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Judges vs. Private Property

September 22, 2003

The judiciary's war on private property continues in Las Vegas. To borrow a line from Rush Limbaugh, the bad guys in the old west used to wear black hats, now they wear black robes.

This was proved again earlier this month as the Nevada Supreme Court sided with the city of Las Vegas over the Pappas family concerning land located in downtown Las Vegas that the city took in order to build a parking garage for the Fremont Street Experience. In a 5-2 decision, the court ruled that taking the property "did not violate the state or U.S. constitutions." What was that about life, liberty and the pursuit of happiness?

The late John Pappas opened the White Spot restaurant on Fremont Street in the 1920's. Mr. Pappas was famous for feeding the poor free soup from the back door of his downtown restaurant while the Hoover Dam was under construction in the early 1930's.

Upon his death, Pappas left a 6,000 square foot retail center to his wife Carol, a Greek immigrant who remembers the Nazi occupation of her homeland when she was a girl.

The city of Las Vegas Downtown Redevelopment Agency first took an interest in the Pappas property in 1990. The city had its eye on clearing a one-square-block area located at the southwest corner of Las Vegas Boulevard and Fremont Street, with the intent of handing it over to developer Bob Snow, who had redeveloped property in downtown Orlando, Florida into an entertainment center called Church Street Station in the 1970's.

Besides the Pappas property, the one-block area contained the Cornet Store, the First Western Savings building, and a small building owned by former U.S. Senator Chic Hecht. In 1991, the City Counsel, in a 3-2 vote, decided that it couldn't take the block, because the block did not constitute "blight." Supposedly, the definition of blight is — properties that are boarded up and are considered a nuisance by the city.

But, soon after that vote, Jan Jones was elected Las Vegas Mayor, and again the city block that included the Pappas property was targeted. The city made Mrs. Pappas an insultingly low $450,000 offer for her property, while at the same time offering former Senator Hecht over $4 million for his same-sized parcel. Pappas refused the offer and insisted on meeting with the Mayor.

During their meeting, Mrs. Pappas explained to Mayor Jones that she had never had a vacancy in her 6,000 square foot center and that she depended on the $6,000 per month that she received in rent from the property. Jones would not budge from the city's $450,000 offer and stated "Mrs. Pappas, you have had your property long enough. It's time to give it up!"

In early-1994, the city of Las Vegas seized and bulldozed the Pappas property. A $23 million parking garage was erected on the site and the title to the property was quickly turned over to the Fremont Street Limited Liability Company, whose members are the eight largest downtown casino owners.

But, the gritty Mrs. Pappas would not go away. She sued the city and won, when District Court Judge Don Chairez, ruled in her favor in 1996. Chairez ruled that the city never proved that the area was blighted; it never proved that the casino owners couldn't afford to buy the land themselves, nor did they demonstrate how a privately-owned parking garage constitutes a vital "public use." Judge Chairez ruled that the property seizure was null and void.

Of course the city immediately appealed the Chairez decision to the Nevada Supreme Court. Another three and a half years later in 2000, briefs were filed, along with 5,000 pages of documentation from the city's attorneys.

Now, after the wheels of in-justice have slowly turned for more than a decade with the Pappas family never receiving a dime in compensation, the Nevada Supreme Court rules that the condemnation was A-OK, and "furthers the public purpose of eliminating blight in downtown Las Vegas," wrote Justice Nancy Becker in the majority opinion. Becker also wrote that, "the fact that the Pappas property itself was not blighted does not prohibit its taking through eminent domain proceedings."

The majority of the court also found that the garage, "was not built to serve 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 [Fremont Street Experience]."

However, despite city government's redevelopment nonsense, downtown Las Vegas continues to languish, because most Las Vegas visitors patronize the newer, more exciting resort/casinos and shopping malls that have been built on the Strip [south of downtown], with private investment dollars. The garage, that the city and the courts believe to be so vital, sits half empty most of the time.

Carol Pappas' son Harry now intends to take their case to the nation's highest court. "What we hope to get here is a ruling from the U.S. Supreme Court that will put an end to this kind of tyranny, this kind of oppression, this kind of injustice of taking people's private property and turning it over to robber baron casinos," Harry Pappas told the press after the Nevada Supreme Court decision, "We're hoping this will be a landmark case."

Unfortunately, looking to the U.S. Supreme Court for satisfaction will likely prove to be frustrating. As Dartmouth economist William Fischel told Reason.com, "The Supreme Court clearly does not like most of these cases and is leery of giving plaintiffs a federal forum. They want to keep the cases in the state courts."

Without intervention from the Supreme Court, the value of the property will ultimately be determined back in District Court. But, for the Pappas family, money is not the issue. As Harry Pappas says, "My goal is to be sitting in a bulldozer with a hard hat on and knocking down that garage."

Murray Rothbard wrote in Power and Market, "The government itself is the original holder of the 'right of eminent domain,' and the fact that the government can despoil any property holder at will is evidence that, in current society, the right to private property is only flimsily established. Certainly no one can say that the inviolability of private property is protected by the government. And when the government confers this power on a particular business, it is conferring upon it the special privilege of taking property by force."

Flimsily established indeed. With this ruling in their pocket, the guys and gals at Las Vegas City Hall can run roughshod over property owners throughout the City's designated Downtown Redevelopment Plan area. The only thing that has kept the city at bay to this point has been the heroic Pappas family and their willingness to fight.

Long shots don't come through in Las Vegas very often, but maybe, just maybe, we'll get to watch Harry Pappas knock down that garage.


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