Henderson alleges Milam had struck secret deal to develop homes on stadium site
28 February 2013
28 Feb. 2013 10:32 a.m.
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Developer Chris Milam secretly reached a deal in August to develop part of his sports-stadium project site in Henderson as residential homes and later claimed that even if he sold the entire site for $100 million, he would “leave most of the profit on the table,” according to newly filed documents in a fraud case against him.
Lawyers for the city of Henderson, which sued Milam’s group last month for allegedly trying to flip the 480-acre government-owned site near the M Resort to other developers, said in court papers Wednesday that the group launched discussions with developer Juliet Cos. as early as April 24 last year and signed a deal Aug. 9 with Juliet principal John Stewart.
Las Vegas-based Juliet allegedly agreed to provide $15 million to help Milam’s group buy the land from the U.S. Bureau of Land Management. Both sides also agreed to enter into a joint venture to develop one-third of the project site for residential uses, including single-family homes, with Juliet contributing $7.5 million to the deal, according to the city.
The Aug. 9 contract was signed more than three months before Milam, on Nov. 28, allegedly deposited the balance of the land’s $10.5 million purchase price into escrow and, that same day, hand-delivered a letter to Henderson City Hall saying he was terminating the stadium project agreement because the arena plans were not viable.
Henderson officials claimed in the filing Wednesday that they were supposed to have been kept in the dark about the Juliet plans until after Milam closed escrow on the property, which still has not happened yet.
Also included in the filing was an email dated Sept. 28 that Milam purportedly wrote, in which he told several employees at sports and entertainment conglomerate AEG that, among other things: “Realistically, I could sell the land today for $100m on my investment of $25m, but doing so would be to leave most of the profit on the table.”
The email and the Juliet contract were among several documents included in the filing in Clark County District Court. Altogether, they represent the city’s strongest purported evidence so far that Milam allegedly tried to sell the land instead of developing his proposed Las Vegas National Sports Complex.
In an email, Milam attorney Terry Coffing dismissed the court filing as "(m)uch ado about nothing."
He said the stadium project site's zoning "includes a residential component," something city officials "will never acknowledge" even though it's "clearly" stated in Milam's development agreement with City Hall.
"The city was well aware of discussions with potential partners including Juliet," Coffing said in the email. "How did the they know (sic)? They suggested it!"
Efforts to reach a Juliet representative or Stewart for comment late Wednesday night were unsuccessful.
Other documents in the filing include an email dated April 18 that Milam purportedly wrote to M Resort President Anthony Marnell, in which Milam acknowledged the city’s efforts to prevent him from flipping at least part of the project site.
He told Marnell: “With respect to disposing of the land without ever developing it (flipping), we are free to sell the land to get our money back (or the City will buy it from us for what we paid for it through a right of first refusal — although that’s unlikely as they don’t have the money). The City has however attempted to prevent flipping the land for a profit until we built at least the arena. If we wanted to do something other than what we’ve currently planned it would require a renegotiation and rezoning. It’s best to review the agreements in a discussion.”
Three months later, on July 11, Milam allegedly emailed his lawyer Christopher C. Stephens and public relations-lobbying chief Lee Haney to say he wanted to develop one-third of the project site for single-family residential uses, which, according to the city, would be in direct violation of the group’s development agreement with City Hall.
Milam purportedly wrote that “there is no reason for anyone to be talking to the City of Henderson at this time. Anyone we talk to must keep things confidential. The City isn’t a partner and they don’t need to know our internal capital structure ... The first step is therefore a very strong confidentiality agreement with any of the builder’s (sic) who have expressed an interest.”
Milam, who lives in Texas, laid out plans for an indoor arena and three stadiums in Henderson, though no teams have committed to the facilities. The combined price was expected to be more than $1 billion.
In September 2011, the Henderson City Council approved an initial project agreement with Milam’s group and voted to support the BLM land sale.
A month ago, city officials sued Milam, his lawyers John Marchiano and Stephens, as well as Haney and land consultant Michael Ford. Instead of following through on the project plans, the city alleged, efforts were made to sell the land “piecemeal” to residential and commercial developers at a “substantial profit.”
Stephens has paid $750 to settle the accusations against him.
Lawyers for City Hall recently filed court papers saying they want to add Ford’s consulting firm — Abbey, Stubbs & Ford LLC — to the list of defendants.
The Henderson firm is poised to earn a $528,000 fee when Milam’s Silver State Land LLC formally acquires the project site, according to the city. The escrow-closing date has been extended twice in recent months and now is set for March 28.
Ford’s partner Bob Abbey, who was not named as a defendant, was a founding partner in the firm in 2005 but left in 2009 to become director of the BLM. He rejoined the consulting group last June after retiring from the agency, according to the firm’s website.
Lawyers for City Hall have said in a court filing that it’s “unknown what level of involvement Abbey had at the BLM” in connection with the land sale, but “it is clear that Ford spoke with him about the sale and, as a result, was assured of the ‘full support and cooperation at the local, regional and national level’ from the BLM.”
According to the city, Abbey was the BLM’s director when his old consulting firm — then known as Robcyn LLC — initially was hired to work on Milam’s project. Abbey “is likely” to now share in the firm’s contingency fee once Milam closes escrow, the city alleged.
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