Red Rock Canyon developer hurls accusations at county commissioner

The developer behind a controversial plan to build 3,000 homes overlooking scenic Red Rock Canyon filed for bankruptcy nearly two years ago, blaming much of its financial predicament on project delays by Clark County.

Now attorneys for Gypsum Resources LLC, the company behind the yearslong effort to develop on Blue Diamond Hill, have set their sights on one of the project’s biggest opponents: Clark County Commissioner Justin Jones.

Gypsum Resources has accused Jones of misleading the state ethics commission and illicitly swapping political favors with fellow Democrat Gov. Steve Sisolak, when Sisolak was still serving as a commissioner and chairman of the board, in order to stymie the disputed project.

The company also claims the county is trying to cover up “facts about governmental misconduct.”

The county declined to comment Monday, citing its practice of choosing not to speak publicly about litigation, but Sisolak’s campaign and Jones refuted the claims. Jones also noted that Gypsum Resources attorney Todd Bice for years has been involved in Republican politics and has attacked him in the past.

“It’s not a coincidence that it is being drummed up by the same people who have tried to smear my political career for over a decade,” said Jones, a former one-term state senator.

The accusations were made in a recent federal court filing as part of Gypsum Resources’ Chapter 11 bankruptcy proceedings and ongoing lawsuit against the county for breach of contract, due process violations and other alleged wrongdoings related to project delays over the past decade.

For longer than that, development on the site of the gypsum mine has been fiercely controversial due to environmental concerns, and Jones, an attorney, had represented one of the project’s most adamant detractors: Save Red Rock.

Sisolak’s campaign: Claims are “grave mischaracterization”

In October 2018, Jones was still working for the nonprofit environmental advocacy group in litigation against the county and Gypsum Resources over the validity of a 2011 concept plan for the housing project.

Jones was also in the final stretch of a race for an open county commission seat. Sisolak, the commission chairman, was winding down his own ultimately successful contest for governor.

Gypsum Resources submitted an application seeking an exception to push its project forward without first receiving approval from the Bureau of Land Management for a necessary access road to the site.

The vote on the waiver and other project plans was scheduled for December 2018, a month before the ultimately elected Jones would be sworn into office. It was pushed back at the request of Gypsum Resources, allowing Jones to participate in an unanimous decision against the waiver in April 2019.

But the company contends that the delayed vote was the product of a pre-election “clandestine deal” between Jones and Sisolak: If Sisolak agreed to come out against the waiver, Save Red Rock would drop its lawsuit against the county and Sisolak would receive public support from environmental advocates weeks before the election.

In a statement Monday, Sisolak’s gubernatorial campaign said he “has long worked to protect Nevada’s public lands,” earning him the support of groups such as the League of Conservation Voters and others.

“To suggest his decision to mitigate the effects of developing near Red Rock Canyon — something he first voted in support of in 2011 — was anything other than honoring his longstanding commitment to protecting Red Rock is a grave mischaracterization,” the campaign said.

‘An unartful email’

Jones spoke to Sisolak on Oct. 20, 2018, and sent an email to Sisolak’s campaign spokesman Jim Ferrence later that day, laying out the proposed resolution, according to an email from Jones to Ferrence that is included in Gypsum Resource’s recent legal filing.

Jones would dismiss all claims in Save Red Rock’s lawsuit, and the group upon request would publicly show support for Sisolak, if the gubernatorial candidate committed to denying the waiver request, the email showed. If the lawsuit was to go to trial, Jones indicated in the email that it would “likely be uncomfortable” for Sisolak and others in the county.

In an interview Monday, Jones acknowledged making that proposal, underscoring that he has no regrets about trying to protect Red Rock Canyon from sprawl development. But he said that there also had already been public support for Sisolak from the environmental community.

“It was a pretty minor thing at the end of the day,” he said. “It was probably an unartful email to send to (Ferrence).”

He “entirely” rejected assertions by Gypsum Resources that he and Sisolak engaged in a “quid pro quo” or “clandestine” deal-making, and he called it “ridiculous” to suggest that he intentionally withheld information from the Nevada Commission on Ethics.

Conflict of interest?

Jones immediately after being sworn into office in January 2019 sought an opinion from the ethics commission about a potential conflict in voting on Gypsum Resources-related matters. The commission concluded that he did not need to abstain from voting as long as he disclosed his prior relationship with Save Red Rock.

“I was trying to do the right thing,” Jones said, adding that he was under no obligation to seek the commission’s opinion and had provided all information he believed relevant to their decision.

Gypsum Resources, however, accused Jones of withholding facts about his ties to the environmental group, saying that the ethics commission’s opinion was predicated on a “wholesale misrepresentation of Jones’ activities,” according to the lawsuit.

Bice, the developer’s attorney, declined to comment on the filing Monday.

Resolution comes to fruition

The developer’s application was set to be heard during a zoning meeting on Dec. 5, 2018, after the election but before new commissioners — one of whom would ultimately be Jones — were to be sworn in to vote on it.

Four days after Jones said he spoke to Sisolak, the Nevada Conservation League released a statement praising Sisolak who had announced he opposed Gypsum Resources’ request to waive conditions and he supported allowing incoming commissioners to weigh in.

Sisolak said at the time that he would “not be a party to a lame-duck vote” on the issue.

Two weeks later, Save Red Rock agreed to drop its lawsuit against the county and Gypsum Resources.

On Dec. 4, 2018, the day before the waiver request was expected to be heard by the board, then-Commissioner Susan Brager announced she had requested it be delayed, earning Sisolak public praise from Save Red Rock.

Accusations merit response, more time

Gypsum Resources has also accused the county of seeking to stop certain discovery in the ongoing lawsuit to prevent “more of the unseemly facts coming to light,” according to its recent filing.

The county, seeking to limit the scope of discovery to “official record” documents, claimed in a May 7 legal filing that it is “completely baseless” to suggest the county has engaged in a pattern of hiding documents. The county had produced more than 350,000 pages of electronic records in the lawsuit, according to the filing.

In a filing on Friday, the county requested to delay a scheduled hearing this week so that it could adequately respond to the developer’s wide-ranging accusations, noting that the claims directed at Jones merited a response from him though his own counsel.

Jones said Monday he was reviewing his options.

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter. Review-Journal staff writers David Ferrara and Colton Lochhead contributed to this report.