journal that the city was poised to take ownership of the Badlands property as it pays its verdicts.

As of earlier this month, the city had spent nearly $6.3 million on outside counsel since 2018.

Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.