Carson City leaders may decide to drop a federal lawsuit against the sale of public land in northern Douglas County if terms of an agreement reached with two major auto dealers is adopted today.
The deal would protect a prime tax revenue source for the city by banning the development of an auto mall across its border for up to two years.
The city sued the Bureau of Land Management in August, citing violations of federal environmental land management acts over the sale of the 144-acre parcel to Michael Hohl and Dink Cryer, who own several auto dealerships in Carson.
Officials said Wednesday stopping the potential development of an auto mall in Douglas County outweighed concerns over environmental or other impacts cited in the lawsuit.
"The impacts to Carson City of the development of the north Douglas County property are of great concern to us, but the need to retain our auto dealers is an overriding consideration," said Supervisor Shelly Aldean, who took part in negotiating the agreement with auto dealers in the past month.
Auto dealers and gasoline sales usually account for 35 percent of the city's tax revenue base each year. The city has taken several hits over the past year with the loss of Wal-Mart and Kmart and the development of new retail outlets in Douglas County.
"Our concern was that they would use that property to create an auto mall in Douglas County," said City Manager Linda Ritter.
The city finished a draft agreement with Hohl and Cryer on Wednesday that will be considered by the Board of Supervisors today.
The deal would require Hohl and Cryer to promise not to allow development of auto dealerships on the Douglas County land for up to two years through a deed restriction to allow the city and the dealers time to negotiate an incentive package and development of an auto mall in Carson. In exchange, the city would dismiss its lawsuit and allow BLM to complete the land sale.
Hohl and Cryer have six months to pay the balance on the $14.6 million purchase of the land. The deadline for the sale is Feb. 3. If the lawsuit is not dropped by then or a judgment made, the sale could fall through, or BLM could decide to do something else with the land, said Rex Wells, program manager at the state BLM office.
"We would just have to figure out what we are going to do," Wells said.
The agreement allows Hohl and Cryer to immediately purchase any property they believe would be necessary for the development of an auto mall in Carson City. It also calls for the city to produce a "reasonable" economic development incentive package for the auto mall.
Supervisors dismissed a deal that included a $27.5 million incentive package earlier this year for the development of an auto mall at the north end of the city along Hot Springs Road.
Within one year of the proposed agreement with Hohl and Cryer, the auto mall development will be reviewed. If they find that substantial progress has not been made, the restriction can be lifted on the Douglas County land to allow Michael Hohl Honda and Subaru Dealerships to relocate.
Hohl, who owns Cadillac, Oldsmobile, Buick, GMC, Honda and Subaru franchises and an RV dealership in Carson, is facing corporate pressure to upgrade or relocate his facilities, officials said.
"I think it accomplishes a number of things," Aldean said. "I am convinced that all people who participated in these agreements were doing so in good faith."
Supervisor Richard Staub, who is chairman of the city's AutoMall Workgroup that negotiated the agreement with the auto dealers, is also paid counsel for a state auto dealers association processing worker's compensation claims. Hohl is an investor in the association.
Staub's connection has raised some questions in the city, but Ritter said Staub will have to determine at today's meeting whether to decline participating in further discussions.
Douglas County Commissioner Bernie Curtis said Carson's actions against the sale were unwarranted from the beginning and will wait to see what happens today.
"It looks like Supervisor Staub worked a deal with Carson City auto dealers, and I'm sure that's good for Carson City. We'll see what it does for Douglas County," Curtis said.
Carson's controversial legal action against the sale of BLM land in Douglas County has drawn harsh criticism from Douglas officials.
"I think they've abused their neighbors," Curtis said about Carson's willingness to use the lawsuit to barter with auto dealers. "We've spent Douglas County taxpayer money on this.
"It's had a chilling effect on relationships," Curtis said. "It's certainly not how a neighbor treats a neighbor."
The city has spent $425,000 pursuing legal action against the BLM sale since June. Douglas County has reportedly spent $25,000 fighting for the sale.
Contact Jill Lufrano at jlufrano@nevadaappeal.com or 881-1217.
