Tuesday, March 9, 2004 | 10:52 a.m.
The U.S. Supreme Court's refusal to hear a decade-long eminent domain case from Las Vegas could strengthen the city's hand in a similar case it is fighting to take property to allow a casino's expansion, Mayor Oscar Goodman said.
The nation's high court without comment on Monday refused to hear the appeal of the Pappas family, which sued Las Vegas over taking its 7,000-square-foot parcel downtown to build the Fremont Street Experience parking garage.
Meanwhile, the city remains locked in a fight with Paul and Laurel Moldon over its move in 1995 to seize the Moldons' property at 1806 S. Main St. to accommodate an expansion of the Stratosphere.
Because of the Pappas result, Goodman said, the case brought by the property owners near the Stratosphere "loses its expectation it ultimately will be successful."
The case is scheduled for trial in September. The Moldons' attorney, Chuck Gardner, had sought to have the city's claim dismissed, maintaining that the city destroyed tapes of a 1994 meeting in which officials of the Downtown Redevelopment Agency said the property was not needed.
And Gardner said this morning that Goodman is wrong about the possible implications of the Pappas case resolution. He said the issues in the Moldons' case are different from those of the Pappas case.
Gardner said among his objections is that nobody has specified how the Moldon land would be used.
"Public or private, no one knows what anyone intends to do with it," said Gardner. The city is trying to take the land "on the speculation that maybe some day someone will find a use for it."
The property continues to be owned by Moldon, Gardner said. A trial to calculate the property value is set for September, he said.
"Depending on how the value comes out, we have preserved our issues regarding public use," said Gardner.
He said although the Nevada Supreme Court turned back one challenge, when it decided in 2001 that the city of Las Vegas did not have to amend its redevelopment plan to include the Stratosphere, he has another "nine or 10 issues to go on the legality of the taking."
Eminent domain is the term used when the government takes land for "public use," a term understood to mean roads and other such infrastructure. However, a Supreme Court decision in the 1950s considered erasing "blight" as a public good, leading to the current battles across the country as cities sometimes take private property and give it to developers in hopes of stimulating the economy.
That's what happened with the Fremont Street Experience, where the Pappas land occupied part of the property that became the parking garage on the corner of Fremont and Las Vegas Boulevard.
Goodman said of the Pappas case, "I hope at this point we'll be able to pay these folks what the property is worth and we'll be able to move on."
The mayor said he wasn't sure what the property was worth, but it likely won't be the $4.5 million offered the Pappases almost four years ago.
"The price is down now. I don't get easier as time goes by, I get tougher," Goodman said. When asked what the price would be, he said, "I don't know, but I promise you I will not let the city be played for a fool."
Former Mayor Jan Jones, whose administration initiated the Pappas condemnation, said without the Fremont Street Experience, "there would be no value in the property and no jobs downtown and the cornerstone of the city's economic foundation would be gone."
That made the project a public benefit, she said.
"One of the major revenue sources in the city is the downtown gaming corridor, which pays for public services," Jones said. "If you're not going to have the resources to pay for the services you're required to give to those you represent, that's an issue. A good portion of the city revenues comes from downtown gaming, so you cannot categorize that simply as a private good."
Goodman said his stand on eminent domain is "very clear."
"I will not engage in eminent domain when we give from private to private," Goodman said. However, he did not rule out the use of eminent domain.
Harry Pappas said Monday doesn't oppose eminent domain, but contends it was misused when the city declared the job creation and tax output of the private businesses in the Fremont Street Experience to be a public benefit that outweighed Pappas' right to keep his property.
"Condemnation for what the Constitution says, for public use, I don't have any problem with that, for roads, public buildings," he said. "We weren't contesting that at all. It's just this business of taking from one private person and giving the property to another private person.
"Even more hideous here, giving it to casinos and topless clubs, and that's supposed to be public use? If casinos and topless clubs can be considered public use, the question then becomes, what isn't?"
He said the case has "major implications for everybody that owns property."
"All that basically has to happen now is city government or county government, all they have to do is declare blight, draw a circle around it, and they use that as the alibi and the Supreme Court turns a blind eye," said Pappas.
UNLV finance professor Robert Aalberts said the Supreme Court generally has deferred to local interpretations of "public purpose," when the term is used to justify taking land for private development.
"They rarely say what the local government has done is overstepping things. I think the Pappas case was fairly consistent with what's happening across the country," Aalberts said. "If a local government wants to determine something is a public purpose they have very very broad parameters."
Pappas said he didn't expect a fair shake when it came to assessing the value of the property.
"Now we go into these corrupt courtrooms with these corrupt judges in the pockets of the casino industry and we're going to let them tell us how much the property is worth? Great country we got here," said Pappas.
Pappas said he still maintains the worth of his property is $7 million. He rejected an offer in the summer of 2000 for $4.5 million.
"My family grew up here," he said. "My family came here in 1902 before any of this. We know what goes on in this rotten town, in this rotten state."
His lawyer, Grant Gerber of Elko, said simply that he was "disappointed. It was a case that should have been heard by the highest court."
Barry Levenstam, the Chicago lawyer who attempted to bring the Pappas matter to the Supreme Court, said since the petition was denied without comment, it's difficult to determine any broader implications beyond the fact that the Pappas' last appeal is over.
"It is important to understand that this ... does not mean the U.S. Supreme Court approves of or agrees with the Nevada Supreme Court's decision. The fact is nobody knows why the Supreme Court didn't take it," Levenstam said.
The issue of what constitutes a "public good," traditionally defined as such works as roads and flood control but since the 1950s expanded to include economic redevelopment, is an ongoing battle, Levenstam said.
"I have a strong belief that although we didn't get to the Supreme Court this time, you will see more of these cases brought to the court, and I do believe sooner or later the court will take another case and address this," Levenstam said.
While the Pappas case focused one instance in the city of Las Vegas, other valley entities were watching, particularly when it went to the Nevada Supreme Court. In Henderson, residents of downtown have been nervous about the discussions regarding creating an urban core in that city.
Henderson City Attorney Shauna Hughes said that her city, which recently changed its policy to allow the taking of residential homes downtown, has not used the power of eminent domain in its redevelopment district, and had no specific plans to do so.
She said the Pappas case "was a fairly fact-specific case, which is good in that it provides some general guidelines. But it's not 100 percent going to be applicable to a different set of facts."
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