LAS VEGAS (KTNV) — The City of Las Vegas' budget will be bleeding tax dollars come July 1 as it begins the next fiscal year in the red.
In a budget meeting on May 21, the city council came face to face with the consequences of its decisions in the battle over Badlands.
"Only a few weeks after we presented to you the tentative budget, we were served notice with the decision by the Nevada Supreme Court that caused us to make not just some changes, but a lot of changes to be able to address that," city manager Mike Janssen told the council.
City staff had to set aside $60 million in taxpayer dollars from its capital fund to pay developer Yohan Lowie, who owns the defunct Badlands golf course near Queensridge.
"We are filing a deficit budget for next year. It's a $22.2 million deficit. If not for that one transfer — a one-time transfer, hopefully — there would be a surplus of about $2.8 million," the city's chief financial officer, Gary Ameling, told council members.
But it won't be a one-time payout, as the city has already lost three Badlands cases in court, with a fourth still pending.
"Is there any forecasting including future Badlands judgments if we do not succeed on appeals?" asked Ward 2 Councilwoman Victoria Seaman.
"What I would tell you now is we have a judgment on one of the four cases, as you know, and we are continuing to pursue all of our options related to the other three," Janssen answered.
The four cases involve different land parcels on the Badlands property. Despite residential zoning, the city's elected leaders prevented Lowie from developing homes on his property by repeatedly denying permits, which they did against the advice of their own staff and planning commission.
In a unanimous April opinion, the Nevada Supreme Court affirmed a District Court ruling that the city illegally took Lowie's land, upholding a $48 million judgment that could go up as high as $63 million once attorneys fees, property taxes, costs and interest are added.
The Supreme Court agreed the city's decision to fight the residential zoning of Badlands was a bad one with no basis in law.
As 13 Investigates first reported, it was a battle pushed by a handful of wealthy Queensridge homeowners who didn't want development on the shuttered golf course behind their homes.
The influence of those homeowners — many of whom no longer live in Queensridge — is the subject of a current ethics complaint pending against city councilman and mayoral candidate Cedric Crear, who called Lowie a "bully developer" while defending his backing of the Badlands battle in the Las Vegas Mayoral Forum earlier this month.
Speaking to Crear, moderator Jon Ralston said:
"Public officials say they're standing with the neighbors--of course they're gonna stand with the neighbors over what you're referring to as a bully developer — and then the developer sues you, goes to court and wins because the Supreme Court found that you were wrong! $48 million dollars! You can say you stood with the neighbors all you want. And by the way, it's not the end of the lawsuits."
Crear maintained, "I don't think the city did anything wrong."
"Politics can be driven by money, and in this case it very much was," said former Ward 2 Councilman Bob Beers told us in 2019, adding that he was ready to wave the white flag years before.
Now, the Supreme Court has forced the city into submission. Here's how the cases break down:
- The 35-acre case is the one that was affirmed at the Supreme Court.
- There's also a 65-acre property with a $141,017,000 District Court judgment against the city — and that's before attorneys fees, property taxes, costs and interest.
- The same is true for the 17-acre property on which the city owes $47,990,000.
- The last case, which is also the biggest, covers a 133-acre parcel. That lawsuit was on hold pending the outcome of the Supreme Court case but can now move forward.
"We're aware of the cases and we're trying to plan our funding as best we can to be ready for whatever the end result is," Janssen said in the budget meeting.
"Thank you," replied Councilwoman Seaman. "I'm just a little worried about the $20,000 a day interest that's accruing."
Lowie's lawyers say interest currently sits at about $800,000 on the parcel in the Supreme Court ruling, and it keeps going up every day the city doesn't pay the judgment.
We asked them when the money they've set aside would be paid out to the developer and how much interest would be included. A spokesperson said they're awaiting a final judgment order specifying exactly how much is owed.
