The city of Henderson sued developer Chris Milam last week, accusing him of promising a pro sports complex if the city could help deliver to him cheap federal land even though all along he was planning to flip the land to residential developers for an easy profit.
The city describes a classic bait-and-switch. Wouldn’t it be cool if you helped me get some land to host an NBA team in Henderson? Oh, never mind, how about I use that land for some tract homes?
Henderson isn’t just taking on Milam, however. The city's lawsuit also targets people who are alleged to have helped him try to pull it off, most notably John F. Marchiano, a well-known development lawyer and lobbyist, who stood to gain hefty fees on the allegedly fraudulent deal.
And that’s what’s really gnawing: at least one city councilman, John Marz, is still seeking Marchiano’s financial assistance in helping him pay for his political campaign, even as the city attorney is suing Marchiano for allegedly trying to help screw the city.
Here’s how the land deal was supposed to play out: The Bureau of Land Management would transfer 485 acres of desert in Henderson to Milam for a bargain $10.5 million once the city had blessed Milam’s plans for the sports complex. The city is now trying to stop the BLM land sale to Milam; a court hearing on the city‘s request for an injunction is set for Tuesday — one day before the sale is scheduled to close.
According to allegations contained in the city’s lawsuit, Marchiano “confessed to the City Manager (Jacob Snow) and the City Attorney (Josh Reid) that Milam had been lying to the City regarding his intentions for the Land and the Project.”
Marchiano’s attorney, Jacob Hafter, called the suit a “frivolous case” and told me Marchiano wasn’t aware of a bait-and-switch.
“He knows no matter what a developer wants to do, you have to get it through the city," Hafter said. "Why do a bait-and-switch when you have to get it through the city?”
Hafter said Marchiano has too many important clients with business before the City Council and wouldn’t jeopardize those relationships for any alleged Milam fraud scheme.
Perhaps. Lawyers often have to represent unseemly clients, and surely it was in Marchiano’s long-term interest to play it straight with the city. So maybe he knew nothing about it and didn’t knowingly help Milam pull off his alleged fraud.
Or, maybe Marchiano was so confident in his place in the city’s unofficial hierarchy — his juice — that he figured everyone would let it slide once it became clear Milam was just another snake-oil salesman.
Twice last week, I heard Marchiano referred to as “Henderson’s Jay Brown,” referring to the friend of Sen. Harry Reid and uber-lobbyist at the Clark County Commission. I couldn’t figure out whether that was supposed to be a compliment or an insult.
How much juice does Marchiano have in Henderson?
Marchiano has been a significant fundraiser for all five members of the City Council.
John Marz, who was appointed to the council last year claiming he would only be a “placeholder” but changed his mind and decided to run for election this year, received a $2,000 contribution from Marchiano one week before Milam delivered his letter to the city saying the arena plan was no longer viable.
Marchiano is what’s known as a bundler — more important than his own money is the money that comes from lobbying clients.
According to Marz’s recent campaign finance disclosure, he raised $124,000, more than half of which came from Marchiano clients, most of it in significant increments: Galaxy Green Valley LLC, $2,500; Cornerstone Partners 1 LLC, $2,500; KB Home Las Vegas, $2,500; Pardee Homes of Nevada, $2,500; R&S Investment Properties, $5,000; Inspirada Builders, $5,000; Jack Binion, $5,000; Union Village, $10,000; Station Casino properties, $25,000.
Marz, who declined to comment on the lawsuit, said he fully expects Marchiano to continue raising money for his campaign, even as the lobbyist is now the defendant in a lawsuit the city has filed against him.
“Is he out soliciting money for me? I would imagine he is,” Marz told me.
And Marchiano continues to lobby Marz. Hafter told me Marchiano was in Marz’s office after the lawsuit was filed, this time on behalf of Vestar Development, the Phoenix company that owns The District at Green Valley Ranch, and Giuseppe’s Bar & Grill. (Both are significant financial contributors to Marz’s election.)
“John Marchiano is still a recognized lobbyist in the city. He and his clients still do business with the city. Do I have a problem with John Marchiano helping me raise money? No. He represents a lot of businesses in the city of Henderson.”
I wonder whether Marz is foolish enough to think that Marchiano is his friend. According to court documents filed by Henderson on Friday, Marchiano was very open about how he operates. In a handwritten note to City Attorney Josh Reid that was an exhibit in the lawsuit, Marchiano wrote: "Josh, I have very few friends. Most of the people I associate with are people who can do things for me; I use them they use me. There is an innate skepticism and hypocrisy in those relationships. I know what a hypocrite I can be."
Mayor Andy Hafen, who is running for re-election, has raised $135,000, according to his most recent report, with similar help from Marchiano and his clients.
This hardly seems like a united front by the city of Henderson. On the one hand, we have Marz receiving campaign cash from Marchiano while on the other hand we have the city attorney accusing Marchiano of helping Milam pull a fast one on the city.
One would think that, just for the sake of appearances, Marz would stop taking campaign money from Marchiano until the matter is settled.
Councilman Sam Bateman acknowledged the difficult spot he and his colleagues are in: “It puts us in an awkward position. He has other clients. And I'm willing to discuss things about other clients. I'm not going to cut him off with other clients. We just have to do it in a professional manner, as best we can, and get through it. Nobody's happy it's come to this,” he said.
Of course, this might have been prevented had the council and the city had the good sense to see the arena plan for what it was all along — a carpetbagger hiring some local juice to sell the rubes a pony that could fly.