(Chuck Muth) – They say you can’t fight City Hall. But one property owner in Las Vegas has been doing just that for seven long years now. And, believe it or not, he’s actually winning.
As every business owner knows, if you get on the wrong side of a politician or bureaucrat, they’re gonna make your life absolutely miserable. They’ll weaponize every and any law, rule, ordinance, permit or regulation to block, impede, delay or scuttle your operation entirely.
And I’m not talking only about big businesses. Once a politician or bureaucrat gets you in their sights, size doesn’t matter. Indeed, there are examples all over the country of various government boards going after kids’ lemonade stands!
You better have every *i* dotted and *t* crossed…or else.
Faced with this nightmare, most business owners succumb to the pressure and comply regardless of how ridiculous or punitive the government’s demands are. But every now and then a business owner stands up to the pencil-pushers and declares: “I’m as mad as hell, and I’m not going to take this anymore!”
Meet Yohan Lowie, CEO of EHB Companies.
In 2015, EHB Companies bought the shuttered 250-acre Badlands Golf Course which had been bleeding red ink and had zero chance of ever becoming financially viable. Mr. Lowie submitted plans to the city to convert the desert wasteland – which had already been zoned for residential housing some 35 years ago – into an upscale community development.
Unfortunately, some wealthy homeowners in the Queensridge community next door – with powerful political friends in high places – raised a stink.
Although they knew the property was zoned residential when they originally bought their homes, they wanted to keep the lush greenery of the golf course in their back yards. But, of course, weren’t willing to pay for it.
So they recruited an army of lobbyists and lawyers to gum up the works. They applied political pressure and set up a variety of bureaucratic roadblocks to keep Mr. Lowie from converting this dilapidated blight of land into a beautiful, new neighborhood community.
Instead, the city came up with a scheme to convert the property for use as “Parks, Recreation and Open Space” (PROS) without appropriate compensation. In 2018, then-Councilman Steve Seroka sponsored an ordinance that re-designated the residentially-zoned property as “open space.”
This is a complicated issue, so let me try to ‘splain it as simply as I can…
Let’s say the land was worth $1 million per acre when it was bought – if it was used to build residential homes – seven years ago. But in re-zoning the residential land as a park, let’s say the land value dropped to just $250,000 per acre.
In taking the land by arbitrarily re-zoning it and paying the developer just $250,000 per acre, the developer is losing $750,000 per acre. But adding insult to injury, it’s even worse than that.
Once the city gets title to the “park” land at $250,000 per acre, it can then simply re-zone it back to residential housing and sell it to one of its politically-favored friends for $2 million per acre – since land prices for residential housing have shot up tremendously over the last seven years.
A windfall profit!
But it’s wrong. If the government wants to “take” your land to use as a firehouse, a school, or a highway, that’s one thing. But it can’t simply take your land on the cheap, then turn around and flip it just to make a profit. That’s a violation of the property owner’s Fifth Amendment rights.
After endless delays and bad faith negotiations, with no light at the end of the tunnel, Mr. Lowie was left with no choice but to sue the city. As George Washington famously said, “Freedom and property rights are inseparable; you can’t have one without the other.”
To be clear, Mr. Lowie doesn’t have the right to build whatever the heck he wants on the land, though he is entitled to his zoning. On the other hand, the city has no right to abuse its regulatory authority to convert land zoned for housing into an open-space park without proper compensation.
“The controversy is a textbook example of political and bureaucratic arrogance and the dangers of municipalities manipulating land use and zoning rules at the expense of property rights,” the Las Vegas Review-Journal editorialized last July.
“Trouble is, the property had been zoned residential all along and the city had little legal basis to arbitrarily deny the developer the use of his land.”
And three separate judges in three separate cases (and counting) have all agreed.
Unfortunately, members of the Las Vegas City Council – bowing to political pressure – can’t seem to see the writing on the wall. They have continued with the lawsuits, at taxpayer expense, expecting EHB Companies to do what so many others have done before: Give up.
A serious miscalculation.
The city council has no one to blame but itself for losing multiple court decisions awarding Mr. Lowie millions of dollars in damages. It could have avoided all of this. It chose not to. Instead, it gambled that it could drag this out and bleed the developer to death with legal fees.
It rolled snake eyes and crapped out. Time to cut losses and walk away.
Mr. Muth is president of Citizen Outreach, a limited-government grassroots advocacy organization in Nevada. His views are his own.