Public Power, Private Gain: Nevada



Nevada is teetering on a precipice. Only two years ago, the Nevada Supreme Court allowed the condemnation of private businesses for casino development. In that case, however, the owners did not contest that their property was blighted, and blight usually provides an independent legal justification for condemnation. In 2003, the Nevada Supreme Court will be deciding another condemnation challenge in a case where the redevelopment agency declared the property blighted without even surveying the block. This condemnation, too, benefited casino interests, but the behavior of the Las Vegas Redevelopment Agency in the most recent case was so outrageous that it will be difficult for any court to approve. The decision of the Nevada Supreme Court will have a major effect on private condemnations in the future, either encouraging flagrant abuse or warning redevelopment agencies that there are limits to their power.

Private Use Condemnations


Las Vegas

When John Pappas died, he left his widow, Carol, a commercial building in downtown Las Vegas, intending that its rents would provide for her retirement.433 On December 8, 1993, the Las Vegas Redevelopment Agency (LVRA) served Mrs. Pappas with notice that it was condemning her property.434 The purpose of the condemnation was to transfer the land to a consortium of eight casinos for construction of a parking garage to serve a new downtown attraction known as the Fremont Street Experience.435 Among the 15 legal documents she received that day was one stating that she had 30 days to respond. Unbeknownst to Mrs. Pappas, however, there was a hearing in only seven days to decide whether the LVRA would get immediate possession of the property. Mrs. Pappas did not know about the hearing and did not attend. The hearing judge granted title to the agency, and the building was promptly demolished before Mrs. Pappas ever appeared in court. Later the judge recused himself from the case because he had invested in one of the casinos that had sought acquisition of the property.

 The case has been in litigation ever since. In 1996, a district court judge ruled that the condemnations were unconstitutional and illegal. In a harshly worded 65-page opinion, the judge found that the LVRA had “set itself up as an entity only unto itself.” The court found that the agency ignored many basic statutes and procedures. For example, the supposed justification for the condemnation was that the area was blighted. However, surveys of the area revealed no blight; in fact, the LVRA had not even bothered to survey Mrs. Pappas’ block.436 On March 29, 2000, the Nevada Supreme Court threw out the City’s second too-early appeal and warned the City’s attorneys against providing further “misleading information.”437 After a series of judges recused themselves for accepting campaign contributions from casino interests, the Nevada Supreme Court ruled that such campaign contributions did not disqualify judges.438 The case then returned to the trial courts for various further proceedings on other issues. It finally went up to the Nevada Supreme Court on an appeal filed by the City from the order dismissing the condemnation.439 The Institute for Justice filed an amicus brief on behalf of Mrs. Pappas. Update: The Nevada Supreme Court held oral argument on February 10, 2003, and there will hopefully be a decision later in the year.   

Las Vegas

In 1986, the Las Vegas City Council approved a long-term redevelopment plan for downtown Las Vegas. The plan’s intent was supposedly to eliminate blight and deterioration, and it encompassed a total of 2,401 acres of property, most of it privately owned. The plan also authorized the Las Vegas Redevelopment Agency (LVRA) to use eminent domain to acquire substandard properties on a case-by-case basis.


Eight years later, the Stratosphere Corporation proposed a redevelopment project. It wanted to add an 11-acre hotel/casino complex adjacent to its existing Stratosphere Tower. The company had been successful in acquiring several of the properties needed for the project, but stated in its proposal that it would require the LVRA to condemn 17 parcels of land. Paul and Laurel Moldon owned one of the parcels, which contained a commercial building. James and Aileen Crockett owned another parcel, which had formerly been a service garage for a car dealership. In April 1995, the Agency condemned both the Moldon and Crockett properties. The parties sued, claiming that the Stratosphere project had not been contemplated by the original redevelopment plan, and thus could not be implemented without amending the plan.440 The district court sided with the owners, and dismissed the LVRA’s condemnation claim. The agency appealed, and over the next six years went to great lengths to delay a ruling on the matter by the Nevada Supreme Court, including requests for nine separate extensions of time to file briefs.441 In November 2001, the Nevada high court did finally rule on the case, a 6-1 decision in favor of the City. This decision revived the City’s condemnations but did not decide the issue of public use. The case has now returned to the trial court for further proceedings.442   

*These numbers were compiled from news sources. Many cases go unreported, and news reports often do not specify the number of properties against which condemnations were filed or threatened.

433 “The Pappas Dispute,” Las Vegas Review-Journal, Sept. 3, 2000, at 2D.

434 Las Vegas Downtown Redevelopment Authority v. Pappas, No. A327519, Opinion on Motion to Dismiss (July 3, 1996).

435 Steve Sebelius, “It Was Worth Trying, Anyway,” Las Vegas Review-Journal, Aug. 27, 2000, at 1J.

436 Las Vegas Downtown Redevelopment Authority v. Pappas, No. A327519, Opinion on Motion to Dismiss (July 3, 1996).

437 Mike Zapler, “Settlement Talks Between City, Family Stalled,” Las Vegas Review-Journal, Apr. 11, 2000, at 1B; “Misleading the Court,” Las Vegas Review-Journal, Apr. 11, 2000, at 6B.

438 City of Las Vegas Downtown Redev. Agency v. Eighth Judicial Dist. Court., 5 P.3d 1059 (Nev. 2000).

439 City of Las Vegas Downtown Redev. Agency v. Pappas, No. 39255 (Nev. S. Ct.)

440 See City of Las Vegas Downtown Redevelopment Agency v. Crockett, 34 P.3d 553, 555-57 (Nev. 2001).

441 Jan Moller, “Court: City Acted Legally in Seizure Attempt,” Las Vegas Review-Journal, Nov. 16, 2001, at 1B.

442 City of Las Vegas Downtown Redevelopment Agency v. Crockett, 34 P.3d 553, 558-63 & n.48 (Nev. 2001).