LAS VEGAS (KLAS) — Staring at a case they didn’t think they could win in court, the Clark County Commission approved an $80 million settlement on Tuesday with Gypsum Resources, the company that wants to build homes on the edge of Red Rock Canyon.
The threat of losing in court with more than $2 billion on the line forced the county to look hard at what it could afford to do, County Manager Kevin Schiller told commissioners why the staff recommended settling the case.
“For the first time I believe in the county’s history, we had to do an in-depth analysis related to our financial solvency. So in looking at that liability, significant assessment occurred,” Schiller said.
“We concluded that the county could not sustain a loss of that magnitude, which led us to evaluate the statutory process that was available to us as a local government when under a severe financial emergency. This would have resulted in a detrimental impact to the health and safety services provided by Clark County and provided to this community,” he told commissioners.
The vote to approve the settlement was 6 yes, 0 no and 1 abstaining — Commissioner Justin Jones, who disclosed that his pecuniary interest in the case posed a problem.
Jim Rhodes, the developer behind Gypsum Resources, has been trying to build on Blue Diamond Hill for decades. He finally got the upper hand then evidence came out that Jones had deleted text messages that favored developers.
That seriously damaged the county’s ability to take the case to court.
The settlement, outlined a week ago as the vote approached, included concessions from Rhodes that took some of the sting out of the county’s loss. The settlement:
- Reduced the size of the development from 5,000 to 3,500 residential units
- Sets Blue Diamond Road (SR160) as the only access to the development
- Allows the county to buy 192 acres for $1 — some of the most environmentally sensitive land located in the Red Rock National Conservation Area, including habitat for some endangered plant species
The $80 million is less than 4% of the potential $2 billion liability, Schiller pointed out. The money will come from capital funding, forcing the county to reprioritize projects that haven’t been funded yet, Schiller said.
An additional $6 million could be necessary if there are problems with the Blue Diamond Road access point.
Advocates from Save Red Rock, an organization formed to oppose Rhodes’ plans to build, spoke during public comment, imploring the county to keep fighting. They wanted assurances that the development wouldn’t grow if the settlement was approved.
Unions turned out to urge the commission to approve the development because housing is so desperately needed.
Commissioners were influenced by another case that the Nevada Supreme Court ruled on: Badlands. That conflict between the City of Las Vegas and the developer of a closed golf course cast a shadow over the negotiations as the county and Gypsum Resources negotiated in recent weeks.
The Badlands case has become a campaign issue in the race for Las Vegas mayor.
Commission Chairman Tick Segerblom said the county shouldn’t be bound by whatever developers want, but the court ruling made the county’s position tougher.
“That’s really harmful to what we’re trying to do here,” Segerblom said.
Commissioner James Gibson lamented the county’s position but said they fought to the end.
“Our apologies to those who are disappointed. We join you in being disappointed that we’re approving a project really the way that we are,” he said.
“We have done some things that we’re not proud of as a county. Those things are things that we will live with,” Gibson said.
