When Henderson city officials chased developer Chris Milam out of town a few months ago, there was still a chance that his proposed sports arena complex would get built.
Federal officials on Friday pulled the plug on a possible attempt by his lenders to acquire the 485-acre site near the M Resort where Milam planned to build an indoor arena and three stadiums.
The land is owned by the U.S. Bureau of Land Management, and Milam’s group had been in escrow for months to buy it for his Las Vegas National Sports Complex. His lenders, as allowed under a court settlement with the city, had until May 13 to take ownership of the property.
However, newly installed Interior Secretary Sally Jewell’s office canceled the sale and took back full control of the Henderson land, federal officials confirmed. The BLM is part of the Interior Department.
The BLM initially accepted Milam’s offer last June — made through his Silver State Land LLC — to buy the site for about $10.5 million. But since then, the city of Henderson sued him for fraud in connection with the arena project and, as part of a legal settlement, barred him from doing future business in the city.
“We are taking this action because circumstances have changed significantly since the BLM accepted Silver State’s purchase offer,” BLM spokeswoman Celia Boddington said in an email Friday.
The move could end a nearly two-year saga that started with big plans and promises and then spiraled into accusations of fraud and secret deals.
Although Milam claimed to have held extensive talks with pro sports leagues and teams, no one ever committed to moving to his massive, speculative development. Also, sports executives outside Nevada have laughed at his plans.
It’s nearly impossible to finance a speculative arena or stadium, let alone a cluster of them as Milam envisioned. What’s more, the project’s main financier reportedly was a Chinese surveillance-equipment maker, not a well-known stadium construction lender such as Goldman Sachs or Bank of America. China Security and Surveillance Technology initially agreed to back a speculative project, but later decided not to finance the deal without a tenant.
Lenders who planned to finance the land purchase essentially took over the project after City Hall gave Milam the boot in March. Operating under the names Rockafellow Investments LLC and II C.B. LLC, they paid Henderson City Hall $250,000 to keep the project alive and reimburse the city for legal costs.
They would have had to pay the city another $4.25 million by Monday to close the land sale.
The project site is zoned for stadium or arena development. City Attorney Josh Reid had indicated that Henderson officials were open to other commercial development there, but he ruled out single-family housing, which Milam allegedly pursued in violation of his development pact with City Hall.
Efforts to identify and reach the people who run his lending entities were not immediately successful Friday.
The Henderson City Council in September 2011 approved an initial project agreement with Milam’s group and voted to support the BLM land sale. But last November, city officials claimed, he paid the balance of the land’s purchase price and backed out of the project that same day. Milam has said he terminated the development agreement because the arena plans were not viable.
Two months later, the city sued Milam, his lawyers John Marchiano and Christopher Stephens, land consultant Michael Ford and public relations-lobbying chief Lee Haney. Instead of following through on their project plans, efforts were made to sell the land piecemeal to residential and commercial developers at a substantial profit, the lawsuit alleged.
According to court documents filed in the case, Milam secretly reached a deal last summer to develop part of the project site as residential homes and later claimed that even if he sold the entire site for $100 million, he would “leave most of the profit on the table.”
Milam, Marchiano and Stephens have settled the accusations against them. As of late March, Ford and Haney had not reached a settlement, but they were expected to try and work things out in private mediation.