The city of Las Vegas could face losses of more than half a billion dollars in connection with the legal dispute with the potential developer of the Badlands golf course if the cases go to court, according to a letter to city staff.
City Manager Mike Janssen sent the memo last month, two weeks before a district judge awarded EHB Cos. an additional $30 million in back interest alone in one of four cases.
In this case, daily interest of over $21,000 will accrue.
“Last week, I updated the City Council, all department heads and the leadership of all of our bargaining units on the status of the Badland lawsuits and the financial impact that could be upon us very soon,” Janssen wrote in the July 18 letter.
To deal with the potential consequences, the city has set up a commission to examine the possibility of a hiring freeze. In addition, those in charge are considering stopping projects and selling public land and properties, Janssen wrote.
But even if the city froze all 310 unfilled positions, it would only amount to about $30 million a year, he noted. “And many of the positions are not funded out of the general fund, so freezing them would only help us cover a small portion of the potential amount of those judgments.”
355 million US dollars
EHB CEO Yohan Lowie bought the 250-hectare golf course in 2015 with the intention of building a sprawling residential project there. However, residents of neighboring Queensridge quickly rejected this.
Shortly thereafter, EHB filed suit, claiming that the city had illegally “appropriated” property by not allowing the developer to exercise its land use rights.
In three of the lawsuits, which were separated by parcels of land, the judges agreed.
The first case, upheld by the Nevada Supreme Court, cost $64 million.
The next two cases are being appealed, but the verdicts in those cases currently total about $335 million plus interest and fees, EHB attorney Jim Leavitt told the Las Vegas Review-Journal on Friday.
The city has allocated $60 million from the fiscal year 2024 liability fund to pay the $64 million judgment, Janssen said. Fiscal year 2025 began July 1.
A fourth case, involving considerably more than 133 acres, was heard in court without a decision.
“The next three cases are expected to reach the staggering sum of over $490 (million) that the city may have to pay, based on potential appraisals as well as the fees and interest expenses estimated by the city’s attorney’s office through the end of (fiscal year 2026),” Janssen said.
Discussions over a proposed $64 million settlement for 2022, which would have included land rights, broke down shortly before the scheduled public discussion at City Hall.
The city and EHB stressed that they were open to an out-of-court solution, but that the talks had reached a dead end.
“The City Attorney and I have met with representatives of the Badlands developer on numerous occasions to attempt to negotiate a settlement, but to date the terms they have requested have not been in the best interest of the City and would likely not be approved by our City Council,” Janssen wrote in July. “With that in mind, we continue to discuss potential settlement agreements with the developer’s representatives and remain steadfast in our efforts to bring one to fruition.”
Open to “resolution of the matter”
Leavitt said Friday that recent talks had been fruitful.
“The landowners have worked tirelessly for over eight years to utilize their 250-acre residentially zoned property, only to be wrongfully and repeatedly denied by the City of Las Vegas,” the attorney wrote in a statement. “Numerous courts have now issued judgments against the City requiring the City to pay the landowners their constitutionally mandated fair compensation.”
He added: “Although the landowners have prevailed at every stage of the litigation, they remain open to resolving the matter as long as the city is willing to reach a reasonable resolution.”
If the litigation continues, the Supreme Court could decide the second and third cases by the end of fiscal year 2026, and the fourth sometime during fiscal year 2027, Janssen wrote.
“These cases have now spanned the tenures of dozens of planning commissioners and city council members, four city managers and three city attorneys,” he noted.
Contact Ricardo Torres-Cortez at [email protected].
