Government Affairs Report – July 2018

“Growth not wealth brings the world to go round.” – Unknown

Nevada’s Primary Election was on June 12. For those races which are contested (not all are; see prior article), the opponents are now determined, and by the time this newsletter is published, at least a couple of haymakers will have been thrown. November is right around the corner, and the candidates have begun cozying up to constituents and donors alike, seeking to gain an early edge. Make no mistake, misinformation is at an all-time high, and in some races, the stakes could not be more vital. Given recent developments with respect to passage of an anti-development ordinance in the City of Las Vegas, we thought it would be beneficial to use this month’s newsletter to discuss some of the legislation which directly affects NAIOP, and the roles of some recent candidates in this legislation.

Status of Local Anti-Development Legislation
In a prior newsletter, we wrote that in the City of Las Vegas, Councilman Steve Seroka (who just last year, bested incumbent Bob Beers in the race for CLV Ward 2) had proposed an ordinance which has the singular purpose of impeding development. On May 16, 2018, the ordinance passed. City of Las Vegas Ordinance 2018-5 requires the owner of an existing golf course or open-space property to hold a neighborhood meeting prior to the submittal of any application to redevelop the property. The Ordinance is poorly drafted and legally flawed. In addition to the single “required” neighborhood meeting, the Ordinance sets forth several factors which are “encouraged” but not “required.” To that end, the structure of the Ordinance invites abuse (e.g., should an application be denied for failure to complete an “encouraged” item, would that not be the definition of “required”?). As to the substance of the Ordinance, it changes a process which has worked – without complaint – for more than 2 decades. The Ordinance requires a neighborhood meeting even prior to filing an application for redevelopment of open-space or a shuttered golf course, yet, the Las Vegas City Council has never had any reservation about abeying an item for the purpose of compelling the applicant to hold neighborhood meetings, because the power to compel neighborhood meetings was already within the Council’s purview. Accordingly, the Ordinance is, at best, redundant. However, given the Ordinance now requires a neighborhood meeting pre-application on all such open-space or golf course redevelopment projects, the Ordinance has the net effect of delaying what could be a non-controversial item. The practical effect on NAIOP is plain; given commercial development tends to follow rooftops, delaying a residential development adversely affects surrounding commercial developers’ ability to secure financing, plan the development, and, of course, also significantly delays City approvals, including permitting. In addition, and even more concerning, the Ordinance gives rights to neighboring properties – of unspecified distance or contiguity – which currently have no rights in the proposed development property. Put another way, the Ordinance has the effect of placing an encumbrance on property which the owner previously held free and clear, and tenders ownership of that encumbrance to neighboring property owners.

At the May 16, 2018 Las Vegas City Council meeting, the Ordinance was heard along with the latest amendment which had been considered at Recommending Committee, but not before the entire Council. There was spirited discussion amongst the Council members, but the public was not allowed to comment on the amendment language or make any record of opposition or support at all. Despite the unanimous Planning Commission recommendation against the Ordinance, and Recommending Committee moving the bill forward without a recommendation (1-1 vote), the Ordinance passed City Council 5-2, with Mayor Goodman and Councilwoman Fiore the lone Nay votes. This should cause alarm for a number of reasons. First, despite requests from the development community, the Council denied comment on this amended Ordinance. Second, the City held stakeholder meetings which NAIOP requested to attend 3 times (twice on the record at City Planning Commission, and once in writing); the City never responded to any of those requests. Third, it should be noted proponents of this anti-development Ordinance were able to secure 4 votes in addition to its sponsor, Councilman Seroka. As such, we cannot deny arguments in favor of slowing development appear to be gaining at least some traction with elected officials.

A similar anti-development ordinance was passed in Henderson on February 18, 2018. Click here for the article.

Status of Anti-Development Legislation at the State Level
Many of you will recall AB 277, or the “Save Red Rock” bill, from the 2017 Legislative Session. In its original form, the bill would have effectively prohibited development within a 5-mile radius of a national conservation area. This radius included Red Rock and immediately surrounding areas, but also included Summerlin, all of Boulder City, and other areas which are developing or are developed. Assemblyman Steve Yeager was the Primary Sponsor of this bill, and made himself constantly available and open to NAIOP’s ideas and suggestions to make the bill somewhat workable. In the end, Asm. Yeager agreed to amend AB 277, reducing the radius to a half mile, among other technical changes. Notwithstanding, while the amendments made AB 277 more palatable, the sentiment behind the bill – restricting development – was and remains a huge concern for NAIOP because it sets an anti-development precedent. Ultimately, Governor Sandoval vetoed the bill, however, Democrats have vowed to bring the bill back in 2019. More, litigation to halt development in an area near Red Rock remains pending.

Former state Senator, and current Clark County Commission candidate Justin Jones is listed as an Advisor to the Save Red Rock board (http://saveredrock.com/about/#board ) and is currently representing Save Red Rock in the aforementioned litigation. Notably, the language used by Asm. Yeager for AB 277 was originally introduced as SB 159 during the 2013 Legislative Session by then Senator Justin Jones, as Primary Sponsor of the bill. While the original text of the bill was completely amended and replaced with new language which became the bill, the original text can be found here: https://www.leg.state.nv.us/App/NELIS/REL/77th2013/Bill/790/Text. Justin Jones has been the tip of the spear on legislation and litigation seeking to halt development near Red Rock, as well as development in other areas (Jones also testified in 2017 in support of AB 393, a similar bill to AB 277 and focused specifically on Sunrise and Frenchman Mountains).

The bottom line is, with respect to the open-space and golf course ordinances mentioned above, and the Save Red Rock and Sunrise / Frenchman Mountain legislation discussed herein, those opposed to development of specific projects have adopted a strategy to legislate solutions, as opposed to resolving issues before the local governing bodies or the courts. This “sledgehammer” approach has the net effect of “casting a wide net” over all like-kind projects and impeding development as a whole, when a “hook and bobber” will do. Given the declining amount of developable land in southern Nevada, NAIOP and its members must remain active and vigilant to ensure future generations of developers can “fish.” To the extent our voices are not being heard, or worse, are silenced as they were on May 16, we must keep these issues at the front of our minds, to ensure accountability from our elected officials.

Times are changing. As new individuals occupy elected offices and views change, so too do the institutions and policies upon which we’ve relied – sometimes, for many years. NAIOP and its individual members need to remain hyper-vigilant in the coming months as we near General Election, as well as the coming 2019 Legislative Session. The 2019 Legislative Session is shaping up to be very interesting, with the possibility of a democratic super-majority in the Assembly, democratic majority in the Senate, infighting within the GOP caucus, and the Governor’s mansion up-for-grabs. For NAIOP, this means there is plenty to monitor as we approach the 2019 Session and develop our legislative agenda. We must continue to ask tough questions, listen to the answers, and remember the history of legislation which affects NAIOP or your business. By all means, get involved. The Government Affairs Committee has up-to-the-minute information on our activities; please use them as a resource for information. Or, call us (fair warning – Kramer is mean before coffee)! Obviously, we continue to work to adjust the dialogue and curb any anti-development sentiment; we’ve made a tremendous amount of progress but we need your help. Do not hesitate to reach out!

Odds & Ends

Most U.S. gold is mined in Nevada. Bill Foley’s team is called the Vegas Golden Knights, in large part due to the gold mined in Nevada, though none of that gold is mined in Las Vegas. Nevada is called the Silver State because at one time, Nevada led the nation in silver mining. Now, Nevada is second to Alaska in silver mining. The Stanley Cup is made of a Silver and Nickel alloy. We got so close to mining the mother lode and reclaiming our position on top of the hill! So exciting, not just the season which was self-explanatory, but watching Las Vegas experience a season of professional sports for the first time. Truly an amazing experience.

It is June 25 as we write this, and next year’s hockey season starts in 100 days. GKG!

 

Jonathan P. Leleu, Director
Kerrie Kramer, Government Affairs Analyst

Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037