Las Vegas Sun

April 22, 2019

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Controversy looms over Ivanpah airport deals

The company that once had a memorandum of understanding with the Clark County Department of Aviation to look at developing the Ivanpah airport site has been involved in ongoing litigation with the county since 2002, alleging that the Aviation Department "unjustly" enriched itself through the Ivanpah deal.

The company, Hamilton Nevada LLC, originally brought six complaints against the Aviation Department in 2002. The accusations include breach of contract, intentional misrepresentation, negligent misrepresentation and three other complaints, all stemming from Hamilton's dealings with the department dating back to 1996.

In October, District Judge Mark Denton dismissed all claims against the department except one: Unjust enrichment.

Denton ruled, however, that "there is a question of whether" the accusation is appropriate for a jury trial.

"We'll let the facts speak for themselves," said Elaine Sanchez, spokeswoman for McCarran International Airport, on Thursday.

J. Randall Jones and William Coulthard, attorneys with the law firm Harrison, Kemp & Jones, which is handling the case for the plaintiff, Raymond Young, could not be reached for comment on Thursday.

The remaining complaint of unjust enrichment will be decided by district court in March. The complaint centers on the airport department and whether it benefitted from the work of Hamilton Associates to the Ivanpah airport site.

The case begins in 1996, when Hamilton Associates LLC and French firm Dumez-GTM approached the Clark County Department of Aviation with the idea of conducting a feasibility study examining whether or not Ivanpah would be a good site for a new airport, according to court documents.

According to the plaintiffs, Hamilton Associates spent $700,000 on the feasibility study. The study looked at whether the Ivanpah site could be developed into an airport that could "serve as a passenger reliever airport for Las Vegas McCarran" and as a cargo hub for Los Angeles International Airport, among other things.

The study also recommended that once the county obtained 6,650 acres from the Bureau of Land Management, Hamilton Associates would be given the right to lease the area and develop it into the Ivanpah facility.

On Aug. 19, 1997, the plaintiffs and airport officials entered into a five-year memorandum of understanding. The memorandum stated, according to the plaintiffs, that Hamilton Associates and its partners would work with the airport department to develop the Ivanpah Airport as "proposed in the feasibility study."

In 2000, Congress enacted a that allowed the county to take over BLM land to develop the airport. The deal took place after county Aviation Director Randy Walker approached the BLM, according to news reports at the time.

Walker also approached lawmakers, including Sen. Harry Reid, D-Nev., and Rep. Shelley Berkley, D-Nev., and Rep. Jim Gibbons, R-Nev. All lawmakers supported the idea to develop the Ivanpah site, according to news reports from 1999.

The plaintiffs alleged, however, that in July 2001 airport officials told Harrison Associates and its partners that it would go forward with the airport plan without Harrison Associates. According to the plaintiffs, this constituted a breach of contract since the five-year memorandum of understanding wouldn't expire for another year.

According to Denton's October decision to dismiss the complaints against the airport, the memorandum was not a valid contract, and therefore no breach took place.

The Aviation Department discounted many claims by the plaintiffs. In court documents, the defendants claimed that the August 19, 1997 memorandum plan to develop Ivanpah would be "privately financed" by Hamilton Associates and Young.

The defense also claimed that Young never told the county that Hamilton Associates' French partners, Dumez-GTM, was "only committed to Mr. Young's 'concept' through December 31, 1998, despite Mr. Young's insistence that the MOU be for five years," according to the joint pretrial memorandum from October 2004.

The defense also stated that it did everything required by the memorandum of understanding, such as including the Ivanpah airport into the county's long-range airport planning and secure BLM land for the Ivanpah facility.

One major concern from the airport's standpoint is the way Young handled the different entities involved, according to the defense.

Young first created Hamilton Associates to attract the French company, but then created a new entity, HDG Inc., which was actually the firm which signed the memorandum of understanding with the airport, according to the defense.

Young then created another entity, Hamilton-Nevada, LLC, which had no interest in the memorandum except as a shareholder in HDG, according to the defense. HDG, the original signers of the memorandum, was dissolved in Oct 1999.

Ultimately, however, the county's main complaints concern the amount of funds that Young and Hamilton Associates and its entities had.

According to the defense, Young had misrepresented to airport officials "the availability of hundreds of millions of private dollars to fund infrastructure and construction of an international air cargo center" as well as "the failures of Mr. Young to secure funding from other third parties (and the misleading communications to Clark County about these failures)."