Las Vegas Sun

October 7, 2022

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Eminent domain, redevelopment issues remain

In addition to becoming Las Vegas' most high-profile landmark, the Stratosphere resort marks the site of the first battle in an unfinished war over downtown redevelopment.

Stratosphere's attempts to use the Las Vegas Redevelopment Agency to condemn the parking lot of the next-door Aztec Inn ignited a lawsuit and touched off a string of legal defeats that has left all eyes on the Nevada Supreme Court, wondering about the future of redevelopment.

It all started in 1994 when Stratosphere officials got the city's redevelopment agency to agree to force another landowner to sell property, even if he doesn't want to. The city, which has backed the Stratosphere as another way to boost the economically depressed downtown area, agreed.

But owners of the Aztec, who had spent $700,000 to renovate their property in hopes of cashing in on redevelopment gains, objected to the move, fearing the loss of the parking lot would end their business altogether. They hired former Deputy Attorney General Chuck Gardner to fight the action.

Gardner won, convincing District Judge Don Chairez that taking one casino's land and giving it to another casino was unconstitutional. In addition, Chairez ruled that the city had not followed state laws that require governments to hold public hearings when they introduce new projects into redevelopment plans.

The city, for its part, argued that it had crafted a redevelopment plan in 1986, and that met the requirements of the law. But that plan was adopted years before the Stratosphere was ever conceived, and thus no public comment on the new resort -- or the taking of the Aztec lot -- was possible.

Eventually, the Stratosphere settled with the Aztec, which agreed to sell its parking lot for an undisclosed price. Bill Maxwell, general manager of the Aztec, said it was "considerably more" than the $170,000 his casino was offered before the eminent domain fight and that the Aztec was "very satisfied" with the settlement.

Gardner said the settlement was evidence that redevelopment agency action was unnecessary.

"They built this thing anyway," Gardner said. "Obviously we know eminent domain isn't necessary to build a casino. It has never been necessary in this state.

"Redevelopment to me is just one more aspect of using public money, power and influence to help the big guys."

But Dave Oka, the city's acting redevelopment manager, said the public benefited from the city's involvement in the Stratosphere project. For example, 15 percent of the workers the new resort will hire live in the redevelopment area, including Meadows Village, the poor neighborhood directly behind the resort.

Oka said eminent domain is not used frivolously. "What we've heard from the City Council is they have always felt using eminent domain is a last resort," he said. "Such a powerful tool has to be used judiciously."

In the Stratosphere case, eminent domain was used in "about a dozen" cases, Oka said. Most landowners agreed to take the city's offered settlement or settled separately with the Stratosphere.