Reno City Council members on Wednesday approved a settlement agreement with a housing developer for $3.5 million after the council denied Stan Lucas’ applications for a proposed Mortensen Ranch development multiple times.
During discussions on the settlement, council members expressed concern over the high price tag of the settlement. Council member Jenny Brekhus argued she would want to take the fight back to the courts instead of being “bullied.”
In July 2019, a representative of Stan Lucas submitted applications to the city for a tentative map and special use permit for the development of a 676-lot residential subdivision in Verdi.
In December 2019, the Reno Planning Commission denied the application, and in January 2020, council affirmed the denial.
“This raises big red flags.”
Lucas then filed a petition for judicial review in February 2020, and on Nov. 9, 2020, the court granted Lucas’s petition, and the matter was brought back before the council for reconsideration.
However, council again denied the applications on March 10, 2021. On March 30, 2021, Lucas filed another petition for judicial review which was granted on Dec. 23, 2021, and directed the city to approve the applications.
On Jan. 27, 2022, the city issued a letter adopting the court’s order, approving the applications with conditions in place.
However, on April 12, 2022, Lucas filed a separate damage action in the Second Judicial District Court against the city, stating that the denial of his applications was unlawful, arbitrary and capricious
According to the agenda, Lucas was seeking damages for construction delays, attorney’s fees and litigation costs. On Aug. 14, 2023, representatives of the city and for Lucas attended a confidential mediation, and reached a recommended settlement of $3.5 million, with the provision that the city does not admit liability.
The settlement will be funded from taxpayer monies in the city’s general fund.
Brekhus advocated for the denial of the settlement. Contentions arose in discussions after she repeatedly asked city attorneys to disclose information from the closed mediation sessions, which Assistant City Attorney Jonathan Shipman said could be an open meeting law violation.
“We cannot get into these questions because [mediation] was confidential,” Shipman said.
“Well, this raises big red flags,” Brekhus said.
Council member Devon Reese said that this was a difficult vote for him as he voted against the project twice, but will now support the settlement because he recognizes the city is in a difficult situation to prevail in ongoing litigation.
He said that real damages already outweigh the settlement, such as sewer connection fees that have increased since the first denial of the project, which carries a hard cost of at least $7 million on its own the developer could sue for.
“Do not be wooed by the threat of someone,” Brekhus argued.
Schieve said that while she believes Brekhus is an intelligent person, but she is not an attorney, and the liability is too high to take chances.
“I get where you’re coming from saying don’t be threatened by this, but I think this council has to be very, very aware about what we could face if we don’t [agree to the settlement].”
Brekhus said that while she would support whatever the council chooses, this is the time to “stand up” and let the Reno community know that the council cannot be bullied.
Community members of Verdi, who have staunchly opposed the development since it was first proposed, voiced their concerns both in person and via email regarding the decision to settle.
“Thank you for your willingness to objectively look at the concerns we raised,” said resident Ken McNeil. “We sincerely thank you.”
The settlement was approved with Brekhus voting against.