Election Preview: Democrats largely lead in funding for seats on the state’s most powerful board

Clark County Government Center

Nevada’s most powerful local government body has been faced with major challenges this year, including a budget slashed as a result of a pandemic-induced economic downturn and the pressure of helping to reopen the economy in the state’s most populous county.

Ten candidates are entering the final weeks of their campaigns for the Clark County Commission, campaigns begun months before COVID-19 was on their radar. Democrats are dramatically outpacing their challengers in funding for three of these spots while a fourth is host to a high-dollar contest between two high profile politicians.

Of the commission’s seven seats, four are being contested this cycle, including those of the commission’s chair, Marilyn Kirkpatrick, in District B and incumbent Michael Naft, who’s raised more than $1 million since his 2019 appointment to the board, in District A. 

Crowded Democratic primaries in Districts C and D have whittled the field to two high profile nominees. In District C, Democrat and former Secretary of State Ross Miller is taking on Las Vegas City Councilman Stavros Anthony, a Republican challenger in a district where registered Democrats outnumber Republicans, but neither party holds a majority.

District D sees Democratic Party Chair William McCurdy II take on three nonpartisan opponents, with former Las Vegas fire chief David Washington putting up the strongest fight. McCurdy has been heavily endorsed and financially backed by commission members in the only up-for-grabs district with a Democratic majority of registered voters.

Commission members earn $86,000 per year, far more for their positions than state legislators make for their part time work, and whoever wins a seat on this board will oversee three quarters of the state’s population and one of its most famous and lucrative assets — the Las Vegas Strip.

District C

District C, which incorporates the northwest portion of the Las Vegas Valley, is host to a high-spending faceoff between Republican Las Vegas City Councilman Stavros Anthony and the former secretary of state, Democrat Ross Miller.

Democrats make up 38 percent of registered voters in District C while Republicans make up 32 percent and nonpartisans account for 23. Democrat Larry Brown, who currently holds the seat, has reached his term limit after serving on the board since 2009. 

Anthony, who was recently appointed mayor pro tem for the City of Las Vegas, is fighting to overcome Democrat’s slight registration lead and take the seat back for his party. The city councilman ran unopposed in June’s primary election while Miller won a six-Democrat race for the nomination with 38 percent of the vote.

Miller has been critical of his Republican opponent, condemning him on Twitter for statements Anthony made about holding “violent rioters” in Jean prison following Black Lives Matter protests in June and referring to the councilman as a “Trump crony.”

“I think there’s two issues that, in my mind, people care about,” Miller said during an interview with The Nevada Independent. “One is how to put the economy back on track and the other is making sure we keep people safe, both in terms of public health and also public safety. In both of those areas, I’ve got a lot of experience.”

Clark County Commission candidate Ross Miller.

When asked about his experience with economic issues and how he’d handle budget shortages in the county, Miller, the son of former Gov. Bob Miller, referenced his time serving on the Board of Economic Development under former Gov. Brian Sandoval as well as his two-term tenure as secretary of state during the last economic recession.

“My agency implemented deeper cuts than perhaps any other… and there weren’t easy answers,” he said. “We had to cut in all areas. I would imagine that the county process will be very similar.”

One department he believes should be prioritized when it comes to funding, Miller says, is the Las Vegas Metro Police Department. The Clark County Commission along with the Las Vegas City Council determines the budget of the LVMPD, and the county contributes 64 percent of its funding.

Miller shares this viewpoint with his opponent. Anthony, a retired police captain who worked with Metro for 29 years.

Clark County Commission candidate Stavros Anthony.

“My priority is to make sure that Metro is funded appropriately,” Anthony said. “That we have the best paid and the best equipped and the best trained police officers in the country and that we have code enforcement officers that are out there making sure that we have great neighborhoods.”

Although both candidates say public safety funding is vital to helping District C recover from the economic devastation of COVID-19, they have different priorities when it comes to helping the region become more economically resilient moving forward.

Anthony said that his priority, first and foremost, is opening businesses and getting people back to work. He intends to focus on reducing regulations, taxes, and licensing fees in order to help current businesses grow and encourage new businesses to open.

“Once people get back to work then they can start taking care of their families and they can start paying their tax bills,” he said, going on to emphasize that government mandates “have to start opening up” to allow people to get back to work. At the moment in the county, restaurants, stores, and event venues still have capacity limits in place to ensure social distancing.

“I think if businesses want their customers to wear a mask in their business, customers are going to want to wear a mask,” Anthony said.

Miller indicated that his approach may be more cautious, deferring to state guidance that he believes will ensure businesses “reopen safely,” while still acknowledging the need to reopen the economy for workers.

“I think it’s critical both to expand as safely as possible and try to reopen our economy,” he said.

According to Miller, the county needs to set its sights on long-term solutions that will ensure economic diversity and prevent losses in gaming from devastating the region.

“We can potentially move much more aggressively towards the development of many other target sectors,” Miller said. “Beyond gaming, where we’ve suffered so many layoffs.”

Both candidates have reported large contributions and high spending in the second quarter of the year. Anthony’s spending began even earlier: the candidate reported more than $200,000 in spending heading into the primary — even though he was running unopposed.

In the second quarter, Anthony reported $45,700 in contributions including major donations from NV Energy, developer Touchstone Living, which regularly presents development projects to the planning commission, and philanthropist Kris Engelstad McGarry, trustee of the Engelstad Family Foundation. He spent more than $63,000 on consulting and advertising in the same quarter and reported a cash on hand balance of nearly $212,000.

Miller has also seen large donations from developers, including $5,000 from Brass Cap Development, which recently began construction on a new industrial space located near Allegiant Stadium in Las Vegas, a project approved by the commission. Both candidates also received $5,000 donations from South Point. Miller received financial support from the Southern Nevada Building Trades Union’s PAC. The union also endorsed Miller in the race.

Additionally, Miller received a $5,000 donation from the campaign of the commission’s District F incumbent, Justin Jones.

Miller’s campaign reported $89,741 in spending, more than $74,000 of which went to Consili, Inc., a Democratic campaign management agency based in Las Vegas and run by political consultant Jim Ferrence. At the end of quarter two, Miller’s cash on hand balance was $3,640.

District D

In the heavily Democratic District D, which includes portions of North Las Vegas as well as downtown Las Vegas’ Fremont Street, Assemblyman and Nevada Democratic Party Chairman William McCurdy II is hoping to transition from Legislature to the County Commission. 

He faces three nonpartisan challengers on his quest, including a former Las Vegas fire chief with a history of community involvement, David Washington. Henry Thorns and Stanley Washington are also campaigning for the seat without a party affiliation.

McCurdy, who has represented District 6 in the Nevada Assembly since 2017, says that he sees “untapped potential” in Clark County’s District D.

Clark County Commission candidate William McCurdy II.

“I’m passionate about my district. I’ve been here my entire life as well in residence, and my family, it’s where my family has been since the early 40s,” McCurdy said. “I believe that we haven’t achieved our truest potential in terms of economic development or economic investment, and I believe that we can do a better job in terms of the social infrastructure.”

McCurdy pointed to long-term economic development focused on highlighting the district’s culture and ethnic diversity, expanding workforce development in order to help the area’s homeless population on their path to self-sufficiency, and improving resources for seniors in the region as some of his major goals if he’s elected.

While the pandemic has not changed those goals for him, he says it has changed his timeline, as his short-term focus is on providing his constituents with resources to help with the health and economic impacts of the virus. He says that his experience in the Legislature during the first several months of this crisis will position him perfectly to do this.

“My legislative experience will help me to be able to perform and be ready to go, day one,” he said. “COVID has greatly altered the way that I would have been going in, but having an ability to deal with that at a legislative level, work really closely with lawmakers who are helping us get the resources that we need from the federal level, will perfectly position me to be the greatest advocate that I can.”

McCurdy reported more than $88,000 in contributions in the second quarter of the year, including a $10,000 donation from the campaign of District A incumbent Naft.

Naft isn’t the only commission incumbent to show financial support for the assemblyman, who also received a $5,000 donation from District F incumbent Jones. McCurdy also received a $10,000 donation from the Southern Nevada Stronger PAC, which lists Jones as its main contact. The campaign also reported donations in the second quarter from Eva Segerblom and Carl Segerblom, two children of District E incumbent Tick Segerblom.

McCurdy’s campaign has spent $80,714 during this same period on office expenses, consulting and advertising fees, and special event costs. More than $10,000 in expenses were reported by the campaign for Consili, Inc., the same agency utilized by both Miller and Naft.

While Thorns and Stanley Washington have reported no contributions, spending, or cash on hand in either of the year’s first two quarters, David Washington has had a more financially active campaign.

Washington reported $6,915 in donations to the campaign last quarter and spent $6,751 in the same period. The majority of his spending went towards advertising expenses and a special event held in June at Chili’s Grill and Bar in Las Vegas. The candidate’s campaign reported a cash on hand balance of $11,841 at the end of June.

Clark County Commission candidate David Washington.

David Washington is a member of the Clark County Economic Opportunity Board, which administers Economic Opportunity Act funding to create programs and provide resources with the goal of helping low-income families achieve self-sufficiency. In an email to The Nevada Independent, David Washington said he is running for the position because of his experience in public safety as a fire chief.

“I have 29 years experience in a leadership role where I was responsible for budgets and staff supervision. Eight years, I served at the senior staff level. My last six years, I served as fire chief for the City of Las Vegas with a $100 million dollar budget,” Washington said. 

He also cited his time on the Governor’s Commission on Homeland Security. The fire chief of each county in the state with a population above 100,000 has a seat on the commission, and Washington fulfilled that role during his time with the department.

If elected to the commission, Washington says, he would attempt to help the county recover economically by continuing policies such as the county’s decision to suspend labor contracts in April, a decision that Washington praised. When asked about his budget priorities, he referred to public safety as a “big expense to any government agency” but said he would need to review all department’s budgets before deciding what to preserve and what to cut.

While McCurdy said he didn’t feel comfortable citing specific budget priorities, his views on how to better position the county to be more resilient in the future focus less on economics and more on social services. The candidate referenced better equipping food distribution sites as well as expanding programs to help those in danger of and struggling with homelessness as essential to creating a more resilient region.

“There were some people who were already one paycheck shy of losing it all,” the Democratic candidate said. “So, what kind of services can we provide him and what kind of emergency funds do we have put up that we can work with our community stakeholders and partners to capture those folks before they lose their home?”

The District D seat is held by the commission’s vice chairman, Lawrence Weekly, who has reached his term limit this year. It is the only district with a contested seat this cycle with a Democratic majority, with Democrats making up 50 percent of active registered voters while nonpartisans come in second with 25 percent and Republicans trail at 13 percent.

Neither Henry Thorns nor Stanley Washington responded to attempts to reach them for interviews for this story.

District A

In District A in the south of the county, incumbent Michael Naft is defending his seat against Republican challenger Michael Thomas, spending more than any other candidate for the board in an effort to preserve what he calls his role as his “neighbor’s representative.”

“I believe it is my responsibility to help make Clark County more accessible and user-friendly, and have been devoted to providing the services people need,” Naft said in an email to The Nevada Independent.

Clark County Commission candidate Michael Naft.

Naft, who was appointed to his seat in 2019 by Gov. Steve Sisolak, faced one opponent in the Democratic primary whom he defeated, garnering 74 percent of the vote. Democrats make up 39 percent of active registered voters in his district while Republicans make up 31 percent and nonpartisans account for 25 percent.

Naft has been spending heavily throughout his campaign, reporting more than $343,000 in expenses since January, including more than $194,000 in quarter two alone. His spending has been on a variety of things such as events at local businesses, consulting fees with multiple campaign strategy agencies both local and national, and contributions to other Democratic campaigns, including District D candidate William McCurdy.

Naft also saw many large donations during the second quarter, reporting $107,000 in contributions, the most of any commission candidate. He’s received major donations from NV Energy, the Las Vegas Metro Chamber of Commerce, the Henderson Chamber of Commerce and the Nevada Service Employees Union.

The incumbent has also been endorsed by the Culinary Union, the Las Vegas Police Protective Association and the Nevada Conservation League, among others. His reported cash on hand balance is $754,279.

Naft says that serving on the commission during the COVID-19 pandemic has changed “everything” about his priorities for the county.

“I have responded to this health crisis with a two-pronged approach … We have focused on managing health and wellness as a means to mitigate the economic impact,” he said. “I have advocated for utilizing a portion of our federal allocation of CARES Act dollars to help our local small business community.  By awarding grants to local businesses we have been able to support the people they employ and the businesses they work with.”

Naft’s opponent, Michael Thomas, a retired police officer, has reported no contributions, spending, or cash on hand in either quarter this year. Thomas ran for the District A seat against then-incumbent Sisolak in 2016 as well, receiving 43 percent of the vote.

Thomas did not respond to requests for an interview for this story.

District B

Democratic Commission Chair Marilyn Kirkpatrick is running a re-election campaign in northern Clark County’s District B against two opponents, Independent Warren Markowitz and Republican Kevin Williams.

Kirkpatrick has served on the commission since 2015 and was voted in as chair in 2019. Although the short-term needs of the county have changed in the past several months, Kirkpatrick says the pandemic has not changed her long-term priorities for the region.

Clark County Commission candidate Marilyn Kirkpatrick.

“We have to continue to move forward … There [are] some things that I might have to push aside for a little bit,” she said. “I wouldn’t say that it has impacted our priorities. More so, probably, highlighted the need for the priority.”

Kirkpatrick was the only candidate for the seat to report contributions and spending during the first two quarters of the year. She has held the seat since 2015 and previously served as a Nevada assemblywoman. She has received major endorsements from Nevada state AFL-CIO, the Culinary Union, and the Las Vegas Police Protective Association, among others.

The chair listed public safety and the police department as one of her top two priorities when it comes to funding in the county. Her second major priority, she says, is social services, including programs addressing homelessness and truancy that she has spearheaded during her time on the board. The county provides social services throughout the region, for every city in the county in addition to unincorporated areas.

“We also have a huge responsibility to ensure social services needs are met,” she said. “And we are really the safety net for many, many constituents out there, regardless of what entity they live in.”

During quarter two, Kirkpatrick reported $31,850 in contributions including a $1,500 donation from the Las Vegas Chamber of Commerce. 

The candidate also received $30,000 in the first two quarters from six companies that are all registered with the same Republic Services address in Las Vegas. The waste management company has a franchise agreement with the county and with the City of Las Vegas and operates the region’s landfill.

Kirkpatrick said that she does not think any companies have “tried” to give over the contribution limit and that the Republic Services contract with the county was in place “long before” she started on the commission. The company’s current agreement with the county was put in place in 1999 and extends through 2035.

“I don’t look at my campaign contributions, and, in that respect, it doesn’t get anybody any more than my constituents,” she said.

The chair has spent more than $78,000 this quarter on a variety of expenses related to special events, office supplies and consulting. She reported nearly $16,000 in expenses paid to Accretive Consulting, a firm based in Las Vegas and owned by Kami Dempsey-Goudie. Her cash on hand balance at the end of June was $289,520.

Similar to District A, Democrats make up a plurality but not a majority of voters in District B. Active registered voters in the region are 40 percent Democrat, 31 percent Republican and 23 percent nonpartisan. Additionally, 4 percent of voters in the district are registered with the Independent American Party.

Markowitz, a member of the Independent American Party, is a Las Vegas attorney and founder of the Markowitz Law Firm. The candidate says that he’s running to “return the county and it’s government back to the electorate without playing favorites.”

Clark County Commission candidate Warren Ross Markowitz.

One of the candidate’s major priorities is reopening the county, both by allowing businesses to resume operations at full capacity and opening schools in the Clark County School District, which are currently employing an online learning model.

“I would advance the concept of reversing the quarantine of the healthy, to that of the sick by moving to open businesses to their full capacity, removing feel good ideas that have little or no benefit, and getting schools back open,” he said in an email to The Nevada Independent.

The commission has oversight of business operations and can set stricter standards than the state but has to abide by minimum statewide standards that set capacity limits. The board also does not make decisions about school policies in the region; those decisions are made by the board of trustees.

Markowitz has run for a variety of seats in the past, including unsuccessful campaigns for state Senate, state controller, Clark County School Board trustee and the District B seat on the commission in 2012.

Republican candidate Williams, the facility director for Boyd Gaming, also ran for the seat against Kirkpatrick in 2016, receiving 42 percent of the vote. While he didn’t report any contributions or spending during the first two quarters of the year, his quarter three report shows $250 in contributions and $34 in expenses, leaving the candidate with a cash on hand balance of $148 at the end of September.

Williams did not respond to requests for interviews for this story.

This story was updated on October 14, 2020, at 12:05 p.m. to include comments from District B candidate Warren Ross Markowitz.

Law and profits: Marijuana industry flush with lawyers, in spite of Bar’s warnings

Woman holding money at dispensary

There are scores of standout names among the well over 1,000 owners and officers of marijuana businesses that have sought or won licenses in Nevada.

There are former high-ranking state lawmakers, philanthropists who sit on the boards of prominent charities and real estate developers who have left their fingerprints on casinos and shopping plazas throughout the state. There are well-known lawyers and judges and former law enforcement officers.

The mix reflects the high bar that Nevada officials set for entering a heavily regulated market for a substance that still remains illegal on the federal level. Among other things, business entities seeking a medical marijuana license in 2014 were required to have at least $250,000 in liquid assets and enough resources to cover a year of operations.

Below are some of the more recognizable lawyers and community pillars who are, or have been, involved in the state’s marijuana business. Look out for coming installments of “The Cannabis Files” for more notable names from The Nevada Independent’s ownership analysis.

Mynt dispensary in Reno

Mynt dispensary in Reno is seen on Nov. 9, 2019. Photo by Mark Hernandez.

LAWYERS

State records show that at least 60 people who are owners or board members of marijuana companies that sought licenses in Nevada are lawyers. That’s not counting the many lawyers who do not have a personal stake in the business but serve cannabis clients, including in the numerous lawsuits swirling over the latest state dispensary licensing round.

It’s indicative of the complexity of running a marijuana business.

“The marijuana industry, more than nearly any other industry, requires thoughtful and strict compliance,” explained Bob Groesbeck, an attorney and co-owner of the Planet 13 Dispensary who formerly served as mayor of Henderson. “Attorneys have, by necessity, been involved [in] every step of the process.”

But the widespread involvement of attorneys wasn’t — and still isn’t — clear-cut, considering marijuana remains illegal at the federal level. After Nevada lawmakers authorized medical marijuana dispensaries in 2013, lawyers wondered whether conduct even distantly related to cannabis might run afoul of Nevada lawyers’ Rule of Professional Conduct 1.2, which prohibits assisting a client in conduct that violates the law.

The federal-state conflict raised questions among local government attorneys about whether advising on sprinkler safety requirements in grow houses or the distance between a fire hydrant and a dispensary might be considered abetting actions that are federally illegal. Then-Las Vegas City Councilman Bob Coffin told the Nevada Supreme Court in 2014 that some local governments were going without legal counsel or hiring out-of-state lawyers because of the ethical ambiguity.

"I hope you will approve or modify this, that I may have legal counsel as a representative of the public," Coffin told the court, according to The Associated Press.

In May 2014, the Nevada Supreme Court adopted a policy of allowing lawyers to advise clients on marijuana issues if the conduct was legal under state law. 

But advising a marijuana client is one thing; owning part of a marijuana business is another. That conflict came to the fore in 2016, when the state Bar asked the Nevada Supreme Court to adopt new language saying that participating personally in the marijuana industry “may result in federal prosecution and trigger discipline proceedings under SCR 111.”

Some owner-lawyers told the Las Vegas Sun they feared that the state would force all attorneys to either give up their law license or divest of their ownership in the marijuana industry, selling their stake potentially below market value. They also expressed frustration that the issue had not been resolved years earlier, before some got involved in the cannabis business in the first place.

The Nevada Dispensary Association urged a softer approach, arguing that “ownership in a [medical marijuana enterprise] does not ‘reflect upon the attorney’s honesty, trustworthiness, or fitness to practice law.’” Lawyer Eva Segerblom argued the policy would “be a direct interference with one’s right to earn a living.” Groesbeck, who wrote that he was proud of both his work as a lawyer and someone helping sick people access marijuana, asked the court to reject “draconian” rules on the matter.

“I do not believe I should be forced to throw away a law license that I have held and honored for over a quarter century simply because I have chosen to operate under a privileged license issued by the state,” he said.

In an order dated Feb. 10, 2017, the Nevada Supreme Court updated its Rules of Professional Conduct with the language, in spite of two justices suggesting wording that would offer more qualifications on the possibility of discipline.

“Because use, possession, and distribution of marijuana in any form still violates federal law, attorneys are advised that engaging in such conduct may result in federal prosecution and trigger discipline proceedings under SCR 111,” the current rule says. 

But the warning doesn’t appear to have triggered the disciplinary crackdown some feared, and many lawyers are upfront about their participation as owners in the industry, affirming the value that attorneys provide to the business.

Others have a less positive view of lawyer involvement. Steve Pacitti, an owner with Medical Cannabis Healing LLC, said his background is in working with businesses to ensure they have a viable corporate structure.

He thinks many attorneys who don’t have a corporate law background have migrated to the cannabis space because they see it as more lucrative and may be giving out bad advice that could lead to troubles down the road.

“The majority of lawyers got into the space opportunistically,” he said. “Because of poor structure and oversight, in addition to the incredibly poor and unrealistic statutory and regulatory framework around the industry, I anticipate a tremendous amount of litigation within many marijuana companies as investors find they are not being fairly treated by the operators.”

Here are some of the many lawyers who have applied for a license or have an ownership interest in a marijuana business:

Edward Bernstein, an owner with Silver State Wellness LLC and Paradise Wellness Center LLC, is a prominent Las Vegas-based attorney, philanthropist and television host known for his tagline “Enough Said, Call Ed.”

Several marijuana company owners are judges. James Bixler is an owner with Southern Nevada Growers Inc. who served as a judge in Las Vegas Justice Court and the Eighth Judicial District Court since 1980. While he retired in 2015, he became a senior judge who still presides over some cases. 

Neil Beller is a former owner with NCMM LLC, a cultivation company that unsuccessfully sought a retail dispensary license last year. He is a board member of New Horizons School, and is active at the synagogue Temple Ner Tamid, according to his website. He has also been a deputy district attorney and an alternate municipal judge.

Among the other lawyers are Michael Cristalli, a board member of Qualcan LLC. A lawyer with Gentile, Cristalli, Miller, Armeni, Savarese PLLC, his firm plays a prominent role in a case challenging the Nevada Department of Taxation’s distribution of 61 dispensary licenses issued in December 2018. The legal fight is still ongoing.

Then there’s Pacitti, an owner at Medical Cannabis Healing LLC and a Las Vegas lawyer. He specializes in negotiating and preparing trademark, copyright and rights of publicity licensing agreements for high-profile clients such as Shaquille O’Neal, Hulk Hogan and Andre Agassi. He negotiates celebrity appearances for various nightclubs and was instrumental in finalizing agreements with Mariah Carey, Nick Lachey, and others. He also represents world champion boxers. 

Parking space marked for Thrive Dispensary

A parking space outside the future Thrive Dispensary in Reno on Sept. 27, 2019. Photo by David Calvert.

COMMUNITY PILLARS

A reputable name was an important piece of winning approval before local government boards, and helped add legitimacy to an industry that was just emerging from the shadows. 

In 2014, applicants were asked to share with the state previous experience they had working in nonprofits or businesses, as well as past community involvement and a resume listing educational achievements. And they were evaluated on the amount of taxes or financial contributions the owners and board members made to the state over the last five years.

It was a system that favored wealthy and well-connected members of the community, although some of the “old guard” have stepped back from key roles in their companies and passed on responsibility to marijuana industry experts seeking to create multi-state, publicly traded chains.

Among the marijuana owners who are heavily involved in nonprofits in the community are:

Robert Ellis, who was previously an owner at Tryke Companies and is now a board member at Gravitas Henderson. Ellis owns R&S Investment Properties and is a prominent philanthropist who has been known to donate $200,000 in Christmas gifts to Southern Nevada children in a single holiday season. He and his wife have an elementary school in Henderson named in their honor, and were named “Distinguished Nevadans” by the NSHE Board of Regents in 2015.

Peter Guzman, a real estate broker and president of the Las Vegas Latin Chamber of Commerce, is a board member with Deep Root Medical LLC. Guzman said that because he knew who was leading the group — Gary Primm, who has an extensive background in the gaming industry — he didn’t have hesitation about getting into the marijuana industry.

Guzman is not the only member of the group to have ties to the industry — former Latin Chamber President Otto Merida is an owner at Nevada Holistic Medicine LLC. 

Norberto Madrigal, a vice president of the Latin Chamber affiliated with Lunas, a family-owned construction cleanup company, is an owner with Herbal Choice Inc.

Other philanthropists round out the ranks of marijuana owners. Phillip Peckman, CEO of Peckman Capital Corporation, is an owner with Thrive Cannabis Marketplace. He’s been on the board of the Council for a Better Nevada, a group of community leaders that advocates on education and other policy issues, and is a supporter of The Smith Center for the Performing Arts.

Julie Murray, who is also an owner at Thrive, is the head of philanthropy consulting firm Moonridge Group, and helped found the Las Vegas-based Three Square Food Bank.

Jody Ghanem, an owner at Wellness Connection of Nevada LLC, previously owned Radio City Pizza in downtown Las Vegas and is the development director at the Cleveland Clinic’s Lou Ruvo Center for Brain Health in downtown Las Vegas. She is a former Rockette and came to Las Vegas in 1979 after being hired by Liberace. She was previously an advisory board member at The Smith Center for the Performing Arts.

Her late husband, Dr. Elias Ghanem, was known as a doctor to the stars including Elvis Presley and was chairman of the Nevada State Athletic Commission, where he played a role in revoking Mike Tyson’s license to box after he bit Evander Holyfield’s ear.

Look out for the next installment of “The Cannabis Files” — a look at the politicians, gaming executives and developers involved in the industry. If you missed the kickoff, check out “Growing Pains,” an overview of the issues that have put Nevada’s cannabis industry at a crossroads.

Jodie Snyder, Riley Snyder, Michaela Chesin, Taylor Avery, Trey Arline and Zach Murray contributed research to this project.

Developers, trial lawyers face off over bill revising construction defect law changes made in 2015

A backhoe on a cleared lot

Usually, an in-depth discussion on the characteristics of expansive clay soil wouldn’t draw much attention outside of an engineering classroom or a construction site.

But on Tuesday, dozens of lobbyists and representatives from two of the most powerful industries in the state crowded committee rooms in Carson City and Las Vegas to hear that presentation amid an emotional hearing on a long-running point of contention: construction defect lawsuits.

The actual subject of the hearing was AB421, a bill heard by the Assembly Judiciary Committee that would reverse many of the substantive changes Republican lawmakers made in 2015 on lawsuits related to construction defect claims, a move derided by Democrats but lauded by Republicans including Gov. Brian Sandoval and developers as necessary to stem the growing tide of alleged “frivolous” lawsuits on residential construction defects.

Since the 2015 law was passed, the number of construction defect lawsuits has dwindled significantly — declining by nearly 90 percent from the 2014 peak, according to a study by Applied Analysis, with only 20 defect lawsuits filed statewide last year.

But newly won Democratic control of the governor’s office and both legislative chambers has both sides geared up again for a fight over the section of state law allowing homeowners to sue builders and contractors for shoddy or dangerous residential construction practices.

The hearing also brought into stark relief the bitter conflict between two of the state’s most powerful industries: trial attorneys and developers/real estate companies. Both were top campaign contributors during the 2018 election cycle; real estate companies and developers contributed more than $997,000 to legislators, while law firms and individual lawyers contributed $630,000 to lawmakers during the election cycle. The issue has spilled out of the Legislature; the Builder’s Association has run ads opposing the bill on social media, and Republican Sen. Ira Hansen — the sponsor of the 2015 bill — has placed ads on Facebook opposing the bill.

The measure doesn’t entirely replace the 2015 law, but reverses many of its primary provisions.

Notably, it would extend from six to 10 years the period after home construction in which a construction defect lawsuit can be brought and indefinitely if the defect is caused by fraudulent or willful misconduct. Prior to 2015, Nevada had a “complex” system for bringing construction defect cases, typically between six to 10 years after the home was built depending on whether defects were patent or latent, known to the contractor or caused by willful misconduct, with time added on if the defects were discovered in the last possible year a claim could be brought.

But the 2015 bill instituted the universal six-year time period in which to bring construction defect claims once the home is “substantially” completed. Although most defect claims relate to more obvious issues with a home — wrongly fitted doors or windows, issues with lights or plumbing — Tom Marsh, a civil and geotechnical engineer, gave lawmakers several examples of how the clay soil composition on which most homes in the state are built spelled the possibility of major foundational issues with home construction that wouldn’t be apparent until eight to 10 years after the home was built.

“It really takes time for these things to manifest,” he said.

The bill also amends the definition of a construction defect beyond something that “presents an unreasonable risk of injury to a person or property” to include any defect done in violation of local law or ordinances.  Attorney Ardea Canepa-Rotoli, a member of the Nevada Justice Association (the trial lawyers’ lobbying arm), told lawmakers that limitation meant a clearly dangerous defect or issue in a house would not be grounds for a civil construction defect lawsuit under the current law.

“Until or if that electrical code violation results in a fire, harming a person or property, it may not be considered to be a defect,” she said. “That’s just morally repugnant and just doesn't make sense."

The bill also removes certain pre-litigation requirements for homeowners, including a requirement that the homeowner be present when obtaining an expert opinion on the alleged defect, and a requirement for homeowners to first exhaust all warranties and limiting defect lawsuits to alleged defects denied by an insurer. It also removes prohibitions on homeowners associations to institute or to defend a defect lawsuit.

It also would remove limitations on recovery in lawsuits to only constructional defects proven by the claimant and allow for recovery of “reasonable” attorney’s fees. Canepa-Rotoli said many construction defect lawsuits were argued by attorneys working contingent fee contracts, as many homeowners cannot afford hourly rates for an attorney, so allowing recovery of those fees would allow more individuals to access the legal system.

Eva Segerblom, a trial attorney and member of the Nevada Justice Association, told lawmakers that the dwindling number of defect lawsuits was not because of higher construction standards but because the 2015 law made it nearly impossible to bring such a lawsuit.

“Unfortunately, this is not because all the homes in Nevada are being built without defects, but it is because the changes in the law have made it virtually impossible for homeowners to have a remedy,” she said. “The fact of the matter is that the current law puts all of the risk on the homeowner purchasing it.”

But a wide variety of lobbyists and representatives of the construction and real estate industry said that dwindling number was proof that pre-litigation dispute resolution processes were working, while helping keep down insurance and construction costs in a period of high demand for affordable housing.

Opponents pointed out that between 2000 and 2012, construction defect lawsuits in Nevada increased by more than 355 percent while home sales dropped by 86 percent, with a UNLV study finding homeowners in the state were 38 times more likely to be involved in such a lawsuit than the national average.

David Goldwater, a lobbyist for the homebuilding industry, said that the current construction defect system was set up to give homeowners as many opportunities as possible to quickly resolve issues with their home before going to court.

“I wish there was a bill you could vote for to force all builders to build the perfect house,” he told lawmakers. “I promise I’d work day and night to get that passed. The truth is, houses are not built perfectly, and when they are not, the home buyer needs fast and effective remedies. No one who buys a house wants a check from protracted litigation that lasts several years and drains them of time and resources.”

A study by Applied Analysis on behalf of the homebuilders found that the industry-wide cost to settle construction defect claims fell from an average of $32.1 million between 2010 and 2015 to just $3.8 million between 2016 and 2018. The study also estimated that costs fostered on all home sales as part of insurance and settlement costs related to construction defect lawsuits had fallen from an average of $5,000 to about $360, which advocates said allowed thousands of homeowners on the margins to access housing that they otherwise would be priced out of.

At the hearing, subcontractors, real estate agents and developers testified that approval of the bill would result in higher insurance rates and tougher barriers for housing development. Jesse Haw, a Reno-based contractor (and former state senator), told lawmakers that he and his brother’s company built their first residential subdivision in more than 14 years in 2016, which he credited to the 2015 changes in defect law. He warned that reversal of those changes would hurt smaller builders such as him the most.

“I’m here to tell you that private builders will be impacted the most,” Haw said. “My stock price doesn’t go down when I get sued; I simply go out of business.”

Updated at 9:50 a.m. to correct the name of the individual testifying on behalf of the bill.