The city opted to settle its dispute over reimbursement for street-abandonment costs with a local business owner Thursday, "opening a Pandora's box" of similar claims against the city, according to the mayor.
Carson City Supervisors voted 3-1 Thursday to give Carson Station owner Clark Russell $200,000 in cash plus $100,000 in public improvements to the Boys and Girls Club of Western Nevada, a nonprofit of Russell's choosing.
"I think it's a fair settlement," Russell said. "This is has been festering for a long time, and we wanted to get this behind us."
Supervisors Shelly Aldean, Pete Livermore and Robin Williamson voted in favor of the settlement. Mayor Ray Masayko voted against it.
Supervisor Richard Staub was absent during the vote, recusing himself because of a conflict of interest. Staub said he will file his own claim against the city for money he and partner Thomas Metcalf paid for the abandonment of a portion of 10th Street in 1998.
Russell sued the city in 1997 for reimbursement of $125,000 he paid for the abandonment of Ninth Street between Carson and Curry streets, where he built the Carson Station Casino.
Russell sought reimbursement after learning the city may never have had legal ownership of the section of street he bought.
In September 2002, the Nevada Supreme Court ruled that "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."
The Carson City District Court ruled in Russell's favor, and the board appealed the decision with the Nevada Supreme Court, which also ruled for Russell.
The board's latest appeal was filed last month with the Nevada Supreme Court.
In several appeals, the city has claimed a statute of limitations applies to claims filed by property owners for reimbursement, but District Court and Supreme Court judges have ruled that the statute of limitations argument is not viable.
Weary of spending more taxpayers' money on the issue, Livermore said he pushed for settlement during a closed-session meeting Sept. 2.
Thursday, he said the city may likely face claims by at least four more property owners, including the Carson Nugget.
Those claims could total more than $1.5 million, according to Carson City District Attorney Mark Forsberg.
Masayko, visibly angry, railed against the courts' denial of the statute argument and the board's decision Thursday.
"It's virtually punitive, wiping out the statute of limitations," he said. "Abe Curry could come back against us. I am at a loss to understand how they came to that conclusion."
Masayko said if the matter was up to him, he would take the issue to trial in front of a jury.
"This is a terrible decision," he said before the vote, adding everyone knew how it was going to go.
Aldean disagreed with Masayko's desire for a jury trial.
"It's not appropriate to debate the statute issue on the backs of Carson City taxpayers," she said.
If Russell had again won in court, he would be entitled to the reimbursement, plus accrued interest. He said the amount would have exceeded $380,000.
Carson City Boys and Girls Club Director Cathy Blankenship was elated to learn of Russell's $100,000 contribution.
"I think it's phenomenal," she said. "He's one of our biggest supporters."
Contact Robyn Moormeister at rmoormeister@nevadaappeal.com or 881-1217.
