Badlands price tag could top half a billion dollars, city manager’s memo warns
The city of Las Vegas could incur losses that surpass half a billion dollars in the legal battle with the would-be developer of the former Badlands golf course if the city’s lawsuit losses continue to play out in court, according to a letter sent to city staff.
City Manager Mike Janssen sent the memo last month, two weeks before a District Court judge awarded another $30 million in back interest alone to EHB Cos. for just one of four cases. Interest in that case is accruing at a rate of more than $21,000 a day.
“Last week, I briefed the City Council, all Department Directors, and the leadership of all of our bargaining units on the status of the Badlands lawsuits and the fiscal impact we could be facing very soon,” Janssen wrote in the letter.
The potential city liability would represent a quarter of the city’s total annual $2 billion budget. To deal with the potential fallout, the city has established a committee to explore hiring freezes, and officials are considering pausing projects and selling public land and properties, Janssen wrote.
But freezing all of the city’s 310 unfilled positions would only save about $30 million a year, according to Janssen. “And many of the positions are not funded by the General Fund, so freezing them all would only help us address a small portion of the potential amount of these judgments.”
$355 million
EHB CEO Yohan Lowie bought the defunct 250-acre golf course in 2015 with the intention of turning it into an expansive housing project. Residents of the adjacent Queensridge neighborhood quickly came out against it, and the city blocked the development.
EHB sued shortly thereafter, alleging that the city illegally “took” property by not allowing the developer to exercise its land-use entitlements.
Judges in three of the lawsuits, one each for three of the four parcels Lowie had purchased, have agreed.
The first case, which has been upheld the by Nevada Supreme Court, has a price tag of $64 million. The city earmarked $60 million from fiscal year 2024 liability fund to pay for the $64 million judgment, Janssen said. Fiscal year 2025 began on July 1.
The next two cases are under appeal, but judgments from them sit at around $335 million with accumulating interest and fees, EHB attorney Jim Leavitt told the Las Vegas Review-Journal on Friday. A fourth case for a substantially larger 133 acre-parcel was moving through court with no decision yet.
“The next three cases, based on potential valuations along with fees and interest charges estimated by the City Attorney’s Office through the end of (fiscal year 2026) are expected to reach a staggering sum of over $490 (million) that the City could be required to pay,” Janssen said.
Discussions for a $64 million proposed settlement in 2022 that would have included land entitlements collapsed shortly before it was set to be discussed publicly at City Hall.
The city and EHB have maintained that they’re open to a resolution out of court, but the discussions had reached a stalemate.
“The City Attorney and I have met multiple times with the Badlands developer’s representatives to try to negotiate a settlement, but so far the terms they have requested have not been in the best interests of the City and were unlikely to be approved by our City Council,” Janssen wrote in July. “With this being said, we continue to discuss potential settlement agreements with the developer’s reps and we remain steadfast in our efforts to try to see one become a reality.”
Open to ‘resolving the matter’
Leavitt said Friday that more recent discussions have been fruitful.
“The Landowners have worked tirelessly for over eight years to use their 250 acre residentially zoned property, only to be wrongfully and repeatedly denied by the City of Las Vegas,” the attorney wrote in a statement. “Numerous Courts have now entered judgments against the City ordering the City to pay the Landowners their constitutionally mandated just compensation.”
He added: “Even though the Landowners have prevailed at every phase of the litigation, they remain open to resolving the matter as long as the City is willing to arrive at a reasonable resolution.”
If the litigation continues, Janssen said that the second and third cases could be decided by the Supreme Court by the end of fiscal year 2026, and the fourth sometime during fiscal year 2027, Janssen wrote.
“These cases have now spanned across the tenures of dozens of Planning Commissioners and City Council members, four City Managers, and three City Attorneys,” he noted.
Contact Ricardo Torres-Cortez at rtorres@reviewjournal.com.