Deal struck on defunct Riverwood project
September 20, 2012
A deal has been reached to settle a lawsuit filed against the owners of a defunct redevelopment project in northern Douglas County.
Douglas County District Attorney Mark Jackson said that anyone involved in the Riverwood owners participation agreement will give up any claims under a settlement announced on Thursday.
The agreement between the county’s redevelopment agency and Riverwood Redevelopment was settled with a payment of $650,000.
The original agreement would have paid the company $24.7 million over the course of 16 years. Approved in December 2006, the agreement required the developer to build 30,000 square feet of commercial space and lease 25,000 square feet of it before receiving payment on a 4.6 acre parcel.
The project stalled in December 2008 after work began on the pad following obtaining a grading permit, the only requirement under the agreement for it to continue.
More than 220,000 cubic yards of earth were piled up on the northside of Sunridge before work stopped. The site has been the source of several dust complaints in the years since.
Riverwood neighbor Jerry Vaccaro said the site continued to be a blight and sought answers to who would be responsible for fixing it.
Douglas County commissioners serve as the board of the redevelopment agency, which sued Riverwood on Nov. 1, 2010.
Jackson said the settlement does not include Riverwood Partners, who worked on the project infrastructure, but does include an agreement to toll or pause the lawsuit for a year while the parties continue to negotiate and possibly resolve any claims in the development agreement. The development agreement was approved October 2007.
“We’re not releasing them from the legal action,” Jackson said Thursday. “But for the participation agreement, it is terminated, invalid, unenforceable and the redevelopment agency is dismissing all claims and causes and actions associated with it.”
A meeting is scheduled for 3 p.m. Wednesday at the Douglas County Courthouse. Jackson said both the commissioners sitting as the redevelopment agency and then as the commission will have to agree.
“Our board will be wearing two separate hats, and we have two specific agenda items addressing that.”
In the summer of 2008, the Douglas County grand jury released findings that the county had rushed into the agreement with Riverwood because then-County Manager Dan Holler feared a bidding war with Carson City.
The grand jury concluded that county commissioners were presented with outdated and “overly optimistic” research that did not allow for the current economic slowdown.
“With the downturn in the economy today and a general reduction in tax revenue, the Redevelopment Agency’s financial viability could be in jeopardy,” the jury said. “The grand jury also recommends that Douglas County not enter into future owner participation or similar agreements with any organization that does not agree to release financial statements to the public for the duration of the agreement.”