City of L.V. v. 180 Land Co.

546 P.3d 1239

CITY OF LAS VEGAS, a Political Subdivision of the State of Nevada, Appellant,

v.180 LAND CO., LLC, a Nevada Limited Liability Company; and Fore Stars, Ltd., Respondents.

180 Land Co., LLC, a Nevada Limited Liability Company; and Fore Stars, Ltd., a Nevada Limited Liability Company, Appellants/Cross-Respondents,

v.City of Las Vegas, a Political Subdivision of the State of Nevada, Respondent/Cross-Appellant.

No. 84345, No. 84640

Supreme Court of Nevada.

Filed April 18, 2024

Consolidated appeals and cross-appeal from a district court judgment and post-judgment order in an inverse condemnation action. Eighth Judicial District Court, Clark County; Timothy C. Williams, Judge.

Leonard Law, PC, and Debbie A. Leonard, Reno; Jeffry M. Dorocak, City Attorney, and Jeffrey L. Galliher and Rebecca L. Wolfson, Deputy City Attorneys, Las Vegas; McDonald Carano LLP and George F. Ogilvie, III, Amanda C. Yen, and Christopher Molina, Las Vegas; Shute, Mihaly & Weinberger, LLP, and Andrew W. Schwartz and Lauren M. Tarpey, San Francisco, California, for City of Las Vegas.

Law Offices of Kermitt L. Waters and Kermitt L. Waters, James J. Leavitt, Michael A. Schneider, and Autumn L. Waters, Las Vegas; Claggett & Sykes Law Firm and Micah S. Echols, Las Vegas, for 180 Land Co., LLC, and Fore Stars, Ltd.

Davison Van Cleve, PC, and Robert D. Sweetin, Las Vegas; Matthew Leo Cahoon, Las Vegas, for Amicus Curiae Nevada League of Cities.

Goicoechea, Di Grazia, Coyle & Stanton, Ltd., and Nancy Porter and Lauren A. Landa, Elko, for Amicus Curiae City of West Wendover.

Nicholas G. Vaskov, City Attorney, and Amanda Kern and Brandon P. Kemble, Assistant City Attorneys, Henderson, for Amicus Curiae City of Henderson.

Nossaman, LLP, and Steven M. Silva, Reno; Karl Hall, City Attorney, and Jonathan Shipman, Assistant City Attorney, Reno; Micaela Moore, City Attorney, North Las Vegas, for Amici Curiae City of Reno, City of North Las Vegas, and International Municipal Lawyer’s Association.

BEFORE THE SUPREME COURT, EN BANC.¹

OPINION

By the Court, HERNDON, J.:

Our constitutional takings jurisprudence has long recognized that regulatory agency decisions that deprive a landowner of all economically beneficial use of their property—a per se regulatory taking—-require Just compensation to the landowner under both the Fifth Amendment of the United States Constitution and Article 1, § 8(3) of the Nevada Constitution. In this matter, the City of Las Vegas challenges the district court’s determination that a per se regulatory taking occurred and its $48 million award to the landowner, 180 Land Co., LLC. In its separate appeal, 180 Land challenges the district court’s award of prejudgment interest.

The totality of the circumstances surrounding the City’s handling of 180 Land’s attempts to develop the 35 acres at issue, demonstrated through 180 Land’s applications to develop the property, the official actions of the city council, and statements and actions of City representatives and employees, evinces the futility of 180 Land’s past and future development efforts on the property. With any efforts to develop the property rendered futile, the district court did not err in determining that a per se regulatory taking occurred. The district court also did not err in relying on 180 Land’s expert’s valuation of the property to determine just compensation, especially as the City neither challenged the valuation nor provided alternative valuations. Finally, both parties’ challenges to other aspects of the district court’s damages award fail to present a basis for reversal. Accordingly, we wholly affirm the district court.²

FACTS AND PROCEDURAL HISTORY

Development of the golf course

In 1981, the City adopted a Generalized Land Use Plan to reclassify 2,200 acres of land, called Peccole Ranch, to allow for "residential densities" that would align with the City’s General Plan. In 1986, the City preliminarily approved, subject to a resolution of intent, a request to zone the proposed golf course within Peccole Ranch for residential planned-unit development, or R-PD.³ Other conditions having been met, a revised master plan, the Peccole Ranch Master Development Plan, was fully approved in 1990, with the golf course acreage zoned as R-PD7.

The golf course was developed between 1992 and 1996. In 1992, the City adopted a new Las Vegas General Plan classifying the golf course acreage as "Parks/Schools/Recreation/Open Space" (PR-OS). However, the land was not rezoned; rather, the 1992 ordinance adopting the General Plan stated that it "shall not be deemed to modify or invalidate any … zoning designation." In line with that ordinance, the City confirmed to the golf course acreage’s owner in a 1996 letter that the zoning remained R-PD7 for the golf course. The golf course acreage also retained the PR-OS land designation in subsequent iterations of the General Plan through 2018. In 2001, the City adopted another ordinance regarding the golf course acreage that formally rezoned it to R-PD7 on the Official Zoning Map Atlas, and repealed any previous conflicting ordinances. Zoning Bill No. Z-2001, Ordinance 5353. In 2015, the operator of the golf course informed the then-landowners, Fore Stars, Ltd., that it could no longer make a profit operating the golf course and thereafter terminated its lease in 2016.

180 Land purchases and seeks to develop the golf course acreage

180 Land eventually came to hold all of the ownership interest in Fore Stars, which included the golf course acreage and Fore Stars’ business assets, with the acquisition being finalized in or around 2016. According to a manager of 180 Land, Yohan Lowie, in 2001 he began negotiating a "handshake deal" with the former landowners of Peccole Ranch to partner with them to purchase certain properties, and in exchange, Lowie would have the right of first refusal if the golf course acreage ever went up for sale. When the Peccole Ranch landowners started to have financial and legal struggles regarding their various properties, including the golf course, Lowie was able to negotiate an agreement that, in relevant part, provided him, or entities he owned or managed, ownership of the golf course acreage at a purported cost of $30 million. The 2005 meeting minutes from the board of directors for the Peccole-Nevada Corporation show that the board adopted a resolution "to reserve … approximately $30 million to pay off the current loan in full with Nevada State Bank related to the purchase of the leasehold interest of the … Golf Course when such loan can be paid." A separate 2014 contract, however, showed a purchase price of $7.5 million for the ownership interest in Fore Stars, which included the golf course acreage.

Although the golf course acreage contained nine parcels, 180 Land segmented it into four areas for development purposes: (1) the 35-acre site at issue in these appeals, (2) a 17-acre site, (3) a 65-acre site, and (4) a 133-acre site. 180 Land first sought development by way of an application to develop the 17-acre site filed in November 2015, which the City approved in February 2017. That approval, however, was met with significant opposition from a group of homeowners. In 2020, following litigation instituted by the homeowners, the City notified 180 Land of its entitlement to move forward to develop 435 multifamily housing units on the 17-acre parcel, with such approvals remaining valid for two years.⁴ This included changing the PR-OS designation to high-density residential and rezoning the site from R-PD7 to medium-density residential (R-3).

180 Land first sought to develop the 35-acre site in December 2016, filing (1) a General Plan Amendment as to the golf course acreage to change the designation from PR-OS to low-density residential, and, specifically as to the 35-acre site contained therein, (2) a site development review for 61 lots, (3) a Tentative Map Plan application, and (4) a waiver on the size of private streets. City planning staff recommended approving the applications.

In May 2017, while the foregoing applications regarding the 35 acres were still pending, 180 Land also applied for a new, comprehensive Master Development Agreement for the entire golf course acreage. City planning staff recommended approving the Master Development Agreement application as well. Indeed, 180 Land had collaborated on this application with the City’s planning staff for more than two years, requiring numerous meetings and revisions to the proposed application.

In March 2017, the homeowner group filed its challenge to the to the City’s approval of the 17-acre application. While that case was being litigated, the proposed development of the 35 acres was discussed at a contentious City Council hearing in June 2017, with strong public opposition to 180 Land’s applications. The City ultimately denied the applications despite the City’s planning staff having recommended approval. The City’s final decision stated that the denials were "due to significant public opposition to the proposed development, concerns over the Impact of the proposed development on surrounding residents, and concerns on piecemeal development of the Master Development Plan area rather than a cohesive plan for the entire area." Despite rejecting the 35-acre application, in part because of concerns over "piecemeal development," the City also rejected the comprehensive Master Development application in August 2017, two months after rejecting the 35-acre application. Also in August 2017, the City rejected applications from 180 Land pending since 2016 for three access points to the golf course acreage from neighboring public streets and to install fencing around two water features on the acreage. The City stated it denied the applications because of "the various public hearings and subsequent debates concerning the development on the subject site" and instructed 180 Land to file an application for a "Major Review" under the City’s municipal code. 180 Land...