A federal judge decided Friday not to stop an upcoming auction by the Bureau of Land Management of 144 acres in northern Douglas County, but Carson City's case against the sale will be heard.
U.S. District Judge James Robertson ruled the sale can go forward -- but only if the buyer is informed the transaction could be invalidated if the court finds in favor of Carson's lawsuit.
BLM officials said they will hold the auction at 10 a.m. Wednesday at the Douglas County Administration Building in Minden. The sale price or number of bidders shouldn't be affected by the lawsuit, said spokeswoman Jo Simpson.
"We're very pleased that the court has denied the request for a temporary restraining order," Simpson said. "We believe the public interest is best served by holding a competitive sale to dispose the property into private ownership."
Carson City's legal representative with the Washington, D.C., law firm Latham & Watkins asked the court to issue a temporary order to stop the sale until a lawsuit filed by the city is resolved.
Carson City is suing the U.S. Department of the Interior and the BLM for going forward with the sale, contending that proper economic and environmental studies were not completed as promised. The city is arguing the sale would severely hurt Carson's economy.
Judge Robertson said he will hear Carson's lawsuit and issue a decision by the end of October.
"We feel very pleased because the judge agreed to hear the case," said Carson City Manager Linda Ritter.
Douglas County Commissioner Jacques Etchegoyhen said Friday's decision was a bit disappointing.
"I do think it sounds like a reasonable solution," Etchegoyhen said. "I still wish they would have tossed out the whole case."
Before bidding starts Wednesday, BLM officials will explain the situation and the buyer will have to sign a statement acknowledging an understanding of the issue, Simpson said.
The buyer will pay at least 20 percent down following the auction and will have 180 days to pay the remainder. Bidding will start at $7.5 million, the appraised fair-market value for the land.
Legally, the sale cannot be finalized until a ruling on Carson's lawsuit is issued. If the judge finds in favor of Carson, the buyer's deposit will be refunded and the sale will be vacated, Simpson said.
"We've had the same situation in Las Vegas and it has not had any effect on it," Simpson said.
Carson land investor Dwight Millard of Millard Realty said because of the size of the parcel, the buyers interested in it likely won't be discouraged by the ongoing legal action.
"The people who are interested will go ahead and buy and wait till the decision goes through," Millard said. "People paying that kind of money have staying power. It's not somebody who doesn't have the money."
Meanwhile, until the prime chunk of real estate is sold and off the market, the rest of the commercial market will continued to be skewed, Millard said.
"That's a pretty good size piece of land, it's going to skew a little bit of the commercial development a little until that is absorbed," he said.
The property is at the center of a dispute between Carson and Douglas officials over development of retail businesses, which have been spreading along the Douglas side of the county line to the detriment of Carson City sales-tax revenues. Carson officials say additional development will require additional services and costs which haven't been adequately analyzed.