# Petition for Writ of Certiorari — Pappas v. City of Las Vegas Downtown Redevelopment Agency

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 2004
- **Citation:** 541 U.S. 912

## Text

Supreme Court, 1: 3.
FILED

No.03- 02 772 JAN 01 2008
ee ee

IN THE

Supreme Court of the Anited States

CAROL PAPPAS, JOHN H. PAPPAS, JR., and
HARRY J. PAPPAS,
Petitioners,
We

CITY OF LAS VEGAS DOWNTOWN REDEVELOPMENT
AGENCY, FREMONT STREET EXPERIENCE LIMITED
LIABILITY COMPANY, and FREMONT STREET
EXPERIENCE PARKING CORPORATION,

Respondents.

On Petition for Writ of Certiorari
to the Supreme Court of Nevada

PETITION FOR WRIT OF CERTIORARI

BARRY LEVENSTAM

Counsel of Record
JEREMY M. TAYLOR
JOHN W. JOYCE
MELINDA E.A. CUPPS
JENNER & BLOCK LLP
One IBM Plaza
Chicago, IL 60611
(312) 222-9350

Counsel for Petitioners
| SR REO ARE A ERD SRT NRG LTT SENSE tT ETI LOO LILES TREES TE
WILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D. ©. 20001

QUESTIONS PRESENTED.

1. Whether the Supreme Court of Nevada's reading of
Berman v. Parker, 348 U.S. 26 (1954), and Hawaii Housing
Authority v. Midkiff, 467 U.S. 29 (1984), violates the fundamen-
tal constitutional right of private property ownership by
permitting local governmental agencies acting in the name of
"economic redevelopment" to take property that is neither
blighted nor surrounded by blight and give it to other private
parties who supposedly can use that property more profitably
on the theory that enhanced private profitability indirectly will
benefit the public.

2. Whether the conflict among state courts interpreting
Berman and Midkiff in addressing the extent to which local
governmental agencies can take property from one private
owner and give that property to another private owner in the
name of "economic redevelopment" demonstrates the need to
revisit and clarify the holdings of those decisions.

3. Whether, if the Nevada Supreme Court's reading of
Berman and Midkiff is accurate, this Court must now revitalize
the "public use" limitation placed on the power of eminent
domain by the Fifth and Fourteenth Amendments in li ght ofthis
Court's more recent decision in Dolan v. City of Tigard, 512
U.S. 374 (1994), and in light of recent abuses of that power in
the name of "economic redevelopment."

**

TABLE OF CONTENTS

Page
QUESTIONS PRESENTED ...........0..00eeeeeee.
TABLE OF CONTENTS ......... 000. 00eceeceueeees ii
TABLE OF AUTHORITIES ..............0.e0e eee. iv
OPINIONS BELOW ............0..ceeceeceeeceees 2
cep iedleuecsvesssucksncces 2
CONSTITUTIONAL PROVISIONS INVOLVED ....... 2
STATEMENT OF THECASE ............ 00-00 eee. 3
REASONS FOR GRANTING THIS PETITION ....... 12

I. This Court Should Issue The Writ Of Certiorari
Because The Nevada Supreme Court's Reading of
Berman v. Parker and Hawaii Housing Authority v.
Midkiff Violates The Public Use Protection Of The
Fifth And Fourteenth Amendments .............. 14

II. This Court Should Issue The Writ Of Certiorari To
Resolve The Conflict Among The State Courts
Engendered By Berman v. Parker And Hawaii
Housing Authority v. Midkiff .......... 000.0000 16

III. This Court Should Issue The Writ of Certiorari
To Reconsider Berman v. Parker And Hawaii
Housing Authority v. Midkiff \n Light Of Dolan v.
City of Tigard, To Resurrect The "Public Use"
Protection Of The Fifth And Fourteenth
Amendments, And Thereby To Restore The
Fundamental Constitutional Right To Own
rr ee re 19

Bee Teer ee err re errr C ees yrs 28

Appendix A: Opinien of Supreme Court of Nevada,
September 8, 2003

Appendix B: Opinion of Clark County District Court,
July 3, 1996

iV

TABLE OF AUTHORITIES
Page
CASES
Adarant Contractors, Inc. v. Pena, 515 U.S. 200 (1995)... 25
Berman v. Parker, 348 U.S. 26 (1954) .....--++++: passim
Chicago, Burlington & Quincy R.R. Co. v. City of

Chicago, 166 U.S. 226 (1897) «1... + esse eee e eee 22
Church of the Lukumi Babalu Aye, Inc., v. City of

Hialeah, 508 U.S. 520 (1993)... 2... ee eee eres 25
Citizens’ Savings & Loan Ass'n v. Topeka, 87 US.

(20 Wall) 655 (1874) .....--- seer eee: 21,22,26,27,28
City of Center Line v. Chmelko, 416 N.W.2d 401 (Mich.

Ch Rep AMD) cis eee ree 18,19
City of Cincinnati v. Vester, 281 U.S. 439 (1930) ....... 22
City of Las Vegas Downtown Redevelopment Agency v.

Eighth Judicial Dist. Court, 5 P.3d 1059 (Nev.

fo WAT eas 9
City of Monterey v. Del Monte Dunes at Monterey,

Ltd., 526 U.S. 687 (1999) .....-- ee eee cece eeee: 28
Davis v. Passman, 442 U.S. 228 (1979)... -- eee rere 27
Dolan v. City of Tigard, 512 U.S. 374 (1994) oni nas nassim
Gibbons v. Ogden, 22 U.S. (9 Wheat.) ft). Sere 24
Hawaii Housing Authority v. Midkiff, 467 U.S. 29

i.) ERT ee ee a, passim
Kaiser Aetna v. United States, 444 U.S. 164

tip) eT ea 28

Lynch v. Household Fin. Corp., 405 U.S. 538 (1972) . 25,26
Mayor v. Thomas, 645 So. 2d 940 (Miss. 1994) .....--- 18

Vv

TABLE OF AUTHORITIES -— continued

Page

Old Dominion Land Co. v. United States, 269 U.S. 55

ee kh bse ods 048 6 KOE EER BESTE E SS 22
Schneider v. District of Columbia, 117 F. Supp. 705

| Ree ren ri err re ee 15
Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735

ee ae eens tah bG aa eke eee es 17
Southwestern Illinois Development Authority v.

National City Environmental, L.L.C.,

pf) oe BE) Re. | nr 17,18,24
United States v. Playboy Entertainment Group, Inc.,

ED a ko we dw pea e ns eed eee EY 25
United States ex rel. Tennessee Valley Authority v.

FE Wi SSO CIINO) oo ova wcuvesvcanes 22,23
CONSTITUTIONAL PROVISIONS
NE, PPP eer ere re Teer TT eT ee res 24
8 Pere eer ee ee eee eee Te passim
ee 8S eee rere ere rrr passim
STATUTES
EE i ity di ata we LAY kee aes 2

Nevada Community Redevelopment Law,
PU, GOON, DOME. ZIP. SOC ZIG OOD 6 cece sc ceesesesens 8

eg, 5 er ere are ae 9

vi

TABLE OF AUTHORITIES - continued

Page
PUBLICATIONS
| Records of the Federal Convention of | 787 534 (Max
Farrand ed., rev. ed. 1966) .......- ee eee reer 20

Arthur Lee, An Appeal to the Justice and Interests of
the People of Great Britain, in the Present Dispute
with America 14 (4th ed. 1775) .. 0... e+e eee ees 20

Dana Berliner, Public Power, Private Gain: A
Five-Year, State-By-State Report Examining
the Abuse of Eminent Domain 130-31 ‘ho. ) 13

Donald J. Kochan, “Public Use" and the Independent
Judiciary: Condemnation in an Interest Group
Perspective, 3 Tex. Rev. L. & Pol. 49 (1998) .... 23,24

Edward S. Corwin, The "Higher Law" Background of
American Constitutional Law, 42 Harv. L. Rev. 365

4) ie eee ee aed 20
Friedrich A. Hayek, The Road To Serfdom, 103-04
1, Seeereeere TOee rr eee, 29

James W. Ely, Jr., The Guardian Of Every Other
Right: A Constitutional History of Property
Rights (Kermit L. Hall ed., 2d ed. 1998) .. 19,20,21,23

John Adams, A Defence of the American Constitutions
of Government of the United States of America
(1787-88), reprinted in Democracy, Liberty, and
Property 126 (Francis W. Coker ed. 1942) ...... 20-21

John Bartlett, Familiar Quotations 336 (Justin Kaplan
ed., 16th ed. 1992) ..... 2. cece cess cnerecccees 20

Vil

TABLE OF AUTHORITIES -— continued

Page

Karl Marx & Friedrich Engels, The Communist

Manifesto (1848), reprinted in 50 Great Books

of the Western World 425 (Robert Maynard

oe re rere 28-29
Mississippi Churning, Editorial, Wall St. J., Jan. 4,

ci Ff | > Seeeeeeerreerre Perr reer rere re 12
Richard A. Epstein, Zakings: Private Property and the

Power of Eminent Domain (1985) .......... 19-20,23

Thomas W. Merrill, The Economics of Public Use,
Ta Commer 4... Rev. G4 CE9GG) nn ce ccc ccvecresnens 23

In The
Supreme Court of the United States

No. 03-

CAROL PAPPAS, JOHN H. PApPAS, JR., and
HARRY J. PAPPAS,

Petitioners,

CITY OF LAS VEGAS DOWNTOWN REDEVELOPMENT
AGENCY, FREMONT STREET EXPERIENCE LIMITED
LIABILITY COMPANY, and FREMONT STREET

EXPERIENCE PARKING CORPORATION, _

Respondents.

ON PETITION For WRIT OF CERTIORARI
To THE SUPREME Court OF NEVADA

PETITION FOR WRIT OF CERTIORARI

Petitioners Carol Pappas, John H. Pappas, Jr, and
Harry J. Pappas (collectively "the Pappas Family")
respectfully petition this Honorable Court for a writ of

2

certiorari to review the judgment of the Supreme Court of
Nevada.

OPINIONS BELOW

The majority and two dissenting opinions of the
Supreme Court of Nevada are reported at 76 P.3d 2, 17, and
18, respectively, and are reproduced in Appendix A. Pet.
App. la, 30a, and 33a, respectively. The decision and order
of the District Court of Clark County is reproduced in
Appendix B. /d. at 42a.

JURISDICTION

The opinion and judgment of the Supreme Court of
Nevada were filed on September 8, 2003. The jurisdiction of
this Court is grounded on 28 U.S.C. 1257(a). Within 90
days of September 3, 2003, Petitioners requested and
received an extension of time until January 6, 2004 in which
to file this Petition. This Petition is filed on January 6, 2004.

CONSTITUTIONAL PROVISIONS iNVOLVED
U.S. Const. amend. V:

No person shall . . . be deprived of life, liberty, or
property, without due process of law; nor shall private
property be taken for public use, without just
compensation.

U.S. Const. amend. XIV:

No state shall make or enforce any law which shall
abridge the privileges or immunities of citizens of the
United States; nor shall any state deprive any person of
life, liberty, or property, without due process of law; nor
deny to any person within its jurisdiction the equal
protection of the laws.

3

STATEMENT OF THE CASE
The Parties and the Project

Petitioner Carol Pappas and her late husband John
immigrated to this country from Greece; their adult sons,
John Jr. and Harry, are also petitioners in this action. In the
1940s, the Pappas Family purchased two parcels of land
totaling 7,000 square feet on the comer of Las Vegas
Boulevard and Carson Street in Las Vegas, Nevada. The
Pappas Family owned this property from the 1940s until
possession of it was taken from them by respondent City of
Las Vegas Downtown Redevelopment Agency ("Agency"),
which promptly gave possession to respondent Fremont
Street Experience Limited Liability Company ("LLC"), a
cartel of casino owners, and its subsidiary, respondent
Fremont Street Experience Parking Corporation (together,
"Fremont Street respondents"). The Pappas Family had
developed the subject property into a retail center, and leased
space to small retail businesses. The small businessmen and
women who were their tenants were also defendants below
but none were able to continue the litigation to this point.
Pet. App. 44a.

In November 1985, the Las Vegas City Council adopted
a resolution for the establishment of a redevelopment agency
and thus created the respondent Agency. The Agency
consists of the City Council and City Manager of Las Vegas.
Id. at 47a. Two weeks later, the Agency conducted a survey
of blocks in the downtown area targeted for "redevelopment"
to determine the overall conditions of the target area. The
survey, which was submitted to the trial court, reflected no
findings of blight on any of the surveyed blocks. Indeed the
target area included the downtown casinos. The block on

4

which the Pappas property was located was not even
surveyed. Despite the fact that the survey reflected no blight
anywhere in the surveyed area, the Agency moved forward
towards adopting a redevelopment plan. /d. In the sole
public hearing on this redevelopment plan, held in February
of 1986, city leader after city leader told a packed hall of
citizens that the city would not use eminent domain to
effectuate the plan. These comments are set forth in the trial
court's opinion. /d. at 49a-54a. In March 1986, the City
Council adopted its Redevelopment Plan. /d. at 54a.

For seven years, this Plan had no .impact on the Pappas
Family or its property. In September 1993, however, a cartel
of casinos formed respondent LLC to transform a portion of
Fremont Street into a gambling mall. Respondent LLC then
formed respondent Fremont Street Experience Parking
Corporation as a wholly owned subsidiary. Thereafter, the
Fremont Street respondents entered into a Development
Agreement with the Agency pursuant to which they would
construct a parking garage with retail space on a city block
bordered by Las Vegas Boulevard, Fremont Street, Carson
Street, and Fourth Street, which the Agency agreed to acquire
through eminent domain. /d. at 55a-56a. That block was
occupied completely by unblighted retail and commercial
properties, including the Pappas Family property. Across one
street were certain casinos; across the other streets were
businesses like banks and a savings and loan. /d. at 31a, 47a,
79a-80a.

The Development Agreement spelled out the purposes
for the project and the taking that made it possible: "to
enhance employment opportunities, keep companies from
leaving the downtown area, attract new businesses to the

5

downtown area, and provide inducement to [LLC] member
and non-member hotels and other businesses in the
downtown area thereby benefitting the public and community
at large." (Appellants' App. in Nev. Sup. Ct. at 1290-91.)
Despite the fact that the Agency and the Nevada Supreme
Court would later rely on the supposed elimination of
"blight" to justify this taking under Berman v. Parker, 348
U.S. 26 (1954), this Development Agreement, like the survey
used to justify it, makes no reference to blight. (/d.) There
was no blight on or near the Pappases' property. Pet. App.
31a, 47a, 79a-80a..

Pursuant to this Development Agreement, the Agency
agreed to pay $6.4 million to acquire the properties upon
which the parking garage was to be constructed but the LLC
was to pay any costs in excess of that sum. In addition, the
Fremont Street respondents obtained a right to veto the sum
that would be paid as just compensation for the property if
that sum exceeded 10% of the "appraised value" as prepared
by the Agency. After the taking, the Fremont Street
respondents would then build and operate the parking lot and
accompanying retail space and keep the revenues generated
by those operations. Jd. at 55a.

Nevada law requires that current landowners be invited
to participate in the development of a project involving their
properties. The Agency sent Carol Pappas a letter notifying
her of its intent to develop a parking garage with retail space
on the property and inviting her to submit an alternative
proposal. Pappas timely responded by letter telling the
Agency that she had no desire to sell the property and that
she proposed in the alternative to participate in the

6

development of the parking lot by entering into a long-term
> ground lease with the city.’ /d. at 56a.

There is no evidence that the Agency ever responded to
this letter or considered this alternative proposal. Instead,
some months later, in August 1993, the Agency offered to
acquire her property for the Agency's assessed value,
$340,000, adjusted downward to cover any environmental
cleanup that might be necessary. Pappas refused to sell. /d.
at 57a-58a.

The Trial Court Proceedings

On November 19, 1993, the Agency filed a complaint in
eminent domain and a motion for order permitting immediate
occupancy pending entry of judgment against the Pappas
Family. Summons was served on Carol Pappas on
December 8, 1993, making the answer due on January 8,
1994. Id. at 58a-59a.

Notice for the hearing on the Agency's motion for
immediate occupancy, however, was unclear. Furthermore,
the Agency's motion stated that access was necessary to
conduct environmental tests. The Pappas Family permitted
the Agency to come on the property on December 14, 1993 to
conduct the tests. Pappas thus believed that this obviated the
need for the motion. In fact, though its motion did not say
so, the Agency wanted full possession of the property

1/ Because the Pappas Family was and remains willing to participate as a
lessor of her property in the proposed parking lot, this case did not become
moot when the city entered the land, tore down the buildings, and constructed
the parking garage and retail space.

7

immediately for demolition, not just access for environmental
testing. /d. at 60a.

The Agency appeared in court on the day following the
testing, December 15, and proceeded without the Pappas
Family present. The Agency represented that the Pappas
Family did not oppose the motion for immediate occupancy
despite knowing that the Pappas Family objected to the
eminent domain proceedings and did not wish to relinquish
possession of their property. The Agency also failed to
inform the court that it had conducted the environmental
testing identified in the motion on the previous day. Jd. at
60a.

Unbeknownst to the absent Pappas Family, the trial court
judge who presided over the hearing’ for immediate
occupancy was an investor in one of the casinos that was a
member of respondent LLC. He granted the motion, and
then denied the Pappas Family's motion to reconsider. The
Pappas Family then obtained new counsel, who moved
successfully to have the initial trial court judge recuse
himself. /d. at 60a-61a.

As the new trial court judge stated in ruling upon the
Pappas Family's motion to dismiss: "What the Pappas Family
had owned for nearly fifty years was stripped from them in
less than 50 seconds in a summary proceeding on December
15, 1993 at which they were not even present." /d. at 60a.

The Pappas Family filed a motion to dismiss the
condemnation suit, asserting that the taking violated the
United States Constitution as well as the Nevada Constitution

pee eee essence aston
ae

8

and the Nevada Revised Statutes.2 At the request of the
Pappas Family, the trial court required the Agency to produce
the full administrative record and transformed the motion
into one for summary judgment. /d. at 61a, 86a.

The Trial Court's Ruling

In its July 3, 1996 opinion, the trial court phrased the
question before it as follows: "The underlying question in
this Motion to Dismiss is whether this taking is for a public
use." /d. at 77a. The court answered the question "no,"
ruling that the taking suffered a series of constitutional and
statutory shortcomings. First, the court concluded that the
1986 Redevelopment Plan, under which the Pappas Family
property was taken, failed to define the redevelopment area
with sufficient specificity and, in particular, included within
the redevelopment area substantial areas of property >
including some of the casinos themselves as well as the
Pappas Family property » for which there was no evidence of
blight. Indeed, as the trial court held, the survey upon which
the Agency based the 1986 Redevelopment Plan showed no
blight anywhere in the affected area. /d. at 79a-86a. Thus,
the court held that the designation of the redevelopment area
was "arbitrary and capricious." Jd. at 86a.

Next, the trial court held that the notice provided to the
Pappas Family failed to inform them of their right to
chailenge the conclusion that their property was blighted. /d.
at 86a-87a. The court also concluded that the Agency failed
to amend the 1986 Plan to include the 1993 Fremont Street

os

2/ The Agency based the Fremont Street Experience project, and the
condemnation of the Pappas Family's property, on the Nevada Community
Redevelopment Law, Nev. Rev. Stat. ("NRS") 279.382-279.685. Pet. App.
56a, 62a-63a.

9

Experience project. Had the Agency amended the Plan, as
required, it would have had to issue additional notice and
hold new public hearings. /d. at 87a-9 1a.

Additionally, the trial court held that the Agency also
failed to comply with the requirement in NRS 279.424(2)
that the Agency show it was unable to obtain the Pappas
property by any other means. In this regard, the court noted
that respondent LLC (which consisted of ten casinos worth
billions of dollars) never even attempted to negotiate a
market sale with the Pappas Family. The court held: "The
takings clauses of the United States and Nevada
Constitutions do not envision the Government as the transfer
agent between two private landowners." Pet. App. at 93a.
For all of these reasons, the trial court concluded that the
taking was unconstitutional.’

The Nevada Supreme Court's Ruling

The Nevada Supreme Court summarily rejected a series
of procedural arguments and addressed the ruling concerning
the unconstitutionality of the taking on the merits. The Court
first analyzed the issue of "public use." /d. at Ila-12a.
Relying heavily on Hawaii Housing Authority v. Midkiff, 467
U.S. 29 (1984), the Court stated that "so long as a

3/ After the trial court granted this motion to dismiss, related proceedings
were assigned to another judge. Citing the appearance of impropriety, that
judge recused himself because he had received campaign contributions from
casinos that stood to benefit from a taking of the Pappases' property. City
of Las Vegas Downtown Redevelopment Agency v. Eighth Judicial Dist.
Court, 5 P.3d 1059, 1060 (Nev. 2000). A "chain reaction of subsequent
recusals" followed because so many judges had accepted similar campaign
contributions from those casinos. /d. Eventually the Nevada Supreme Court
issued a writ of mandamus requiring a judge who had recused himself to
retain the case despite those contributions. /d. at 1063.

10

redevelopment plan, or 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." Pet. App. at 12a-17a.
Ignoring the specific findings of the trial court concerning the
absence of blight, the Court held: "Although the [Fremont
Street project] benefits the casino consortium that was
willing to finance the project, its focus is to provide a safe,
clean, and friendly environment for visitors and businesses in
general and an anchor for revitalization of the entire
downtown area. This constitutes a public purpose under the
United States and Nevada Constitutions." /d. at 19a.

The Court then turned to the related issue of blight. /d.
at 19a-24a. Here again, the Court glossed over the trial
court's specific findings concerning the absence of blight in
1986, when the Agency adopted the Plan, not only on the
block that was condemned, but in the entire downtown area
surveyed. Rather, the Court stated: "The record reflects no
basis for any conclusion that economic, social or physical
blight was eradicated between the date the Plan was adopted
in 1988 and the date the Fremont Street Experience project
was approved in 1993."* /d. at 24a. In fact, nothing in the
record suggests that the Agency made specific findings of
blight at the time it approved the Fremont Street Experience
project in 1993.

If anything, the public record establishes the contrary to
be true. At a City Council meeting at the end of December

4/ The City Council adopted the Plan cn March S, 1986, notin 1988, as the
Court stated. Hence seven years (not five) had passed between the adoption
of the Plan with the attendant public hearings and notice, and the taking of
the Pappas Family's property.

11

1989, right in the middle of this seven year gap, Steve Wynn,
the owner of one of the respondent LLC casinos, testified at
length before the Agency, opposing a different condemnation
plan, and forcefully disputing the notion that downtown Las
Vegas was blighted: "We're talking about a hard core reality
down here about business. 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."
(Gaughn Dep. Ex. B, Dec. 20, 1989 Agency Meeting Tr. at
26.) Another LLC casino owner who was present at that
meeting, Jack Gaughn, later testified in a deposition in this
case that he had agreed with Mr. Wynn that downtown Las
Vegas was not blighted. (Gaughn Dep. at 45-47.)

Ultimately, the Nevada Supreme Court relied upon
Berman vy. Parker, 348 U.S. 26 (1954), to resolve the
problem of the missing blight:

Although the area in Berman involved slums and an
urban renewal statute, rather than a community
redevelopment statute, its rationale still applies. The
specific building at issue in Berman was not itself
blighted. The building was to be taken from a private
owner and managed by a private agency. The Court
concluded, however, that redevelopment encompasses an
entire area, not just individually blighted sections. . . .
Consistent with Berman, the fact that the Pappases'
property itself was not blighted does not prohibit its
taking through eminent domain proceedings.

Id. at 22a-23a.

Two justices dissented. /d. at 30a-4la. Justice Leavitt
noted the absence of blight:

————:

12

The Pappases' property was not a slum. The City's
survey gave no indication that the property was blighted
in any way. There certainly were no conditions injurious
to the public health, safety, morals and welfare. The
property was adjacent to a savings and loan building and
across the street from a bank.

Id. at 31a. Because "there was no evidence of blight in or
around the Pappases' property; . . . the goal of eliminating
blight, which in some cases may be a legitimate public use, is
not applicable in this case." /d. at 32a.

Justice Maupin also dissented. Because the project
"effected a material change to or deviation from the
governing redevelopment plan," he concluded "that the
Agency improperly failed to seek formal amendment of the
Plan before taking properties as eminent domain." /d. at 34a.
Further, the Pappas Family "should still have been able to
lodge objections in the context of a formal plan amendment
concerning the Fremont Street Experience project on the
grounds that takings pursuant to the amendment would not
serve to alleviate blight in the neighborhood," in other words,
"were inconsistent with the goals of the original Plan, or were
not effected for public use." /d. at 38a.

REASONS FOR GRANTING THE PETITION

This taking follows a pattern becoming an epidemic in
this country that represents the very worst in abuses of the
eminent domain power. See, e.g., Mississippi Churning,
Editorial, Wall St. J., Jan. 4, 2002, at Al2. In the name of
"economic redevelopment," the local city council strips
citizens and small businesses of valuable non-blighted
properties that they have worked hard to purchase and
maintain, on blocks never even surveyed for blight, in

13

neighborhoods not suffering blight, and then gives those
properties to wealthy, politically-connected private
businesses to tear down for parking lots or other private uses
that will enhance their private profits. Here, those businesses
» a cartel of casinos and purveyors of adult entertainment >
selected the property and financed the project. And the trial
court judge who stripped the Pappas Family of their property
in an ex parte hearing was an investor in one of those
casinos.”

Yet the Supreme Court of Nevada held that Berman v.
Parker, 348 U.S. 26 (1954), and Hawaii Housing Authority
v. Midkiff, 467 U.S. 229 (1984), required it to turn a blind eye
to this blatant violation of the Pappas Family's fundamental
federal constitutional right to own private property. Because
"tourism and visitor volume continued to decline in
downtown Las Vegas," Pet. App. 24a >» in other words,
because casinos with political clout were not making as much
money as they wanted to make » the Supreme Court of
Nevada believed that it had to permit the city council to take
private properties from their rightful and responsible owners
and give those properties to covetous neighbors. But neither
Berman nor Midkiff permit, much less require, courts to stand
silent when local units of government act to redistribute
private property that is neither blighted nor essential to
remedying adjacent blight.

If "blight" now encompasses a downturn in tourism as
well as uninhabitable slums, and if the presence of blight

5/ The Institute for Justice included the taking of the Pappas Family's
property in its report examining the abuse of eminent domain powers. See
Dana Berliner, Public Power, Private Gain: A Five-Year, State-By-State
Report Examining the Abuse of Eminent Domain 130-31 (2003).

14

somewhere in a city makes any property in the city ripe for
"economic redevelopment" condemnation, then local
governments can act as local tyrants, determining who may
own property within their jurisdictions and who may not.
But the Constitution, in particular the Fifth and Fourteenth
Amendments, do not permit this kind of taking. This Court
should issue the writ to turn this rising tide of tyranny by
holding that courts must apply the "public use" limit of the
Fifth and Fourteenth Amendments to bar the taking of private
property that is neither blighted nor essential to remedying
adjacent blight and the giving of that property to different
private owners for the purpose of "economic redevelopment."

I. This Court Should Issue The Writ Of Certiorari
Because The Nevada Supreme Court's Reading of
Berman vy. Parker and Hawaii Housing Authority v.
Midkiff Violates The Public Use Protection Of The
Fifth And Fourteenth Amendments.

In Berman v. Parker, 348 U.S. 26 (1954), this Court
reviewed Congress's legislative response to well-documented
urban decay that left thousands living and dying in slums. In
this case, the Nevada Supreme Court reviewed the Las Vegas
city council's response to concerns that tourism was
decreasing.

In Berman, the taking involved a tract of segregated
Washington, D.C., in which conditions were documented to
be intolerable: almost two-thirds of dwellings were "beyond
repair"; well over half "had outside toilets"; and over 80%

15

"lacked central heating." Jd. at 30.° The department store at
issue in Berman sat in the midst of this squalor. Jd. at 31. In
this case, the taking involved a valuable block of successful,
diverse commercial enterprises across one street from a
casino owned by respondent LLC's members, and across
other streets from banks and a savings and loan, and
surrounded by many other blocks of valuable commercial
properties. Any supposed blight was blocks, perhaps miles,
away » and the properties between were not taken.
Congress's urban renewal efforts at the heart of Berman were
a far cry from the reverse-Robin Hood action of the city
council here. :

Hawaii Housing Authority v. Midkiff; 467 U.S. 229
(1984), arises in a factual context quite distinct from that
presented by this case. Relying on historical precedent from
the Revolutionary War era, Midkiff upheld a statute designed
to break-up a land monopoly system created by the monarchy
that preceded American statehood so that American citizens
could participate in the fundamental right of property
ownership. /d. at 232, 241-42 & nS. This case is exactly the
reverse of Midkiff’ Casino owners already own most of
downtown Las Vegas, yet the Las Vegas city council passed
a law to dispossess small property owners so that these
oligopolistic (indeed, oligarchic) property owners could
increase their property holdings in town.

6/ The district court opinion further reflects that the general death rate was
50% greater in this area than in the entire District of Columbia, with deaths
from tuberculosis and syphilis occurring at an even greater rate in the
afflicted area. Schneider v. District of Columbia, 117 F. Supp. 705, 709

(D.D.C. 1953).

ee ee SL eee es ee,

16

Although Berman and Midkiff call for a "narrow" scope
of judicial review, they do not eliminate judicial review
entirely. Indeed, Midkiff specifically states: "There is, of
course, a role for courts to play in reviewing a legislature's
judgment of what constitutes a public use, even when the
eminent domain power is equated with the police power."
467 U.S. at 240. But the police power does not extend to
taking valuable, non-blighted property that is surrounded by
non-blighted property on the notion that a different owner
could use the property in a different manner that might
indirectly benefit the public by luring more tourists or
employing more people or generating more taxes. This Court
has never upheld such a taking.

The repercussions of reading Berman and Midkiff so
broadly as to require reflexive judicial approval of this kind
of taking cannot be overstated. It is the rare community that
suffers no blight, much less no economic slowdown. But
according to the Supreme Court of Nevada, the mere
presence of either would empower the local city council to
take anyone's property anywhere in town and give it to a
more profitable business or a wealthier individual. This
Court should issue the writ to clarify that the Fifth and
Fourteenth Amendments do not permit such an unbridled
exercise of eminent domain.

II. This Court Should Issue The Writ Of Certiorari To
Resolve The Conflict Among The State Courts
Engendered By Berman vy. Parker And Hawaii
Housing Authority v. Midkiff.

Berman and Midkiff are not always read so broadly.
Courts in other states have disagreed with the overbroad
interpretation of these cases adopted by the Supreme Court of

17

Nevada, and have prohibited very similar "economic
redevelopment" takings after citing Berman and Midkiff.
Furthermore, decisions on both sides of this issue often come
with vigorous dissents. Such conflicts among state courts on
federal issues merit this Court's review. See, e.g., Smiley v.
Citibank (South Dakota), N.A., 517 U.S. 735, 739 (1996)
(noting "two dissents from the opinion of the Supreme Court
of California" and "the opinion of the Supreme Court of New
Jersey creating the conflict that has prompted us to take this
case").

In Southwestern Illinois Development Authority v.
National City Environmental, L.L.C., 768 N.E.2d 1 (Ill.
2002) ("SWIDA"), for example, the Illinois Supreme Court
confronted a fact situation remarkably similar to that
presented in this case. The Illinois General Assembly had
created SWIDA to redevelop an economically depressed two-
county region. /d. at 227-28. The Gateway racetrack > a big
engine of tourist income and therefore a favored business >
coveted property owned by its next door neighbor, NCE > a
recycling plant >» for a parking lot. /d. at 229. Gateway
persuaded SWIDA to exercise its legislatively-bestowed
quick-take power to seize that property and give it to the
racetrack. Jd. SWIDA incanted the mantra of blight and
public safety, as the Agency did here, but there, as here, any
blight was distant from the taking; the taking's real reason
was to improve the tourist attraction's business and thereby
indirectly to enhance economic redevelopment. /d. at 9.
Citing Berman and Midkiff repeatedly, see SWIDA at 7, 8, 9,
the Illinois Supreme Court rejected the rationale accepted by
the Nevada Supreme Court that what is good for the big
businesses in town is indirectly good for everyone else in
town as well, and therefore qualifies as "public use":

a

18

As a result of the acquisition of NCE's property,
Gateway could realize an estimated increase of $13 to
$14 million in projected revenue per year. While we do
not deny that this expansion in revenue could potentially
trickle down and bring corresponding revenue increases
to the region, revenue expansion alone does not justify
an improper and unacceptable expansion of the eminent
domain power of the government. Using the power of
the. government for purely private purposes to allow
Gateway to avoid the open real estate market and expand
its facilities in a more cost-efficient manner, and thus
maximizing corporate profits, is a misuse of the power
entrusted by the public.

Id. at 10-11.’

Similarly, in Mayor v. Thomas, 645 So. 2d 940, 941
(Miss. 1994), the Mississippi Supreme Court rejected a
taking by the City of Vicksburg of property to be given to
Harrah's for a casino as part of an urban renewal plan. Citing
Berman, the City argued that this was a public use because
Harrah's casino would result in "increased employment of the
citizenry, attraction of tourists, upgrading City facilities by
$500,000 received under the contract, over $15 million added
to City tax rolls, and $60,000 for the construction of a park in
the Urban Renewal Area." /d. at 942-43. Nevertheless, the
Mississippi Supreme Court held that because "Harrah's is the
primary beneficiary of the taking," this was not a public use.
Id. at 943; see also City of Center Line v. Chmelko, 416
N.W.2d 401, 403-07 (Mich. Ct. App. 1987) (striking taking
where City claimed that it sought to condemn property "for

7/ The dissenting opinion, however, criticized the majority's reading of
Berman and Midkiff. 768 N.E.2d at 17.

19

commercial purposes in a manner that will improve the
economic viability of the existing commercial district," when -
in fact it intended to convey condemned land to an auto
dealership that wanted to expand its parking space).

This Court should issue the writ to resolve this conflict
among the states and provide guidelines for applying the
"public use" limitation to the "economic redevelopment"
takings.

It. This Court Should Issue The Writ Of Certiorari To
Reconsider Berman v. Parker And Hawaii Housing
Authority v. Midkiff In Light Of Dolan y. City of
Tigard, To Resurrect The "Public Use" Protection Of
The Fifth And Fourteenth Amendments, And
Thereby To Restore The Fundamental Constitutional
Right To Own Property.

If Berman and Midkiff do permit the taking of one
person's property for the sole purpose of giving it to another
who can use it to attract more tourists or employ more people
or pay more taxes, then this Court should issue the writ and
modify or overrule those cases because the Constitution does
not. This is the very antithesis of "public use."

There can be no doubt that property ownership free from
arbitrary interference by the sovereign is among the most
fundamental of our constitutional rights. In the century
leading up to our war for independence from Great Britain
and the adoption of our Constitution, John Locke's view of
government, as having evolved to protect the natural right to
private property ownership, predominated. See, e.g., James
W. Ely, Jr, The Guardian Of Every Other Right: A
Constitutional History of Property Rights 16-17 (Kermit L.
Hall ed., 2d ed. 1998) (hereafter "Ely"); Richard A. Epstein,

Neen CRSTER

20

Takings: Private Property and the Power of Eminent Domain
29 (1985) (hereafter "Epstein"); Edward S. Corwin, The
"Higher Law" Background of American Constitutional Law,
42 Harv. L. Rev. 365, 383-84 (1928). The signal importance
of Britain's efforts to control taxes, trade, and property rights
as a factor leading to the American Revolution is well known
and indisputable. Ely at 26-29. As Arthur Lee of Virginia
wrote, "The right of property is the guardian of every other
right, and to deprive a people of this, is in fact to deprive
them of their liberty." Arthur Lee, An Appeal to the Justice
and Interests of the People of Great Britain, in the Present
Dispute with America 14 (4th ed. 1775).

While rallying his troops before the Battle of Long
Island, George Washington made the same point: "The time
is now near at hand which must probably determine whether
Americans are to be freemen or slaves; whether they are to

have any property they can call their own... ." John -
Bartlett, Familiar Quotations 336 (Justin Kaplan‘ed., 16th
ed. 1992).

Delegates to the Constitutional Convention in
Philadelphia gave voice to the same view. For example,
John Rutledge of South Carolina stated: "Property was
certainly the principal object of Society." 1 Records of the
Federal Convention of 1787 534 (Max Farrand ed., rev. ed.
1966). Founding Father Alexander Hamilton likewise wrote:
"One great objt. of Govt. is personal protection and the
security of Property." /d. at 302.

Similarly, in’ his A Defense of the American
Constitutions (1787), our second President, John Adams,
wrote:

21

The moment the idea is admitted into society, that
property is not as sacred as the laws of God, and that
there is not a force of law and public justice to protect it,
anarchy and tyranny commence. If "Thou shalt not
"covet" and "Thou shall not steal" were not
commandments of Heaven, they must be made
inviolable precepts in every society, before it can be
civilized or made free.

John Adams, A Defence of the Constitutions of Government
of the United States of America (1787-88), reprinted in
Democracy, Liberty, and Property 126 (Francis W. Coker ed.
1942).

The framers of the Constitution sought to protect private
property rights from future sovereigns. James Madison's
Fifth Amendment would limit the new federal government to
taking private property only "for public use" and then only
with "just compensation." U.S. Const. amend. V. But the
framers also were concerned with the conduct of the states
towards private property rights: "To conservatives the
experience of the revolutionary period demonstrated that the
state governments could not be trusted to respect property
rights. A principal objective of the framers was to prevent
the state legislatures from redistributing property." Ely at 44
(emphasis added). State constitutions at the time by and
large having their own public use and just compensation
limitations, id. at 30-31, the framers addressed their concerns
at the time through the Contract Clause. /d. at 44-45.

After the Civil War and the adoption of the Fourteenth
Amendment, however, the Takings Clause became the first
provision of the Bill of Rights to be incorporated through the
Fourteenth Amendment's due process clause and thus

22

applicable to the states. See Chicago, Burlington & Quincy
R.R. Co. v. City of Chicago, 166 U.S. 226 (1897); Dolan v.
City of Tigard, 512 U.S. 374, 383-84 (1994). Significantly,
in so ruling, this Court chose to highlight its earlier
discussion, in Citizens’ Savings & Loan Ass'n v. Topeka, 87
U.S. 655, 663 (1874), of limits on "our governments, state
and national." Specifically, the Court stated: "No court, [Mr.
Justice Miller] said, would hesitate to adjudge void any
statute declaring that 'the homestead now owned by A.
should no longer be his, but should henceforth be the
property of B."" Chicago, Burlington & Quincy R.R. Co., 166
U.S. at 237, quoting Citizens' Savings & Loan Ass'n, 87 U.S.
(20 Wall.) at 663.

Well into the Twentieth Century, this Court considered
"public use" to be an issue for the courts: "It is well-
established that, in considering the application of the
Fourteenth Amendment to cases of expropriation of private

property, the question what is a public use is a judicial one."
City of Cincinnati v. Vester, 281 U.S. 439, 446 (1930).

But little more than 20 years later, Berman sharply
curtailed the scope of judicial review to "an extremely
narrow one." 348 U.S. at 32. The cases Berman cites in
support of this proposition are wholly distinguishable. Old
Dominion Land Co. v. United States, 269 U.S. 55 (1925),
involved the taking of land on which the Government had
constructed a costly military installation after the owner had
refused to renew the Government's lease for the property it
had improved. United States ex rel. Tennessee Valley
Authority v. Welch, 327 U.S. 546 (1946), involved the taking
of property incident to a TVA dam project. Neither case
involved a challenge that the taking at issue was "a taking

23

from one businessman for the benefit of another
businessman." 348 U.S. at 33. Even so, Justice Frankfurter
wrote a concurring opinion in Welch noting his
understanding that "the Court again recognizes the doctrine
that whether a taking is for a public purpose is not a question
beyond judicial competence." 327 U.S. at 557-58.

Berman discusses the breadth of the police power at
great length. 348 U.S. at 31-36. Yet it addresses the rights
of property owners in but a single sentence: "The rights of
these property owners are satisfied when they receive that
just compensation which the Fifth Amendment exacts as the
price of the taking." /d. at 36. This summary treatment has
prompted more than one scholar to conclude that Berman and
Midkiff wrote the words "public use" out of the Fifth
Amendment: "The Supreme Court, for all practical purposes,
has eliminated the ‘public use’ requirement as a check on the
power of government to appropriate private property by
means of eminent domain." Ely at 148 (citing Berman);
Epstein at 161 (Berman dealt the public use limitation a
"mortal blow"); Thomas W. Merrill, The Economics of
Public Use, 72 Cornell L. Rev. 61, 61 (1986) ("most
observers today think the public use limitation is a dead
letter"); Donald J. Kochan, "Public Use" and the Independent
Judiciary: Condemnation in an Interest Group Perspective, 3
Tex. Rev. L. & Pol. 49, 74 (1998) (hereafter "Kochan") (the
public use limitation is a "meaningless standard of review").
The Nevada Supreme Court gave Berman and Midkiff just
such an overbroad reading.

But the framers did include a "public use" requirement in
the Fifth Amendment. And this Court should read the
Constitution to give effect to express language of the framers,

24

particularly in the Bill of Rights. "As men whose intentions
require no concealment, generally employ words which most
directly and aptly express the ideas they intend to convey, the
enlightened patriots who framed our constitution, and the
people who adopted it, must be understood to have employed

words in their natural sense, and to have intended what they
said." Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 188 (1824).

Moreover, the framers provided the means _ for
eliminating provisions from the Constitution, i.¢., the
amendment power. U.S. Const. art. V. No amendment has
removed the "public use" limitation from the Fifth
Amendment. This Court should therefore give effect to this
limitation in the context of these: abusive economic
redevelopment takings.

Takings for "economic redevelopment" demonstrate why
the "just compensation" limitation alone offers insufficient
protection for the constitutional right to own _ property.
Economic redevelopment takings often (as here) target
valuable non-blighted property. Indeed, the private
businesses that will get the taken properties often select or
participate in selecting the properties to be taken, and then
fund, either entirely or in part, the taking. (Pet. App. 55a; see
also SWIDA, 768 N.E.2d at 4-5, 10.) These businesses are
more than happy to fund these takings because they get a
better price through the government at a just compensation
hearing than they would in the open market. See Kochan at
53. After all, a jury is setting the price rather than the
property's rightful owner, and the jury is told that the price
will be paid by a unit of local government (most likely one
that the jurors are supporting themselves through their tax
payments)..

25

As the history of our Revolution and of our Constitution
amply establishes, the right to own private property is a
fundamental constitutional right. But Berman and Midkiff
are inconsistent with the treatment this Court affords other
fundamental constitutional rights incorporated through the
Fourteenth Amendment. E£.g., United States v. Playboy
Entertainment Group, Inc., 529 U.S. 803, 813 (2000)
(content-based speech regulations are subject to strict
scrutiny); Church of the Lukumi Babalu Aye, Inc. v. City of
Hialeah, 508 U.S. 520, 546 (1993) (non-general law
burdening religious practice is subject to strict scrutiny).
This Court would not abide a local legislative judgment that
all members of one race or one religion should live together.
E.g., Adarant Contractors, Inc. v. Pena, 515 U.S. 200, 227
(1995) ("all racial classifications . . . must be analyzed...
under strict scrutiny").

Our constitution does not create a set of second-class
rights for property ownership. As this Court said recently in
Dolan, "We see no reason why the Takings Clause of the
Fifth Amendment, as much a part of the Bill of Rights as the
First Amendment or Fourth Amendment, should be relegated
to the status of a poor relation... ." 512 U.S. at 392. Indeed,
there is good reason why property rights are so fundamental:

The right to enjoy property without unlawful
deprivation, no less than the right to speak or the right
to travel, is in truth, a 'personal' right... . In fact, a
fundamental interdependence exists between the
personal right to liberty and the personal right in
property. Neither could have meaning without the other.
That rights in property are basic civil rights has long
been recognized.

26

Lynch v. Household Fin. Corp., 405 U.S. 538, 552 (1972),
citing J. Locke, Of Civil Government 82-85 (1924); J.
Adams, A Defence of the Constitutions of Government of the
United States of America, in F. Coker, Democracy, Liberty,
and Property 121-132 (1942); 1 W._ Blackstone,
Commentaries * 138-140.

Nothing suggests that when determining whether a
"deprivation" of property » as opposed to speech or travel >
is "unlawful," Lynch, 405 U.S. at 552, courts must yield
entirely to the legislatures. Yet the Supreme Court of Nevada
reads Berman to say that the courts must bow to a legislative
judgment that the private property of one citizen may be
taken from her and, in the name of "economic
redevelopment," given to her neighbor because that neighbor
can put it to more profitable use: "the United States Supreme
Court has concluded that when a legislative body decides that
a need for redevelopment serves the public, its decision is
'well-nigh conclusive." Pet. App. 2a., quoting Berman, 348
USS. at 32.

This is not a judicial standard; it is judicial abdication.
Courts are the instrumentalities through which the
government takes property. But courts are sworn to uphold
the Constitution; they cannot be required to carry out
unconstitutional legislation reflexively. "To lay with one
hand the power of the government on the property of the
citizen, and with the other to bestow it upon favored
individuals to aid private enterprises and build up private
fortunes, is none the less a robbery because it is done under

27

the forms of law... ." Citizens’ Savings & Loan Ass'n, 87
U.S. (20 Wall.) at 664 (emphasis added).*

Courts should not be complicit in such robbery » rather
they should be "an impenetrable bulwark against every
assumption of power in the Legislative or Executive; . . . to
resist every encroachment upon rights expressly stipulated
for in the Constitution by the declaration of rights." Davis v.
Passman, 442 U.S. 228, 241-42 (1979), quoting James
Madison, reproduced in 1 Annals of Cong. 439 (1789).

The "rationally related" test that Midkiff takes from
Berman, see 467 U.S. at 241, leaves courts ill-prepared to
serve as that bulwark against local governments
redistributing private property rights in the name of
"economic redevelopment." Indeed, in Dolan this Court
rejected the "reasonable relationship" test for exactions,
"partly because the term ‘reasonable relationship’ seems
confusingly similar to the term 'rational basis’ which
describes the minimal level of scrutiny under the Equal
Protection Clause of the Fourteenth Amendment." 512 U.S.
at 391. If heightened scrutiny is required where a local
authority "would deprive [a landowner] of the right to
exclude others, ‘one of the most essential sticks in the bundle

8/ The Court in Citizens’ Savings & Loan Ass'n addressed a tax, not a taking.
But by its very nature an improper taking is more insidious than an improper
tax. Taxes address classes of people, which by dint of their size have at least
a chance to roll back the offending legislation through exercise of the
franchise. Takings typically address individuals or very small groups who
are far less likely to have electoral strength. Further, new owners of property
typically alter the property promptly upon receiving it (as happened here),
making the undoing of a taking far more difficult. Moreover, taking a
person's property may even drive her out of the electoral district. Therefore,
what Citizens’ Savings & Loan Ass'n said of improper taxes is even more
accurate for improper takings.

28

of rights that are commonly characterized as property," id. at
384, quoting Kaiser Aetna v. United States, 444 U.S. 164,
176 (1979) (emphasis removed), it surely must be required
where the local city counsel grabs the entire bundle, and then
passes it to another private owner.’ This Court should issue
the writ and address how courts should scrutinize takings
under the Fifth Amendment "public use" protection to limit
abusive "economic redevelopment" takings like this one.

CONCLUSION

"A government . . . which held the lives, the liberty, and
the property of its citizens subject at all times to the absolute
disposition and unlimited control of even the most
democratic depository of power, is after all but a despotism.
It is true it is a despotism of the many, of the majority, if you
choose to call it so, but it is none the less a despotism."
Citizens’ Savings & Loan Ass'n, 87 U.S. (20 Wall.) at 662
(emphasis added). Taking property from a private citizen to
promote the economic redevelopment of a community may
sound good, but it is an evil » and all the more insidious
because it seems that so many people will benefit from just
one person's loss. The problem is that not just one person
loses » everyone loses because everyone's ownership rights
are diminished. This concept, in fact, has been tried
elsewhere in the world and has failed abysmally: "the theory
of the Communists may be summed up in the single
sentence: abolition of private property." Karl Marx &
Friedrich Engels, The Communist Manifesto (1848),

9/ Although this Court declined to extend the Dolan test from exactions to
denials of development in City of Monterey v. Del Monte Dunes at Monterey,
Lid., 526 U.S. 687, 702-03 (1999), this 'exaction' of the Pappas Family's
property in foto fits more closely with Dolan than Del Monte Dunes.

29

reprinted in 50 Great Books of the Western World 425
(Robert Maynard Hutchins ed. 1952).

As 1974 Nobel Laureate Friedrich A. Hayek wrote in
The Road To Serfdom 103-04 (1944), "What our generation
has forgotten is that the system of private property is the most
important guaranty of freedom, not only for those who own
property, but scarcely less for those who do not."

Berman and Midkiff do not expressly approve of
"economic redevelopment" takings. But the Supreme Court
of Nevada read those cases as requiring it to defer to the city
council despite the detailed findings of the trial court below
concerning the absence of any blight in the area. Other state
courts have not read Berman and Midkiff so broadly, thus
creating a conflict that this Court should resolve » by
concluding that these cases do not, or may not, permit such
unconstitutional takings to proceed.

Writing in support of the ratification of the Constitution,
James Madison, who authored the Fifth Amendment, states
that "[g]overnment is instituted no less for protection of the
property than of the persons or individuals." The Federalist
No. 54, at 333 (James Madison) (Isaac Kramnick ed., 1987).

30

The Pappas Family respectfully requests this Court to grant
their petition for writ of certiorari and to provide the
"protection of the property," as Madison and the framers

intended.

January 6, 2004

Barry Levenstam
Counsel of Record

Jeremy M. Taylor

John W. Joyce

Melinda E.A. Cupps

JENNER & BLOCK LLP

One IBM Plaza

Chicago, IL 60611

(312) 222-9350

APPENDICES

la

Appendix A
Supreme Court of Nevada.

CITY OF LAS VEGAS DOWNTOWN
REDEVELOPMENT AGENCY; Fremont Street
Experience Limited Liability Company, and Fremont Street
Experience Parking Corp., Appellants/Cross-Respondents,
v.

Carol PAPPAS; John H. Pappas, Jr.; and Harry J. Pappas,
Respondents/Cross-Appellants.

No. 39255.

Sept. 8, 2003.
Before the Court En Banc.

OPINION

By the Court, BECKER, J.:
This is an appeal from a district court order granting
respondents’ motion to dismiss in an eminent domain action
and a cross-appeal from a district court order dismissing
respondents’ counterclaims in the same _ action.”
Appellants/cross-respondents, the City of Las Vegas

Downtown Redevelopment Agency (Agency), Fremont Street
Experience Limited Liability Company, and Fremont Street

'The Honorable Mark Gibbons, Justice, voluntarily recused himself
from participation in the decision of this matter.

"Judge Chairez dismissed the eminent domain action; Judge
Huffaker and Judge Mark Denton dismissed the counterclaims.

2a

Experience Parking Corp. (collectively Fremont Street
Experience), argue the district court erred in entering an order
dismissing the Agency’s eminent domain complaint.
Respondents/cross-appellants Carol Pappas, John H. Pappas,
Jr., and Harry J. Pappas (collectively the Pappases) contend that
the district court erred in entering an order dismissing their
counterclaims. We conclude the district court erred in
dismissing the eminent domain complaint and those portions of
the counterclaims that seek damages for alleged
pre-condemnation interference with the Pappases’ tenants. We
further conclude that the district court did not err in dismissing
the remaining counterclaims.

Both the United States and Nevada Constitutions allow the
taking of private property for public use provided just
compensation is paid to the private property owner.’ The
Nevada Legislature has clearly defined economic
redevelopment as a public purpose.’ And, the United States
Supreme Court has concluded that when a legislative body
decides that a need for redevelopment serves the public, its
decision is “well-nigh conclusive.” There is no exception to
the rule “because the power of eminent domain is involved.”
When substantial evidence supports an agency’s determination
that a specific project furthers economic redevelopment under
NRS Chapter 279, the project is for a public purpose. The sole
remaining issue for a jury to determine is just compensation.
We conclude that in this case, substantial evidence supports the
Agency’s determination that the project in issue facilitates

See U.S. Const. amend. V; Nev. Const. art. 1, § 8, cl. 6.
4NRS 37.010(17).

‘Berman vy. Parker, 348 U.S. 26, 32, 75 S. Ct. 98, 99 L. Ed. 27
(1954).

"Id.

3a

redevelopment. Thus, we conclude that the Agency’s use of
eminent domain was constitutionally permissible and the
district court therefore erred in dismissing the Agency’s
eminent domain complaint.

FACTS

On November 6, 1985, the Las Vegas City Council (Council)
created the Agency to tackle redevelopment issues under NRS
Chapter 279.’ The Agency’s board is comprised solely of
Council members.

NRS Chapter 279 identifies redevelopment to eliminate blight
as a public purpose. The Council identified various sections of
the city, including the area commonly known as downtown Las
Vegas, for the Agency to. evaluate and determine whether
redevelopment was necessary to combat physical, social, or
economic blight. The downtown section identified included
property owned by the Pappases. The Agency directed its staff
and the City’s Planning Commission to evaluate the identified
area and prepare a report on any conditions showing physical,
social, and economic blight in the area. The ensuing report
identified various physical, economic, and social conditions
within the area constituting “blight” within the definition set
forth in NRS 279.388.*° These conditions included increased

’NRS 279.428 states, “An agency shall not transact any business
or exercise any powers under NRS 279.382 to 279.685, inclusive, unless, by
resolution, the legislative body declares that there is need for an agency to
function in the community.”

*NRS 279.388 provides:

“Blighted area” means an area which is characterized by one or
more of the following factors:

4a

crime rates and requests for police assistance, business flight

1. The existence of buildings and structures, used or intended to be
used for residential, commercial, industrial or other purposes, or any
combination thereof, which are unfit or unsafe for those purposes and are
conducive to ill health, transmission of disease, infant mortality, juvenile
delinquency or crime because of one or more of the following factors:

(a) Defective design and character of physical construction.

(b) Faulty arrangement of the interior and spacing of buildings.
(c) Overcrowding.

(d) Inadequate provision for ventilation, light, sanitation, open
spaces and recreational facilities.

(ec) Age, obsolescence, deterioration, dilapidation, mixed character
or shifting of uses.

2. An economic dislocation, deterioration or disuse, resulting from
faulty planning.

3. The subdividing and sale of lots of irregular form and shape and
inadequate size for proper usefulness and development.

4. The laying out of lots in disregard of the contours and other
physical characteristics of the ground and surrounding conditions.

5. The existence of inadequate streets, open spaces and utilities.

6. The existence of lots or other areas which may be submerged.

7. Prevalence of depreciated values, impaired investments and
social and economic maladjustment to such an extent that the capacity to pay
taxes is reduced and tax receipts are inadequate for the cost of public
services rendered.

8. A growing or total lack of proper utilization of some parts of the
area, resulting in a stagnant and unproductive condition of land which is
potentially useful and valuable for contributing to the public health, safety
and welfare.

9. A loss of population and a reduction of proper use of some parts
of the area, resulting in its further deterioration and added costs to the
taxpayer for the creation of new public facilities and services elsewhere.

The Legislature adopted this provision in 1959.
See 1959 Nev. Stat., ch. 418, § 7, at 648-49. It has been
amended only once, in 1985. See 1985 Nev. Stat., ch. 639, § 11, at
2068-69.

Sa

from the downtown area, decline in tourism, lack of parking,
visitor and residents’ perceptions of lack of safety in the area,
and increases in vacant and aging buildings.

Based upon this evidence, the Planning Commission submitted
a redevelopment plan (Plan) to the Agency. The Agency
accepted the proposed Plan, reviewed the information
submitted to the Planning Commission, and decided to consider
adopting the Plan. Pursuant to statute, the Agency then
provided notice of a public hearing to landowners affected by
the proposed Plan. At the hearing, members of the public
acknowledged that significant problems existed in the
downtown area. Some individuals disagreed, however, with
the adoption of a redevelopment plan. Instead, they urged the
Agency to work with individual landowners and businesses,
and to provide money for renovations, promotions, and other
methods for cleaning up and bringing people back to the
downtown area.

After considering the public comments, the Agency approved
the Plan. The Agency determined that blight was causing a
serious physical, social, and economic burden on the City in all
applicable downtown areas. The Agency concluded that
working with individuals on a piecemeal basis would not stem
the decline of the downtown area. The Agency also concluded
that neither the City, nor the private sector, acting alone, had
the resources to accomplish the redevelopment goal. The
Agency found that only the combined redevelopment efforts of
the City and the private sector would improve the area.

The Plan provided a framework for all future redevelopment.
It was intentionally general; it included no specific projects.
The purpose, however, was to eliminate physical, social, and
economic blight and to encourage businesses and individuals

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to return to a safe downtown area with adequate parking and
facilities. The Plan provided business and property owners in
the area an opportunity to propose and participate in projects
that would eliminate physical, social, and economic blight as
well as mechanisms for encouraging investors to develop new
projects in the area. The Agency could also use its power of
eminent domain to acquire private property for projects
designed to eliminate social and economic blight.

Neither the Pappases nor any other person challenged the Plan
within the ninety-day period following its adoption, as required
by statute.” The Plan created a conclusive presumption that the
area encompassing the Pappases’ property was blighted under
the Community Redevelopment Law."°

Several years passed between the adoption of the Plan and the
events that led to the present action. Over that period, the
Agency approved several projects. Some succeeded and some
did not. The downtown area continued to lose ground. Finally,
to accomplish redevelopment and eliminate physical, social,
and economic blight in the core downtown area, the Agency
considered various proposals for an anchor project. The
Agency sought a concept that would be a feature attraction in
downtown Las Vegas. The ideal project would create a safer,
cleaner environment designed to draw visitors and businesses
back to the downtown area. This increase in activity would
then encourage additional businesses to relocate to areas
outside of, but adjacent to the core. As businesses returned,

*NRS 279.609 states in part, “Any action questioning the validity
of ...{[t]he adoption or approval of that plan... may only be brought after
the adoption of the plan .. . or within 90 days after the date of adoption of
the ordinance adopting . . . the plan.”

"See NRS 279.589.

Ta

improvement of residential areas would follow. Thus, in
conjunction with the feature attraction, the City also considered
creating new business or shopping venues in the area.

Eventually, the concept known as the Fremont Street
Experience surfaced as the anchor project to accomplish the
Agency’s redevelopment goals. Several components comprised
the Fremont Street Experience, including a sculpted steel mesh
canopy stretching across Fremont Street from Main to Fourth
Streets. The canopy would allow light and air flow during
daylight hours but would provide shade for tourists. At night,
however, the Fremont Street Experience would present a sound
and light show. In addition, the Fremont Street Experience
would create a pedestrian plaza by closing Fremont Street to
vehicular traffic from Main Street to Las Vegas Boulevard.
Finally, because of a lack of adequate public parking, plans for
the Fremont Street Experience included a five-story public
parking structure with some retail and office space.

Because the Agency lacked the financial resources to construct
the project alone, it entered into an agreement with a
consortium of downtown casinos. The consortium would
finance and cover any operating losses of the feature attraction
as well as the construction of the parking garage. The City
would authorize the creation of the pedestrian mall, and the
Agency would provide funds to acquire the land needed to
construct the garage. In return for the risk taken by the
consortium in absorbing all of the construction costs, start- up
losses, and possible operating losses, the consortium would
control the operation and revenues of the garage as well as the
operation of the feature attraction. The Council approved the
Fremont Street Experience project in Bill No. 93-55.

Under the project’s plans, the parking garage would occupy an

8a

entire city block. The chosen block was composed of
thirty-two individual parcels in multiple ownerships. The
Pappases owned three of these parcels, composing a small
portion of the block. The Agency sent the Pappases an offer to
purchase their property. The Pappases refused but indicated
their willingness to enter into a ground lease with the Agency.
Although the Agency initially indicated its willingness to enter
into a ground lease, it determined that a ground lease was not
feasible, as financing for the garage would not permit such an
arrangement. The Agency therefore rejected this proposal and
adopted a resolution to acquire the Pappases’ land, if necessary,
by eminent domain.

After further negotiations to purchase failed, on November 19,
1993, the Agency filed the eminent domain complaint to
acquire the Pappases’ property. The Agency moved for
immediate occupancy pending entry of judgment. The
Pappases failed to oppose the motion, which the district court
granted. The Agency gained possession of the Pappases’ land
effective January 15, 1994.

The Pappases filed an answer and counterclaim, alleging six
causes of action: (1) the Agency violated the Pappases’
procedural due process rights in its initial motion for
occupancy, (2) the Agency improperly took the Pappases’
property through inverse condemnation by its initial motion for
occupancy, (3) the Agency encouraged the Pappases’ tenants to
vacate and not pay rent because of the impending
condemnation, (4) the Agency engaged in_ intentional
interference with business opportunities, (5) the Agency
\ violated the Pappases’ substantive due process rights by failing
to adequately compensate them for the taking, and (6) the
Agency failed to allow the Pappases to participate in the
redevelopment project as statutorily required.

9a

The Pappases then filed a motion for rehearing regarding the
Agency’s immediate occupancy. The district court denied the
motion. The Agency took possession of the property, began
demolishing the existing building, and commenced
construction of the parking garage.’

Thereafter, the Agency filed a summary judgment motion on all
of the Pappases’ counterclaims. The district court found no
genuine issue of material fact as to the first five counterclaims,
noting that they were subsumed within the original eminent
domain complaint, and the counterclaims for monetary
damages could be pursued as a part of the just compensation in
the eminent domain action. The district court denied the
summary judgment motion regarding the Pappases’ right of
participation in the redevelopment project. The Pappases
appealed the dismissal of their counterclaims, but because the
district court’s decision was not a final judgment resolving all
-of the claims between the parties, this court dismissed the
appeal for lack of jurisdiction.

Over three years after the district court had granted the motion
for occupancy and the garage had been constructed, the
Pappases filed a motion to dismiss the Agency’s eminent
domain complaint.'* The Pappases alleged the following: (1)
the exercise of the power of eminent domain was without legal
justification because the redevelopment plan was fatally

''We note that the appropriate vehicle for challenging an order
granting a motion for immediate occupancy is a petition for writ relief, as an
appeal of this interlocutory order is unavailable under NRAP 3 A(b).

"The motion was also filed shortly before a trial was to begin on
the value of the Pappases’ property. The appraiser for the City valued the
property at approximately $500,000, while the Pappases’ appraiser valued
the property at $1,400,000. The Pappases disagreed with their own
appraiser and believed their property was worth $7,000,000.

Fe ee

10a

deficient, (2) the district court lacked jurisdiction because the
Agency improperly invoked the power of eminent domain, (3)
the Agency negotiated with the Pappases in bad faith, and (4)
the Agency violated the Pappases’ procedural due process
rights by violating the Nevada Rules of Civil Procedure.
Shortly thereafter, Fremont Street Experience moved, and was
granted permission to intervene in the pending litigation.

In their motion to dismiss, the Pappases attached minutes from
the City Council meetings regarding the Fremont Street
Experience, the Fremont Street Experience agreement, and
various other affidavits and records regarding the project. In
addition, the district court ordered the Agency to prepare a
record of the administrative proceedings that led to the eminent
domain complaint. Thus, the motion to dismiss was converted
into one for summary judgment.

After considering the evidence and conducting a hearing, the
district court dismissed the Agency’s complaint. The district
court concluded: (1) the construction of the garage did not
preclude the Pappases from contesting the project’s public
purpose; (2) the ninety-day statute of limitations in NRS
279.609 did not preclude judicial review of the taking; (3) the
Agency lacked authority to condemn the property because it
failed to amend the redevelopment plan, and the district court
lacked jurisdiction to hear the Agency’s eminent domain
complaint; (4) the Agency lacked authority to use eminent
domain because there were other less restrictive means to
obtain the property; (5)the Agency acted in bad faith regarding
Owner participation in the project; (6) despite finding
redevelopment a statutorily valid public use, the Agency’s
taking of the Pappases’ property was not a public use because
of the above statutory violations; and (7) the Agency failed to
act in good faith regarding negotiations for the property. The

lla

district court eventually dismissed the one remaining
counterclaim, finalizing the judgment by resolving all of the
pending claims. This appeal and cross-appeal followed.

DISCUSSION

The district court’s findings in support of dismissing the
eminent domain complaint encompass four primary issues: (1)
whether the Pappases are procedurally barred from challenging
the legality of the eminent domain proceedings based on the
doctrines of estoppel or waiver, (2) whether the taking
constitutes ‘a “public use” under the Nevada and Federal
Constitutions, (3) whether the Project furthers the purpose of
eliminating blight under the community redevelopment
statutes, and (4) whether the taking was necessary to further a
public use.’°

Estoppel/waiver

Appellants contend that the district court erred in permitting the
Pappases to challenge whether the parking structure constituted
a public use and the necessity of the taking three years after the
motion for occupancy was granted. Appellants argue that the
Pappases should have opposed the original motion for
occupancy or asserted such issues in their motion for
reconsideration. Moreover, appellants allege that the Pappases
should have sought an extraordinary writ in this court directing
the district court to vacate its orders granting the motion for

The district court’s remaining findings in support of the dismissal
deal with challenges to the scope of the Plan and the need to amend the Plan
whenever a particular project is undertaken. We recently rejected similar
challenges in Las Vegas Downtown Redevelopment v. Crockett, 117 Nev.
816, 34 P.3d 553 (2001).

a

12a

occupancy and denying the motion for reconsideration. We
agree that issues regarding whether the proposed taking
constitutes a “public use” under the Nevada and Federal
Constitutions and whether the taking is necessary to accomplish
that public purpose are issues to be addressed at the early stages
of an eminent domain proceeding. Such issues need to be
resolved before the existing property is substantially altered.

However, we have never held that a party seeking dismissal of
an eminent domain complaint based on lack of public use or
necessity grounds must raise the issues in opposition to a
motion for occupancy or in a motion to dismiss filed before the
subject property is significantly altered. Nor have we indicated
that the failure to file a petition for extraordinary relief from an
order granting a motion for occupancy or denying a motion to
dismiss implicates the doctrines of waiver or estoppel.
Therefore, we decline to apply these doctrines to the facts of
this case. However, forall eminent domain cases filed after the
date of this opinion, such challenges must be raised prior to
occupancy and material demolition, alteration or construction
on the subject property. Failure to timely assert lack of public
use or necessity will constitute a waiver of these issues.

Public use

The United States Constitution declares that no private property
shall “be taken for public use, without just compensation.”'*
The Constitution of the State of Nevada similarly provides that
“[p]rivate property shall not be taken for public use without just
compensation having been first made.” '°

'4U)_S. Const. amend. V.

"Nev. Const. art. 1, § 8, cl. 6.

13a

As the Illinois Court of Appeals eloquently acknowledged,
“What constitutes a ‘public purpose’ . . . has plagued the
American judiciary ever since it arrogated to itself the
[prerogative] of interpreting constitutions.”'® A narrow
interpretation requires actual use by the public.'’ A broad
interpretation includes any “use [that] concerns the whole
community or promotes the general interest-in its relation to
any legitimate object of government.””"®

When construing the Federal Constitution, the United States
Supreme Court broadly interprets the term “public use” and has
rejected the concept that the Constitution requires actual use of
the condemned property by the public.'’ Historically, this court
has also broadly interpreted “public use” to include public
utility, benefit, and advantage.” In fact, the majority of courts
that have considered this issue, under state constitutions with
language similar to Nevada’s, have adopted broad
interpretations of “public use.””!

"Lake Louise Imp. v. Multimedia Cablevision, 157 Ml. App. 3d
713, 109 Ill. Dec. 914, 510 N.E.2d 982, 984 (1987).

See Thornton Development Authority v. Upah, 640 F. Supp.
1071, 1077 (D. Colo.1986) (actual use like parks or streets).

'SSouthern California Edison Co. v. Rice, 685 F.2d 354, 356 (9th
Cir. 1982) (quoting City of Oakland v. Oakland Raiders, 32 Cal.3d 60, 183
Cal. Rptr. 673, 646 P.2d 835, 841 (1982) (quoting Bauer v. County of
Ventura, 45 Cal. 2d 276, 289 P.2d 1, 6 (1955))).

"Rindge Co. v. Los Angeles, 262 U.S. 700, 707, 43 S. Ct. 689, 67
L. Ed. 1186(1923); Fallbrook Irrigation District v. Bradley, 164 U.S. 112,
159-62, 17S. Ct. 56, 41 L. Ed. 369 (1896).

Dayton Mining Co. v. Seawell, 11 Nev. 394, 408 (1876); see also
Milchem Inc. v. District Court, 84 Nev. 541, 548, 445 P.2d 148, 152 (1968).

712A Julius L. Sackman, Nichols on Eminent Domain §§ 7.01[1],
7.02[3] (rev.3d ed.2003).

14a

Appellants contend that the district court used too narrow an
interpretation in finding that accomplishing redevelopment
through the construction of the parking garage was not a public
use subject to the exercise of eminent domain. The Pappases
claim that the garage is not a proper public use, even under the
broader definition of public use, because the garage will be
owned and operated by a private entity. The Pappases assert
that whenever eminent domain involves the transfer of land
from one private individual to another private individual, such
a transfer is not for a public purpose.

The United States Supreme Court has soundly rejected the
notion that transfer of land ownership from one private
individual to another automatically falls outside the power of
eminent domain. In Hawaii Housing Authority v. Midkiff,’ the
High Court considered this issue in the context of a Hawaii
statute designed to diversify land ownership in Hawaii. The
Hawaii Legislature enacted the Land Reform Act of 1967(Act)
to break up a land oligopoly that had been in existence for
hundreds of years.”* To accomplish this goal, the Act allowed
certain land to be condemned and then transferred from the
landowner to other individuals who had previously leased the
land from the landowner.** Under the Act, taking private
property from the oligopoly of landowners and distributing the
land to existing tenants was deemed to be a public purpose.”

The Midkiff Court held that “deference to the legislature’s
‘public use’ determination is required ‘until it is shown to

2467 U.S. 229, 104 S. Ct. 2321, 81 L. Ed. 2d 186 (1984).
31d. at 232-33, 104 S. Ct. 2321.

"Id. at 233, 104 S. Ct. 2321.

Id. at 233-34, 104 S. Ct. 2321.

15a

involve an impossibility.’’’° Continuing, the Court pointed out
that it would “not substitute its judgment for a legislature’s
judgment as to what constitutes a public use ‘unless the use be
palpably without reasonable foundation.’””’

The Court held that controlling the oligopoly was a reasonable
exercise of Hawaii’s police power.”* Although the Court
recognized that the Act might not correct the problem, it
concluded that “‘the [constitutional requirement] is satisfied if
. the . . . [state] Legislature rationally could have believed
that the [Act] would promote its objective.’””’ In this respect,
the Court observed that the courts are not the place for
“empirical debates over the wisdom of takings.”*° Accordingly,
“if a legislature . . . determines there are substantial reasons for
an exercise of the taking power, courts must defer to its
determination that the taking will serve a public use.’”!

We have also rejected the concept that public ownership of the
condemned property is essential to public use. In Urban
Renewal Agency v. lacometti,”” we indicated that “[p]oscesory
use by the public is not an indispensable prerequisite to the

**Id. at 240, 104 S. Ct. 2321 (quoting Old Dominion Land Co. v.
United States, 269 U.S. 55, 66, 46 S. Ct. 39, 70 L. Ed. 162 (1925)).

“Id. at 241,104 S. Ct. 2321 (quotins United States v. Gettysburg
Electric Ry., 160 U.S. 668, 680, 16 S. Ct. 427 4 Ed. 576 (1896)).

87d. at 242,104 S. Ct. 2321.

"1d. (quoting Western & Southern L.I. Co. v. Bd. of Equalization,
451 U.S. 648, 671-72, 101 S. Ct. 2070, 68 L. Ed. 2d 514 (1981) (alteration
in original)).

71d. at 243,104 S. Ct. 2321.
"1d. at 244, 104 S. Ct. 2321.
279 Nev. 113, 379 P.2d 466 (1963).

l6a

lawful exercise of the power of eminent domain.””’ We further
explained that “[t]he rights of the [property owners] will be
constitutionally satisfied when they receive just compensation
for their properties.”

The Nevada Legislature, by enacting the Community
Redevelopment Law, has declared that physical, social, and
“economic blight constitute ‘‘a serious and growing menace
which is condemned as injurious and inimical to the public
health, safety and welfare of the people.’ Further, the
Legislature has specifically found that blight decreases property
values” and increases crime, which necessarily causes a
disproportionate allocation of public services such as police,
fire and accident protection in blighted areas.*’ The Legislature
has declared that a community can exercise the power of
eminent domain “whenever the redevelopment of blighted
areas cannot be accomplished by private enterprise alone.”*
More importantly, NRS 279.424(3) specifically provides that
“the redevelopment of blighted areas and the provision for
appropriate continuing land use .. . constitute public uses and
purposes .. . and are governmental functions of state concern
in the interests of health, safety and welfare of the people.”

Thus, so long as a redevelopment plan, or any individual
redevelopment project, bears a rational relationship to the
eradication of physical, social or economic blight, it serves a

37d. at 126,379 P.2d at 472-73.
41d. at 127, 379 P.2d at 473.
*NRS 279.418(1).

*°NRS 279.420.

INRS 279.418(3). ~

3NRS 279.424(2).

17a

public purpose within the power of eminent domain. The focus
of the inquiry is whether the plan or project serves the public
purpose, not whether the condemned property is eventually
owned by a public or private entity.

In this case, there is a rational relationship that justifies the
exercise of the power of eminent domain. The determination
that the project would serve a public use is not “‘palpably
without reasonable foundation.”””’ To the contrary, the record
indicates the Agency’s purpose for entering into a
redevelopment agreement with Fremont Street Experience was
to construct a safe entertainment street mall to attract visitors
and businesses back to the downtown area. The garage was
planned to ensure that adequate off-street public parking would
be available for patrons of the downtown businesses. The
entire project was designed to encourage additional
revitalization projects spreading out from the central core of the
downtown area. Thus, the project’s central focus was to
combat economic, social, and physical blight, a public purpose
as defined by the Legislature.

It is this feature that distinguishes the anchor attraction and
garage from cases where courts have dismissed eminent
domain complaints because the taking was not for a public
use.*” In those cases, the courts found that eminent domain

Midkiff, 467 U.S. at 241, 104 S. Ct. 2321 (quoting Gettysburg
Electric Ry., 160 U.S. at 680, 16 S. Ct. 427).

Cf Armendariz v. Penman, 75 F.3d 1311, 1320-21 (9th Cir.
1996); 99 Cents Only Stores v. Lancaster Redevelopment, 237 F. Supp.2d
1123, 1128-31 (C.D. Cal. 2001); Wilmington Pkg. Auth. v. Land
W/Improvements, 521 A.2d 227 (Del. 1986); Southwestern Ill.
Development Auth. v. NCE, 304 Ill. App. 3d 542, 238 Ill. Dec. 99, 710
N.E.2d 896 (1999), aff'd, 199 Ill. 2d 225, 263 Ill. Dec. 241, 768 N.E.2d 1,
cert. denied, 537 U.S. 880, 123 S. Ct. 88, 154 L. Ed. 2d 135 (2002).

18a

proceedings were not instituted to accomplish a public purpose,
such as the elimination of blight. Rather, the courts indicated
that the sole purpose for acquiring the property through
condemnation proceedings was to benefit another private
entity.*' Although, in these cases, the property to be
condemned in each case was located in an area designated for
redevelopment, the individual projects did not further
redevelopment goals. Instead, the projects were simply
expansions of existing business concerns. The businesses
needed more parking or larger retail space and they wanted to
acquire their neighbors’ land to accomplish those purposes.
When the neighbors did not agree, the businesses sought to use
the redevelopment acts and eminent domain to acquire the
property.” The courts found a lack of substantial evidence to
support the government’s assertion that the project expansions
were designed to combat physical, economic or social blight.
There was no evidence that the areas in question suffered from
high crime, unemployment, vacant business or other
components of blight that would be addressed by the proposed
projects.*? In contrast, when a project is intended to attack
blight, such as creating a significant increase in jobs in an area
suffering from high unemployment, even the relocation of one
business through condemnation to make way for a new

"99 Cents Only Stores, 237 F. Supp. 2d at 1129-31 (eminent
domain cannot be used solely to permit expansion of large retail store at
expense of small retail business); Wilmington Parking Auth., 521 A.2d at
234-35 (eminent domain improper where sole purpose was to permit
newspaper to expand physical plant); Southwestern Ill. Development Auth.,
238 Ill. Dec. 99, 710 N.E.2d at 904 (no public purpose found where sole
reason for eminent domain was expansion of raceway parking facilities).

9 .
See cases cited supra note 41.

?See cases cited supra note 41.

19a

business is still considered a public purpose.”

The creation of a public pedestrian mall and entertainment
attraction is not the expansion of a business entity. The record
reflects that the garage was not built to service a single
business, but to address inadequate public parking in the
downtown area and the need for new parking as visitor volume
increased in response to the attraction. Although the attraction
benefits the casino consortium that was willing to finance the
project, its focus is to provide a safe, clean, and friendly
environment for visitors and businesses in general and an
anchor for revitalization of the entire downtown area. This
constitutes a public purpose under the United States and
Nevada Constitutions.

Blight

The district court found that substantial evidence did not
support the Agency’s finding that the area in which the
Pappases’ property was located was blighted; therefore, the
inclusion of this area in the redevelopment plan was improper
and the property was not subject to eminent domain
proceedings. Appellants contend that the district court lacked
authority to consider this issue because all challenges to a
redevelopment plan must be brought within ninety days of the
plan’s adoption.

“Blight” is a term used to describe physical, social or economic

“Poletown Neighborhood Council v. City of Detroit, 410 Mich.
616, 304 N.W.2d 455, 458-59 (1981) (taking of property to facilitate
construction of automobile plant permitted where area suffered from severe
economic conditions and new industrial development was necessary to
combat social and economic blight resulting from high unemployment).

20a

conditions that affect the health, safety or welfare of a
community.*° There is no question that blight takes on many
forms. Physical blight refers to a community’s infrastructure,
such as poorly designed streets, inadequate public facilities,
building code violations, and substandard housing.** Slums are
a common example of physical blight. Social blight
incorporates such aspects as high crime or unemployment
rates.*’ Economic blight involves downward trends in the
business community, relocation of existing business outside of
the community, business failures, and loss of sales or visitor
volumes.”*

For an area to be included in a redevelopment plan, there must
be a finding that the general area suffers from some form of
blight and that redevelopment is necessary to eliminate that
blight.” If an agency’s finding of blight is supported by
substantial evidence, it is not subject to judicial review.”
Substantial evidence is that which a “reasonable mind might
accept as adequate to support a conclusion.””!

Berman, 348 U.S. at 31,75 S. Ct. 98; Sweetwater Valley Civic
Ass'n v. National City, 18 Cal.3d 270, 133 Cal. Rptr. 859, 555 P.2d 1099,
1103 (1976).

*Beach-Courchesne v. City of Diamond Bar, 80 Cal. App.4th 388,
95 Cal. Rptr.2d 265, 270-71 (2000).

"Id. at 271.

"1d.

Sweetwater Valley Civic Ass'n, 133 Cal. Rptr. 859, 555 P.2d at
1103.

In re Bunker Hill Urban Renewal Project 1B, 61 Cal. 2d 21, 37
Cal. Rptr. 74, 389 P.2d 538 (1964).

*'State, Emp. Security v. Hilton Hotels, 102 Nev. 606, 608, 729
P.2d 497, 498 (1986) (internal quotation marks and citation omitted).

2la

In addition, judicial review of a redevelopment plan must be
conducted within the timelines required by statute. NRS
279.609 provides that any challenge to the validity of a
redevelopment plan must be raised within ninety days after the
“adoption of the ordinance adopting . . . the plan.” NRS
279.589(1) reinforces the finality of NRS 279.609, stating,
“The decision of the legislative body concerning a
redevelopment area is final and conclusive, and it is thereafter
conclusively presumed that the redevelopment area is a
blighted area and that all prior proceedings have been properly
and regularly taken.”

This language is taken from similar California redevelopment
statutes, and we may therefore look to California’s
interpretations for guidance.’ The California Supreme Court,
interpreting a statute that provides for a sixty-day period to
- contest a redevelopment plan, has stated that judicial review of
a finding of blight (and therefore public use) must be
commenced within the statutory period.*’ Once the sixty-day
period expires, no new action to challenge the findings may be
filed, and a conclusive presumption of blight applies.”

The Plan in this case was not challenged within the ninety-day
period provided by Nevada statutes; therefore, the district court
erred in considering whether substantial evidence supported the
determination that the downtown area suffered from physical,
social or economic blight. Moreover, even if such a challenge
had been timely made, the record reflects substantial evidence
in support of the Agency’s determination of blight.

Crockett, 117 Nev. at 824, 34 P.3d at 559.

Sweetwater Valley Civic Ass'n, 133 Cal. Rptr. 859, 555 P.2d at
1102-03.

47d. at 1103.

ee

22a

Specifically, evidence was presented to the Agency indicating
that the downtown.area, including the area in the immediate
vicinity of the Pappases’ property, suffered from higher crime
rates than the rest of the City of Las Vegas. Vacant lots, burnt
out buildings, and vacant buildings were present on many of the
downtown blocks. Visitor volume had been consistently
decreasing. Businesses were relocating outside of the
downtown area. Most of the buildings in the area were over
thirty years old and renovations would require substantial
upgrades to comply with existing building codes. While the
surveys and investigation may not have been as intensive as in
some of the reported cases, they certainly provide substantial
evidence of blight. Thus, the district court erred in finding the
area was not blighted.

The Pappases further contend that even if the area in general
can be considered blighted, their particular property was not
blighted; therefore, it could not be subject to eminent domain.
The United States Supreme Court rejected this type of
argument in the seminal case of Berman v. Parker. In
Berman, the High Court stated, “Property may of course be
taken for this redevelopment which, standing by itself, is
innocuous and unoffending.”*° The Court further concluded,
“If owner after owner were permitted to resist these
redevelopment programs on the ground that his particular
property was not [blighted] . . . integrated plans for
redevelopment would suffer greatly.””’

Although the area in Berman involved slums and an urban
renewal statute, rather than a community redevelopment statute,

°348 U.S. 26, 75 S. Ct. 98, 99 L. Ed. 27 (1954).
Id at 35,75 S. Ct. 98.
57

ld.

23a

its rationale still applies. The specific building at issue in
Berman was not itself blighted.** The building was to be taken
from a private owner and managed by a private agency.’ The
Court concluded, however, that redevelopment encompasses an
entire area, not just individually blighted sections.” The Court
observed that the “piecemeal approach, the removal of
individual structures that were offensive, would be only a
palliative.”’' Through redevelopment “it was hoped that the
cycle of decay of the area could be controlled.’*” Consistent
with Berman, the fact that the Pappases’ property itself was not
blighted does not prohibit its taking through eminent domain
proceedings.

We note, however, that while a property owner may not
challenge a redevelopment plan’s finding of blight beyond the
ninety-day statutory deadlines, the issue of blight may still be
raised as it relates to the specific project involved in a
condemnation proceeding. A property owner may raise, as an
affirmative defense to the taking, that blight originally
identified in the plan or project no longer exists® or that the
particular project is the product of fraud or collusion between
the governmental agency and the private entities who will

81d. at 31,75 S. Ct. 98.
1d.
1d. at 34,75 S. Ct. 98.
6lig
7d. at 35,75 S. Ct. 98.

**See 99 Cents Only Stores, 237 F. Supp. 2dat 1130-31; Aposporos
v. Urban Redevelopment Com’n, 259 Conn. 563, 790 A.2d 1167, 1175-77
(2002).

ita a

24a

develop the project™ or the avowed public purpose is merely a
pretext” or used in bad faith.°

The record reflects no basis for any conclusion that economic,
social or physical blight was eradicated between the date the
Plan was adopted in 1988 and the date the Fremont Street
Experience project was approved in 1993. To the contrary,
tourism and visitor volume continued to decline in downtown
Las Vegas during those years. More businesses had left the area
or closed down. Crime rates, particularly drug- and
prostitution-related crimes, continued to be a problem.
Inadequate parking had increased. Thus, the Pappases failed to
establish that downtown Las Vegas no longer suffered from
physical, social, or economic blight at the time of the eminent
domain proceedings.

The same conclusion applies to any allegation of fraud,
collusion, bad faith or pretext. The record contains no evidence
that the Pappases’ property was being acquired for some
purpose other than a public parking facility and community
redevelopment of a blighted downtown area. Because the
record does not support the district court’s finding of bad faith,
we conclude the district court erred in basing its dismissal on
this theory and relying on bad faith or pretext cases.

“See 99 Cents Only Stores, 237 F. Supp. 2d at 1130-31;
Aposporos, 790 A.2d at 1175-77; see also Southwestern Ill. Development
Auth., 238 Ill. Dec. 99, 710 N.E.2d at 896.

Earth Management, Inc. v. Heard County, 248 Ga. 442, 283

S.E.2d 455, 459-61 (1981) (condemnation was pretext to stop construction
of hazardous waste disposal plant); Armendariz, 75 F.3d at 1320-21.

Pheasant Ridge Assoc. v. Burlington Town, 399 Mass. 771, 506
N.E.2d 1152 (1987) (eminent domain proceedings designed to block
construction of low and moderate income housing); Denver West Metro.
Dist. v. Geudner, 786 P.2d 434, 436 (Colo. Ct. App.1989}.

25a

Necessity

In an eminent domain proceeding, necessity is usually raised in
the context of challenging whether a project furthers a public
purpose and therefore constitutes a public use. It involves
whether the property to be taken is necessary to accomplish the
public purpose®’ and it encompasses the selection of the
location of the condemned land.** However, the standard for
challenging a taking for lack of necessity is even greater than
that for challenging its public purpose. Courts may not
question the wisdom of how to accomplish the public purpose
absent a showing of fraud or bad faith.” It is up to the
legislative body (in this case, the Agency) to determine how to
accomplish the public purpose. Thus, the courts may not
substitute their own judgment or dismiss an eminent domain
action simply because the legislative branch has other methods
at its disposal to accomplish the public purpose.”°

The district court found that the Agency acted in bad faith
because it could have entered into long-term ground leases with
all of the owners of property on the block needed to construct
the parking garage rather than acquire the property through
condemnation. However, the record contains no evidence to
support such a finding. The record reflects that the Agency
rejected this approach because it would severely affect the
financing for the garage. There is no evidence to suggest any

°’Denver West Metro. Dist., 786 P.2d at 436.
Thornton Development Authority, 640 F. Supp. at 1076.

Port of Umatilla v. Richmond, 212 Or. 596,321 P.2d 338, 350-51
(1958); Denver West Metro. Dist., 786 P.2d at 436; Thornton Development
Authority, 640 F. Supp. at 1076.

Port of Umatilla, 321 P.2d at 350-51; Denver West Metro. Dist.,
786 P.2d at 436; Thornton Development Authority, 640 F. Supp. at 1076.

26a

other reason for the decision. The Agency’s condemnation
decision does not constitute bad faith, and the district court
erred by substituting its judgment for that of the Agency as to
the appropriate method for acquiring the property.

Pappases’ counterclaims

The Pappases’ counterclaims involved several concepts. They
claimed that the Agency’s inclusion of their property in the
Fremont Street Experience project constituted inverse
condemnation, that the Agency violated their due process rights
during the initial motion for occupancy, and that their property
was taken without just compensation. The record indicates no
basis for these claims, and the district court correctly granted
summary judgment on them. Issues of inverse condemnation
and just compensation were subsumed within the original
condemnation complaint. The Agency correctly followed the
procedures for gaining immediate occupancy, and any alleged
confusion generated by the pleadings was addressed in the
Pappases’ motion for reconsideration. Since they were given
notice and an opportunity to be heard, due process was
satisfied. Thus, the district court did not err in dismissing these
counterclaims.

The Pappases also asserted a counterclaim seeking declaratory
relief or damages for the Agency’s alleged failure to permit
them to participate in the project through a long-term ground |
lease. They base this assertion upon NRS 279.566(1).’!

™NRS 279.566(1) states:

Every redevelopment plan must provide for the
participation and assistance in the redevelopment of
property in the redevelopment area by the owners of all
or part of that property if the owners agree to participate

Es

27a

Pursuant to the statute, the Agency has enacted rules
establishing guidelines for owner participation. The rules
provide that the owners and tenants of real property in the
redevelopment area are eligible to participate in the
redevelopment of property within the area subject to certain
factors, such as changes in zoning or land use regulations, street
realignments, the ability of participants to finance acquisition,
development or rehabilitation of their project, reduction in total
number of individual parcels in the area, and construction of
public facilities.” The rules also provide that the owners have
a reasonable opportunity to retain their properties, acquire
adjacent properties, sell and relocate, rehabilitate or participate
in new development.” The Plan mirrors the rules by indicating
that participation opportunities are necessarily subject to and
limited by the same factors cited in the rules.”

The plain language of the statute, rules and Plan does not give
the Pappases an absolute right to participate in a particular
project. It does permit landowners to propose a development
project involving their property or to combine with other
landowners on a project. It also mandates that such proposals
be evaluated fairly. It does not, however, require the Agency
to approve any proposal. California courts, when interpreting
similar statutes and rules, have come to the same conclusion.
The California Supreme Court has determined that there is no
absolute right of owner participation in the redevelopment of

in conformity with the redevelopment plan adopted by the
legislative body for the area.

"City of Las Vegas Downtown Redevelopment Agency, Rules
Governing Participation § 300.

1d. § 400.

“Redevelopment Plan for the Downtown Las Vegas
Redevelopment Area § 410.2 (Jan. 22, 1986).

28a
5
any individual parcel in a redevelopment area.’” Whether to
allow owner participation in a given project, and under what
circumstances, are matters left to the discretion of the agency. ”°

In this case, from the time their property was included in the
redevelopment area until the approval of the Fremont Street
Experience consistency project, the Pappases did not seek to
participate in any redevelopment project utilizing their
property. Once the property was identified as necessary for the
parking garage, the Pappases did propose a long-term ground
lease as an alternative to acquiring their property. Although
initially inclined to consider this idea, the Agency rejected the
long-term lease proposal when it became apparent that
long-term leases would affect financing of the garage
construction. No evidence was presented in opposition to the
Agency’s motion for summary judgment, indicating that the
Agency’s decision to forgo ground leases for the garage was the
product of fraud or was not supported by substantial evidence.
To the contrary, the only evidence presented on the issue
demonstrated the need to have single ownership of the land to
obtain favorable financing. The district court correctly
concluded that no genuine issue of material fact existed as to
this claim because no evidence was presented to indicate the
Agency acted in bad faith when it rejected the ground-lease
proposal.

Finally, the Pappases asserted causes of action relating to

In Re Bunker Hill, 37 Cal. Rptr. 74, 389 P.2d at 563.

Sanguinetti v. City Council of City of Stockton, 231 Cal. App.2d
813, 42 Cal. Rptr. 268, 275 (1965); see also Fellom v. Redevelopment
Agency, 157 Cal. App.2d 243, 320 P.2d 884, 888-89 (1958) (property
owner has no right to participate where agency condemns property for
redevelopment project).

29a

alleged rent losses incurred by them prior to the condemnation
proceedings. The Pappases claimed that they lost rent from the
time the Agency announced that the Pappases’ property would
be part of the Fremont Street Experience and that City or
Agency employees interfered with the relationship between the
Pappases and their tenants. While much of the evidence
presented by the Pappases in opposition to the Agency’s motion
for summary judgment consisted of inadmissible hearsay (what
tenants allegedly told Carol Pappas), sufficient admissible
evidence was submitted on this claim to raise a genuine issue
regarding material questions of fact to survive a motion for
summary judgment. Thus, we conclude the district court erred
in dismissing these counterclaims.

CONCLUSION

Substantial evidence supports the Agency’s findings that the
construction of the Fremont Street Experience, including the
parking garage, furthers the public purpose of eliminating
blight in downtown Las Vegas. Therefore, the Agency’s use of
eminent domain proceedings to acquire the Pappases’ property
for that purpose does not violate the Nevada or Federal
Constitutions. The district court erred in dismissing the
eminent domain action. With the exception of the claims
involving pre-condemnation interference with tenants or rental
Opportunities, the district court did not err in dismissing the
Pappases’ counterclaims. Accordingly, we reverse the
judgment of the district court dismissing the complaint in
eminent domain and that portion of the district court’s
subsequent order pertaining to the lost rent claims and remand
the matter to the district court for further proceedings in
accordance with this opinion. The remaining portion of the
district court’s order dismissing the counterclaims is affirmed.

30a

We concur: AGOSTI, C.J., and SHEARING and ROSE; JJ.
LEAVITT, J., dissenting:

The Agency’s taking of the Pappases’ property by eminent
domain violates both the United States Constitution and the
Constitution of the State of Nevada.

The United States Constitution states that no private property
shall “be taken for public use, without just compensation.”
The Constitution of the State of Nevada similarly provides that
‘[p]rivate property shall not be taken for public use without just
compensation having been first made.”

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. The government’s
taking of property and giving it to another for a private use is
unconstitutional and void.

The United States Supreme Court, in Berman v. Parker, upheld

_the transfer of property taken by eminent domain from one

private party to another private party; however, the taking in
that case involved a public use.’ The Court permitted the
transfer of privately owned property to other private parties
because the redevelopment area involved slums in Washington,
D.C., and the conditions in the area were injurious to the public
health, safety, morals and welfare.* This court, relying on

'U.S. Const. amend. V.
"Nev. Const. art. 1, § 8, cl. 6.

5348 U.S. 26, 32-36, 75S. Ct. 98, 99 L. Ed. 27 (1954) (transfer of
property permissible to eradicate “slums” or “blight”).

‘Yd. at 32-33, 75 S.Ct. 98.

3la

Berman, previously upheld a redevelopment plan that was
attempting to eradicate blight.°

Under Nevada law, a redevelopment area must include a
“blighted area, the redevelopment of which is necessary to
effectuate the public purposes.”® The Pappases’ property was
not a slum. The City’s survey gave no indication that the
property was blighted in any way. There certainly were no
conditions injurious to the public health, safety, morals and
welfare. The property was adjacent to a savings and loan
building and across the street from a bank. The redevelopment
Statute requires “[a]ll noncontiguous areas of a redevelopment
area [to be] blighted or necessary for effective redevelopment”
before adopting a redevelopment plan.’ The Agency failed to
demonstrate that the taking of the Pappases’ property was
necessary for effective redevelopment; it demonstrated only
that it was desirable.

The California Supreme Court has conciuded that “[a] finding
of blight requires (1) that the area suffer ‘either soci.’ or
economic liabilities, or both, requiring redevelopment i: ‘xe
interest of the health, safety, and general welfare’ and (2) the
existence of one of the characteristics of blight." In
Sweetwater Valley Civic Ass’n v. National City, a
redevelopment agency sought to take a golf course it
considered blighted so that a private party could construct a

*Urban Renewal Agcy. v. lacometti, 79 Nev. 113, 121-22,379 P.2d
466, 467 (1963).

°NRS 279.586(1)(a).
’NRS 279.586(1)(f).

‘Sweetwater Valley Civic Ass'n v. National City, 18 Cal. 3d 270,
133 Cal. Rptr. 859, 555 P.2d 1099, 1103 (1976) (quoting California statute
governing redevelopment of blighted areas).

32a

‘shopping center.’ The court concluded the agency lacked
evidence of social blight and that the golf course was
economically profitable; therefore, it was neither an economic
nor social liability.'°

Here, there was no evidence of blight in or around the
Pappases’ property; thus, the goal of eliminating blight, which
in some cases may be a legitimate public use, is not applicable
in this case. The Supreme Judicial Court of Massachusetts
considered limitations on the acquisition of private lands and
the definition of public use in a 1955 decision involving facts
similar to these.'' There, the Massachusetts Legislature
proposed an act that would authorize the use of public funds to
acquire private lands, to be followed by redevelopment of some
portions for public use and the sale of the remainder to the
highest bidder for private use.'* The court held that the
expectation that adjacent areas and the city as a whole would
benefit from the taking did not constitute a public use.'? The
court further noted,

[I]n dealing with this difficult subject one proposition is
thoroughly established practically everywhere, and so far as we

are aware without substantial dissent, and that is that public

money cannot be used for the primary purpose of acquiring a
either by eminent domain or by purchase private lands to be
turned over or sold to private persons for private use.'*

"Id. at 1100.
rd. at 1104.

''In re Opinion of the Justices, 332 Mass. 769, 126 N.E.2d 795
(1955).

271d. at 796-97.
37d. at 803.
47d. at 802.

SS

33a

Federal courts have agreed, particularly when the claimed
public use is pretextual:

“If officials could take private property, even
with adequate compensation, simply by
deciding behind closed doors that some other
use of the property would be a ‘public use,’ and
if those officials could later justify their
decisions in court merely by positing ‘a
conceivable public purpose’ to which the taking
is rationally related, the ‘public use’ provision
of the Takings Clause would lose all power to
restrain government takings.”"®

The taking of the Pappases’ property by the City of Las Vegas
Downtown Redevelopment Agency under the pretextual guise
of a “public use” is unconstitutional and void, since the plan
was to give the property to the Fremont Street Experience, a
private limited liability company, which would receive all
revenues from the parking garage and retail space leases.

I would affirm the district court’s dismissal of the case.
MAUPIN, J., dissenting.
I would affirm the result reached by the district court based

upon my dissent in Las Vegas Downtown Redevelopment v.
Crockett.’

'°99 Cents Only Stores v. Lancaster Redevelopment, 237 F. Supp.
2d 1123, 1129 (C.D. Cal. 2001) (quoting Armendariz v. Penman, 75 F.3d
1311, 1321 (9th Cir.1996)).

'117 Nev. 816, 34 P.3d 553 (2001).

De

34a |

Amendment of the Plan

The Fremont Street Experience, the redevelopment project in
this matter, is subject to the same redevelopment plan and is
within the same redevelopment area with which we were
concerned in Crockett. Because I conclude that the signal
feature of the project, the vacation of the oldest and one of the
most traveled public boulevards in the city, effected a material
change to or deviation from the governing redevelopment plan,
I also conclude that the Agency improperly failed to seek
formal amendment of the Plan before taking properties via
eminent domain.

The Crockett majority held that the vacation of four streets and
the relocation of a public park did not constitute a material
deviation from or change to the redevelopment plan involved
in this case. A fair reading of the majority opinion in Crockett
supports the implied ruling by the majority in this case that
resort to the formal amendment process provided for under
NRS 279.608 was legally unnecessary. This notwithstanding,
I remain of the view that Crockett was wrongly decided on its
facts and should be revisited.

The redevelopment area in this case encompasses virtually the
entirety of old downtown Las Vegas, bounded on the west by
Martin Luther King Boulevard, on the east by Bruce Avenue,
on the north by Washington Avenue, and on the south by
Sahara Avenue. As noted by the majority in Crockett, the plan
was approved to “eliminate and prevent the spread of blight and
deterioration,” contemplating acquisition of real property by
purchase and by eminent domain, “transfer of acquired real
property to public or private entities,” and the “demolition of
buildings . . . construction of parks, development and
construction of hotel and ‘tourism/recreational’ facilities, and

gs RSA NN: SRY GN

35a

the widening, closure and vacation of streets and alleys” in the
redevelopment area.’ Although I agreed with the Crockett
majority that redevelopment plan amendments are only
necessitated when a proposed project entails a material
deviation from the redevelopment plan, and although I agreed
that formal amendment of a plan is not per se necessary to
commence any project, I concluded that the vacation of parks
and streets without formal plan amendment ran afoul of NRS
279.572 and NRS 279.608:

The ability to amend under NRS 279.608 is quite specific in
terms of the procedure to be followed. However, there are no
Stated criteria in this statute governing when the amendment
process is required, other than the statement in subsection (3)
that “substantial” changes must be submitted in a written
recommendation for consideration by a city or county
government to amend the plan. Thus, I believe NRS 279.608
and NRS 279.572 must be read together to determine
legislative intent. As noted, NRS 279.572 requires that
redevelopment plans show open spaces, layout of streets, size,
height, number and proposed use of buildings, number of
dwelling units, property to be devoted to public purposes, other
covenants, conditions, and restrictions, etc. While changes in
the use of individual dwelling units and building sizes may
involve mere details not requiring resort to the formal
amendment process, vacation of streets and relocations of
public parks depicted on the approved map are entirely
different matters. Certainly, vacation of streets and relocation
of parks are not “details”... 2

Thus, while the plan in Crockett and in this case empowers the

"Id. at 819, 34 P.3d at 555.
"Id. at 834, 34 P.3d at 565 (Maupin, C.J., dissenting).

36a

Agency to vacate public streets, as well as take other actions
without resort to formal amendment of the plan, I am of the
view that such powers are beyond those sanctioned in the
statutory framework governing redevelopment unless the plan
itself has been approved with the material changes sought. In
Crockett, | also commented upon the Agency’s need to promote
flexibility and quick response to changing conditions. In doing
so, I noted that the vacation of streets was not a measure that
interfered with the need for expeditious action in response to
changing economic conditions. I would also note that the
assemblage of multiple parcels, as was done in this case to
build the garage that now occupies the properties owned by the
Pappas family, was likewise not done as a quick response to
changing conditions. No one in this controversy has seriously
suggested that the economic blight the City and the Agency
sought to alleviate was anything other than a long-term
developmental problem.

My vote to affirm is not based upon agreement with the district
court’s myriad justifications for dismissing the eminent domain
action below, including its ruling that all redevelopment
projects implicate the formal amendment process under NRS
279.608. Rather, it is based upon my view that, while there is
- no absolute requirement that redevelopment plans be formally
amended to accommodate any redevelopment project, the
nature of the project in question here mandated that the Agency
submit to an amendment process prior to utilizing the power of
condemnation to consolidate and assemble the affected parcels.
In this, I note that the district court did not have the benefit of
the Crockett decision when it determined that formal
amendment of the Plan was a condition precedent to the
exercise of eminent domain in this instance. However, as
discussed below, because plans such as the 1986 Plan at issue
here must of necessity be drafted in general terms, the

37a

requirement to amend should be fairly broad.*
Blight issues and the amendment process

Appellants claim that any issue of blight was conclusively
resolved at the termination of the ninety-day protest period
under NRS 279.609 following the adoption of the Plan in 1986,
during which respondents took no action concerning the
findings of blight within the redevelopment area. Respondents
claim that evidence in support of the original determination of
blight in the redevelopment area was flawed and insufficient.
This, in fact, was one of the primary underpinnings of the
district court’s decision. To me, neither side has completely
analyzed the procedural framework within which blight issues
may be raised.

Appellants correctly argue that any questions regarding the
problem of potential or existing generalized blight in the
redevelopment area was conclusively established after
expiration of the protest period following adoption of the
original Plan. In my view, the district court relied too heavily
upon the documentation it ordered produced concerning blight
studies prior to the adoption of the Plan and the delineation of
the redevelopment area in 1986. As noted by the Agency, the
development of elaborate or comprehensive written
documentation of blight was even unnecessary to a valid
determination by the City that the redevelopment area as a
whole contained widespread physical, social and economic
blight. This was a decision that could be properly drawn from
individualized knowledge of members of the Council who were

‘Projects such as the Fremont Street Experience are extensive
enough to require material changes to a redevelopment plan beyond simple
vacation of streets, thus implicating the formal amendment process.

38a

in a position to judge the merits of the blight issue. Because no
one lodged objection to the blight findings within the
ninety-day period, any judicial tribunal must give deference to
those findings. This deference, however, does not end the
matter. Here, respondents could have reasonably concluded at
the time that such a protest was unnecessary because the Plan
did not establish that the Plan area suffered from blight in its
_ entirety and that they could protest at a later time whether a
particular project would meet the objectives of the Plan, i.e.,
the alleviation of blight in their particular neighborhood and its
environs. Going further, it is quite understandable that no
individual landowner lodged formal objections either
administratively or within the judicial system because of the
daunting and probably prohibitively expensive task of
challenging the validity of the entire Plan. Also, because ample
justification existed to support the establishment of the
downtown redevelopment area, and because the mayor, city
manager, members of the Council and at least one attorney
representing the City ma

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386001_0912%3A1. Public record. Not legal advice.
