Another Sin City Scam
Misuse of Eminent Domain
INSIDE VEGAS by Steve Miller
May 27, 2003
Part of full page ad that appeared in Las Vegas Review Journal on May 20,
"Life and liberty are secure only so long as the
right to property is secure." - Thomas Jefferson
"Mrs. Pappas, you've had your property long enough. It's time to
give it up!" That is a direct quote attributed to former Vegas Mayor
Jan Jones by John, Harry, and Carol Pappas, and attorneys Glade Hall and
In 1990, the Las Vegas Downtown Redevelopment Agency wished to clear
a one-square-block area located at the southwest corner of Las Vegas Blvd.
and Fremont Street so that Florida developer Bob Snow could build a project
then to be known as Church Street Station. At the time, the block
included the Cornet Store, First Western Savings, a small building owned
by former US Senator Chic Hecht, and a 6,000 square foot shopping center
that was owned by the pioneer Pappas family for over 60 years.
In order for the city to take the properties, it had to abide by several
laws pertaining to the proper and legal use of eminent domain. According
to Nevada law the most important qualification for the seizure of private
property for "higher and better" use was that the property being
taken must be considered "blighted." The legal description
of "blight" includes property that is either vacant, boarded up,
or had become an attractive nuisance in the neighborhood. In the
case of the properties located within the block the city wanted to take,
none of the properties qualified under the legal determination of "blight."
Mirage developer Steve Wynn was a staunch opponent of the Snow project.
In 1991, Wynn successfully convinced the city council that because the
block was not "blighted," the council should not condemn the property
and turn it over to his rival Mr. Snow.
The old city council of which I was a member, determined by a three-to-two
vote that it could not take the block by eminent domain because of the
lack of "blight." I was the swing vote because I believed in what
Mr. Wynn said about the property not being blighted, therefore it was not
qualified for seizure. Consequently, Mr. Snow's project was moved to it's
present location at Main and Ogden, now named the Main Street Station Hotel
and Casino. It later filed for bankruptcy and was bought for twenty-five
cents on the dollar by the Vegas based Boyd Group.
In 1991, a new mayor and a new council member were elected. To
the amazement of observers of Las Vegas Downtown Redevelopment history,
the new mayor and her obedient council reversed the decision of the previous
council and immediately seized a number of private properties that were
not legally "blighted." The Pappas family's' property was included
in the seizure.
Mrs. Pappas was a 65-year-old Greek immigrant who escaped the Nazi occupation
her homeland as a young woman to settle in America to live the American
dream. The city's latest scheme was to clear the Pappas land, build
a parking garage, then deed the new structure to a cartel of downtown casino
owners including Mr. Wynn who just five years earlier had argued that the
property was not legally qualified to be seized.
Ironically, fifty years after the end of World War II, Mrs. Pappas with
her sons Harry and John were to come face to face once again with the tyranny
she and her family had escaped from during World War II.
When informed of the city's eminent domain game plan, Carol Pappas requested
an audience with Mayor Jones. Carol explained to the mayor that the
shopping center was fully occupied with businesses ranging from a Mexican
restaurant to a law firm. She told Jones how she derived a $6,000
per month income from her long-term tenants, and how the center had never
had a vacancy. Mayor Jones told the Pappas family and their two attorneys
that they were to receive no more than $450,000 for their property, and
that it was to become a "much needed public parking facility."
Mayor Jan Jones then tersely stated according to witnesses, "Mrs. Pappas,
you have had your property long enough. It's time to give it up!"
The meeting ended. A short time later, bulldozers disposed of the
Pappas' shopping center.
During the meeting, Jones neglected to mention that the "public"
use of the new parking structure was to last for only six months before
she would deed the structure at no cost to her friends in the casino business.
Jones also neglected to mention that she was about to personally invest
in Mirage/Golden Nugget stock, one of the casinos that was to become an
owner of Mrs. Pappas' property. (The Nevada Ethics Commission later cleared
Jones of any wrongdoing regarding her gaming stock holdings by determining
that she was not a "major stockholder.")
The Pappas property consisted of 7,000 square feet of land located on
a corner fronting the Strip and Carson Ave. In 1996, Former US Senator
Hecht received $4.3 million (with Councilman Michael McDonald's blessings)
for a similar 7,000 square foot parcel of land. Hecht's land was located
on the same block but his land was not on a corner and fronted only on
Fremont St. making it worth less than a corner parcel. Chic Hecht is a
stockholder in Boyd Group, a partner in the Fremont Street Limited Liability
Corporation that now owns the Pappas' corner.
(Councilman Michael McDonald who is currently running for his third
term, voted in 1995 to approve using taxpayer money to fund the casino's
court fight to keep the Pappas property.)
In addition to $4.3 million, Hecht accepted a $150,000 per year job
as a lobbyist for the Fremont St. Experience L.L.C. One of his first
duties was to contact Mrs. Pappas and lobby her to accept the casino's
lowball offer. She declined. In 2000, Jones' successor Oscar Goodman
offered the Pappas family $4.5 million which they also refused. When asked
why, Harry Pappas said it was for the "principal." He then stated
that he just wanted his land returned even though there was a 5 story parking
garage built on it. He didn't care. He said "Just give my family back
what was stolen from us."
In 1996, District Judge Don Chariez ruled in favor of the Pappas family
and ordered a jury trial to determine the true value of their property
and how much they are owed in back rent. The Pappas family' also
filed a punitive damage lawsuit against Jones personally for violating
their constitutional rights.
In 1999, Chariez was convinced to step down from the bench and run for
Congress therefore turning the case over to another judge who on January
15, 1999, ruled that yet another appeal of the case by the casinos would
be sent back to the Nevada Supreme Court for what he called "clarification."
The Pappas' attorneys called the casino's request for another appeal a
stalling tactic to try to wear down Mrs. Pappas.
Meanwhile out on the Strip, Steve Wynn was engaged in a continuing battle
with the owners of a small apartment building known as Villa
De Flores. The Flores property is located smack in the middle of the
Mirage parking lot and may have been responsible for curtailing the westerly
expansion of the hotel. To Wynn's obvious dismay, Mr. Flores would
not part with his property for less than $7 million (Wynn offered him $3
million). It appeared to many observers that Wynn might have been
pleased if the county stepped in to take the property by eminent domain
and thus allow Wynn a "higher and better use" for it.
(Wynn has since resigned from Mirage Resorts and is presently building
another Strip hotel.)
The Pappas case had set a few precedents that would hinder the county
from potentially deciding to exercise eminent domain against Flores - if
they were asked to do so. In any event, Judge Chariez by ruling in
favor of the Pappas family threw a monkey wrench into all future eminent
domain seizures in Nevada - at least for the time being.
It may be coincidence, but it was reported that Wynn one of the persons
who convinced Chariez to run for congress thereby causing him to step down
from the bench in order to be eligible. By stepping down, Chariez
inadvertently opened the way for another judge to accept the casino's motion
for reconsideration of their appeal request. It may also be coincidence,
but on Sept. 25, 1998 Chariez informed me that immediately following his
stepping down from the bench, Wynn stopped showing interest or support
for his congressional race. He told me that Mr. Wynn "is no longer
taking my calls."
In March 1998, GEORGE MAGAZINE wrote the Special Report: THE
10 MOST CORRUPT CITIES IN AMERICA. The story featured
the Carol Pappas case. Craig Offman opened his story with a quote, "'The
politician who steals is worse than a thief. He is a fool,' said George
W. Plunkitt, a turn-of-the-century New York political boss. 'With all the
grand opportunities around for the man with a political pull, there’s no
excuse for stealin’ a cent.'"
Undaunted by the GEORGE article, Mayor Jones and her council
continued spending over $1 million taxpayer dollars defending their taking
of the Pappas' corner.
Even with so much press, the story was beginning to lose its edge. Harry
Pappas blamed it on the law of attrition. Feeling that the city and the
casinos were trying to wear his family down, on Tuesday, May 20, 2003,
Pappas took out a full page ad in the Las Vegas Review Journal
keep his story alive. It's not unusual that the Sin City news media suffers
a lapse of memory in cases involving wealthy casino owners, hence the startling
advertisement that tells about John Pappas, Sr. arriving in Las Vegas in
1902 and opening a downtown restaurant where he paid his employees with
silver dollars. It also diagrams how a city had gone bizerk and taken one
privately owned piece of land and transferred it to another private owner
who had more political juice.
Part of full page ad that appeared in Las Vegas Review Journal on May 20,
Even with the Pappas case looming over city leader's heads, another
possible misuse of the power of eminent domain surfaced recently when Fred
"Rick" Rizzolo, a topless bar owner who is the subject of a federal
investigation for alleged mob
ties, told a reporter that the government was going to use eminent
domain to remove his long-time nemisis Buffalo Jim Barrier, owner of
an auto repair business that is blocking the expansion
of Rizzolo's bar. However, because of an increasing scandal involving alleged
bribery of public officials, a scandal that includes Rizzolo, his expansion
plans have been put on hold.
Vegas Mayor Goodman, however, left a crack in the door this week by
stating, "I will not consider using eminent domain in the immediate future."
He had eariler stated that he would "never" use the law to take
a private property to benefit another private interest. Rizzolo has recently
been showing plans
for a new topless bar with a taxpayer funded driveway and sidewalk running
through the middle of Barrier's garage.
Irony has many faces: Jan Jones after leaving office in 1999, went to
work for Harrah's and became a promoter of California casinos competitive
to downtown Las Vegas; The Fremont St. Experience parking garage is usually
empty and its' retail area has been boarded up since the day it opened;
the liability of the Fremont St. Limited Liability Corporation in the ongoing
Pappas lawsuit remains "limited," Councilman Mike McDonald,
a close friend of Rizzolo, is the subject of a Federal
Grand Jury probe into political corruption, and Steve Wynn must pass
Fred Flores' old apartment house every time he drives down Spring Mountain
Road to the site of his new hotel.
Copyright © Steve Miller
email Steve Miller at: Stevemiller4lv@aol.com