Concerned about potential financial liability, Lyon County commissioners have rejected a precursor in the possible formation of a special-assessment district for the Legado Development in Dayton.
The commissioners turned down a proposal to hire an engineering firm and an appraisal firm to assist in the creation of the special assessment district.
Developer Ed Johanson, of Lakemont Homes, one of the partners in the project, said his company would pay for the engineering and appraisal studies, and that hiring the engineer and the appraiser did not require the county to form the district.
The engineering work would be done by Poggemeyer Design Group at a cost of $90,630, and the appraisal would be done by John Wright and Associates for $10,000.
The action was the first step in the special-assessment process previously approved by the commissioners. The commissioners hire the appraisal and engineering firms, but the cost would be borne by the developer. Decisions on the amount of an assessment would have been made later had this been approved.
But Commissioner Bob Milz was concerned about the possibility of taxpayers being stuck with the bill if Legado ran into financial difficulty.
"You picked this up in a bankruptcy, and the county didn't get what was promised the first time around," he told Johnson. "If that happens again, the taxpayer will have to pick up the tab for what you don't do."
But Johanson said his company and partner Wade Development have spent more than $40 million in bonds on infrastructure and not earned a dollar of profit yet.
"We created 3,000 to 4,000 jobs, and we are very legitimate," he said. "We are long-road folks. We stay with our projects all the way to the end."
He said those bonds would be exclusively on future homes, not existing ones.
"We pay a higher interest rate on these bonds," he said. "It's not backed by the taxpayers."
Commissioners LeRoy Goodman and Larry McPherson voted in favor of hiring the engineer and appraiser, while Milz, Chairman Phyllis Hunewill and Don Tibbals voted against it.
Johanson said he would meet with county staff and the commissioners again to try to resolve differences in the proposal.
• Contact reporter Karen Woodmansee at kwoodmansee@nevadaappeal.com or 882-2111, ext. 351.