Price tag grows in abandoned street case

The price tag Carson City taxpayers may have to pay a casino owner has grown from $125,000 to perhaps as much as $375,000 over the last 14 years and continues to gather interest during a 15-month wait for a court decision.

City attorneys, though, continue to fight the claim by Capital City Entertainment, owners of Carson Station and Pinon Plaza casinos, meaning the case may stretch on through more appeals.

District Court Judge Bill Maddox would not estimate Friday when a decision will be made in the case. "It's under submission and he's making his decision," said a clerk in Maddox's office.

Capital City Entertainment filed a motion in September 2002 with Judge Maddox after the Nevada Supreme Court ruled the company did not have to pay the original $125,000 to the city for a street abandonment on Ninth Street to Carson Station in 1989.

After several years of court rulings and rehearings, it was decided in September 2002 the pieces of land adjacent to private property were "dedicated" to the city, and the city was simply returning the property to the owners.

City officials obtained use of the streets, roads and alleyways in Carson City when the townsite was released from the federal government in 1866. The Supreme Court ruled "because the federal government dedicated the streets in Carson City to public use, with title vesting in the municipality, state law precludes Carson City from extracting payment as a condition of abandoning streets."

With decisions made in favor of Capital City Entertainment, the company asked Maddox to decide how much interest the city owed in addition to the original $125,000. Company President Clark Russell said he estimates the interest to be at least $250,000 on top of the original payment, using a calculation of "lawful interest."

The longer the decision remains on Maddox's desk, any interest on the payment the city may be liable for will continue to accrue.

"The clock keeps ticking," Russell said. "It's an unfair situation."

The Carson City District Attorney's Office filed a response to the payment claim, arguing the case had exceeded legal time limits for the company to file a claim for payment.

The city is also waiting to hear what Maddox will decide because two other claims have since been filed that may result in the city paying back thousands of dollars to the Carson Nugget and a shopping center.

Deputy District Attorney Mark Forsberg said the longest period for such actions is six years from when the transaction took place.

Also, theoretically, the transaction would have to be undone, which is not likely to happen in light of the fact that Carson Station has built structures on the abandoned street.

"Under the circumstances, how can you go back in time and redo the transaction?" Forsberg said. "Also there is an issue about when the interest began accruing. At the best, we're saying it should only accrue when everybody knew the city shouldn't have charged."

Forsberg said it is likely that whatever Maddox decides in the case will be appealed.

The Carson Nugget is waiting to act on its lawsuit against the city for a section of streets abandoned on its property.

Another case involves the City Center, a block-long section of street abandoned between Highway 50 and John Street to allow construction of the strip mall where Tito's Restaurant is located.

The city is also waiting for a decision in the City Center case after arguing the case in Maddox's court room April 30.

Contact Jill Lufrano at jlufrano@nevadaappeal.com or 881-1217.