September 9, 2003

By Sean Whaley

Review-Journal Capital Bureau

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Carson City, Nevada - Las Vegas city officials won a legal victory Monday when a divided state Supreme Court upheld the use of eminent domain to acquire property owned by the Pappas family for the Fremont Street Experience in 1993.

The court said taking the Pappas property for a parking garage for the downtown redevelopment project did not violate the state or U.S. constitutions.

"We conclude that in this case, substantial evidence supports the (redevelopment) agency's determination that the project in issue facilitates redevelopment," the court said in a 5-2 ruling. The decision returns the case to Clark County District Court for a trial to determine what the Pappas family is owed for the 7,000-square-foot piece of property acquired through the eminent domain action a decade ago.

This is what attorneys for the city asked the court to do in oral arguments in the case in February.

But Harry Pappas said he will seek the U.S. Supreme Court's intervention. A number of legal foundations are interested in taking the case to the nation's high court, he said.

"We're not surprised by the ruling at all," he said. "We pretty much knew the Nevada Supreme Court was in the pocket of the gambling industry."

He said the ruling wasn't a victory for the city, but for downtown casino interests who benefited from the taking of the family property.

But Las Vegas attorney Dan Polsenberg, who represented the city in the case, said it is a big victory for the city because it reaffirms the redevelopment and eminent domain polices that have been in effect around the country for decades.

"Mayor (Oscar) Goodman doesn't use eminent domain the way some prior mayors did, but the decision says the city has the power to redevelop and change downtown," he said.

Polsenberg said he does not believe the U.S. Supreme Court will take the case because it breaks no new ground.

"There is nothing new or revolutionary here," he said. "It stays the course."

In the February arguments, Pappas attorney Glade Hall asked the court to rule for Harry Pappas and his family, saying the city and its redevelopment agency violated their constitutional property rights when it took the land.

A ruling for the Pappas family would have had the effect of giving them control of the portion of the $23 million parking garage built on their former property on the corner of Fremont Street and Las Vegas Boulevard.

The case was an appeal by the city of a 1996 ruling by former District Judge Don Chairez in favor of the Pappas family.

Chairez said the city broke several state and federal redevelopment statutes. He accused officials of taking Pappas' property without just cause and then handing it over to casinos.

Hall said in the February arguments the taking was not legal because the land was never put to use for redevelopment purposes. Building a downtown attraction and adjacent parking garage for casinos is not redevelopment, he said.

But the court majority opinion, written by Justice Nancy Becker, said that as long as any individual redevelopment project bears a "rational relationship" to the eradication of physical, social or economic blight, it serves a public purpose within the power of eminent domain.

The Pappas family argued that blight did not exist on their property. But Becker said the fact that the Pappas' property itself was not blighted did not prohibit its taking through eminent domain proceedings aimed at improving an entire area.

The court did find that the Pappas family is entitled to present evidence that city or redevelopment agency employees interfered with the Pappas family relationships with their tenants prior to the eminent domain action.

This claim, along with the value of the taken property, will now be considered in the Clark County District Court.

Justices Myron Leavitt and Bill Maupin wrote separate dissents.

Leavitt said the taking violated both the state and federal constitutions.

"The appropriation of a private citizen's property by eminent domain proceedings must be for a `public use' within the meaning of those words in the constitution," he said. "The government's taking of property and giving it to another for a private use is unconstitutional and void."

Leavitt also said there was no evidence of blight around the Pappas property.

Maupin said the conversion of Fremont Street, "the oldest and one of the most traveled public boulevards in the city," to a pedestrian area was a major departure from the city's redevelopment plan.

Because the city did not amend its plan to reflect the change, the resulting eminent domain action was improper, he said.

Amending the plan would have giving affected property owners a chance to air their views, Maupin said.

The case arrived in the state Supreme Court after years of delays and an effort by Goodman in August 2000 to settle the matter with a $4.5 million payment to the Pappas family. The family rejected the offer, saying it was not enough.

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