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Case Synopsis

In November 1985, the City of Las Vegas Downtown Redevelopment Agency (Agency) was created to evaluate and determine whether redevelopment was necessary to combat physical, social, or economic blight in various sections of the city. The Agency identified conditions in downtown Las Vegas constituting “blight” within the definition of NRS §279.388, and considered and approved a redevelopment plan (Plan) with the purpose of eliminating blight and to encourage businesses and individuals to return to a safe downtown area with adequate parking and facilities. Although the Pappases’ property was included within the Plan, no one, including the Pappases, challenged the Plan within the ninety-day period following its adoption, as required by statute. Several years passed before the Agency entered into an agreement with a consortium of downtown casinos to develop the Fremont Street Experience (FSE). The FSE required construction of a parking garage on property owned by thirty-two individual parcels, three of which were owned by the Pappases. In November 1993, the Agency filed an eminent domain complaint to acquire the Pappases’ property, and gained possession of the Pappases’ land in January 1994 after the Pappases failed to oppose the Agency’s motion for immediate occupancy pending entry of judgment. The Pappases filed a counterclaim alleging six causes of action, and then filed a motion for rehearing regarding the Agency’s immediate occupancy, which was denied. The Agency took possession of the property, demolished the existing building, and constructed the parking garage. More than three years after the district court had granted the motion for occupancy and the garage had been constructed, the Pappases filed a motion to dismiss the Agency’s eminent domain complaint. The district court dismissed the Agency’s eminent domain complaint, concluding, among other things: that the ninety-day statute of limitations in NRS §279.609 did not preclude judicial review of the taking; that the Agency lacked authority to use eminent domain because there were other less restrictive means to obtain the property; that the Agency acted in bad faith; and that the Agency’s taking of the Pappases’ property was not a public use. The Agency appealed, arguing the district court erred in entering an order dismissing the Agency’s eminent domain complaint. The Pappases cross-appealed, contending the district court erred in entering an order dismissing their counterclaims. The Nevada Supreme Court concluded that the Agency’s use of eminent domain was constitutionally permissible because both the Federal and Nevada Constitutions allow the taking of private property for public use, because the Agency acted under a clearly defined economic redevelopment statute, and because a court cannot substitute its judgment when a legislative body determines a specific project furthers economic redevelopment and supports that decision with substantial evidence. The majority concluded the district court erred in dismissing the Agency’s eminent domain complaint.