L. Neil Smith's

Number 6, March 1996

'The Most Valuable Corner In the World'

By Vin Suprynowicz

Special to The Libertarian Enterprise

         In the case of the City of Las Vegas Downtown Redevelopment vs. Carol Pappas, et al.due to be heard before Judge Don Chairez in Las Vegas District Court Feb. 28 -- attorneys for an elderly Greek widow are contending the city had no right to seize Mrs. Pappas' main source of income -- the two blocks of downtown retail rental property which had been operated by the Pappas family since John Pappas served Boulder Dam construction workers at his White Spot restaurant in 1931.
         And if they had no right to seize it, the Pappas family argues, the city certainly had no right to then hand over the property to a private third party for use as a parking garage, supposedly vital to the success of the quasi-private (but heavily tax-funded) pedestrian mall redevelopment scheme dubbed the Fremont Street Experience.
         The enabling legislation on which the city relied -- according to the Pappas brief -- requires that cities seeking to seize property in such circumstances prove the area is "blighted," that the redevelopment project envisioned cannot go forward without the property sought, and that the private parties can't afford to acquire the property on their own.
         But office occupancy rates in downtown Las Vegas are far above national averages, and the downtown Las Vegas hotel room occupancy rate runs 92 to 94 percent -- again far above national averages.
         Like most modern downtowns, in this advanced stage of our enlightened welfare-police state, the area in question could be called tacky. At night, the suspicion is widespread that the people who gather there are more likely to engage in prostitution and drug sales than to toast marshmallows and sing "Cum-by-ah." But is downtown Las Vegas, which still sets records every year for tourists attracted and millions earned, "blighted"?
         The Pappas attorneys have dug up a transcript of a Dec. 20, 1989 meeting of the Las Vegas Redevelopment Agency, at the time when Bob Snow was in the process of being dissuaded from building his "Main Street Station" (the last great redevelopment scheme to fail downtown) on or near the Pappas site, and convinced to shift it to the less likely Main Street site (cuddled in the warm embrace of a concrete highway overpass) where it eventually failed.
         In that 1989 hearing, attorney George Rudiak announced himself as "representing all of the downtown casinos and hotels," and then promptly introduced expert appraiser Gary Kent, who testified about the downtown: "It's hard for me to imagine how it can be considered a blight site or a blight area."
         Next rose Steve Wynn, representing the Golden Nugget -- and now one of the prime owners and movers of the Fremont Street Experience -- to oppose the city contributing $15 million in parking garage money to Snow's Main Street Station.
         "We're talking about a hard core reality down here about business," objected Mr. Wynn in 1989. "The downtown isn't dying. Where did that idea get hot around here? The downtown doesn't need this kind of refurbishment with public money. ... This has got to do with the misuse of public funds."
         But the Pappas lawyers don't need to reach back even those six years. In a sworn deposition taken Feb. 9, 1996, Jack Gaughan, owner of the Union Plaza hotel and casino and arguably the largest landowner downtown, testified on the topic of whether the new parking garage was needed: "I would have never built the garage."
         "I never saw 150 cars in there since it's been built," testifies the always-colorful Mr. Gaughan. "You must have been drinking."
         "Do you consider any of your (180) downtown properties blighted?" Gaughan is asked in his Feb. 9 deposition.
         "No," says Mr. Gaughan.
         The Pappas brief goes on to detail billions of dollars of new investment being made both in Nevada and in gaming enterprises outside the Silver State by the downtown hotel corporations that share ownership of the Fremont Street Experience at the very time the Pappas property was being seized -- indicating they could have bought the Pappas holdings outright, if they'd cared to pay a market price.
         So, why was the Pappas property seized, for a 1,300-space parking garage which Mr. Gaughan says has "never parked 150 cars" since the day it opened?
         "They realized what that property would be worth, if someone else came in like Snow and wanted to build a casino there," says Harry Pappas. "But these guys don't want the competition, see?
         "Notice the title to that property has now been passed to the Fremont Street Experience Limited Liability Corporation. So they can sit on it as a parking garage until the day comes when they want to build a casino there. I mean, it's the corner of Fremont Street and the Las Vegas Strip, and it's zoned for unlimited gaming. It's the most valuable corner in the world. Why do you think we held onto it, paid taxes on it, all these years?"
         Political pressure on Judge Chairez to give an "all-clear" to these kinds of tactics will be considerable. But Judge Chairez -- along with other local justices -- has been carving a sterling record of standing up for private property rights in recent months, turning aside one city abuse of "third party" eminent domain after another.
         The question here is no smaller than whether it's worth investing in private property any more in a city like Las Vegas.
         Is it worth paying your taxes for 60 years in the hopes your grandchildren may profit from your foresight? Or will the politicians be allowed to seize that birthright, turning it over to well-heeled latecomers with more political juice, who can be made to pay not what the owner might ask, but only a bargain-basement "assessed valuation"?

Vin Suprynowicz is the assistant editorial page editor of the Las Vegas Review-Journal. Readers may contact him via e-mail at vin@lvrj.com. The web site for the Suprynowicz column is at http://www.nguworld.com/vindex/. The column is syndicated in the United States and Canada via Mountain Media Syndications, P.O. Box 4422, Las Vegas Nev. 89127.

Imagine a government bent on sharing its sensitive, caring, environmentally friendly ways with an entire universe. Then imagine the army it needs. CLD -- Collective Landing Detachment. Dark military SF. By Victor Milan. From AvoNova.

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