Las Vegas Reduces Capital Project Budget by $20 Million

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Las Vegas skyline reflecting ongoing construction delays due to budget reductions.

News Summary

Las Vegas will cut its capital project budget by nearly $20 million to fund a $286 million settlement with the owner of the former Badlands golf course. This decision comes after legal battles regarding denied development rights for housing projects. To address mounting liabilities, the city aims to settle rather than continue lengthy litigation. Significant delays in municipal infrastructure investments are anticipated, as funds are diverted for legal obligations, amid projections of future budget deficits.

Las Vegas will reduce its capital project budget by nearly $20 million to help pay a $286 million settlement with the owner of the now-defunct Badlands golf course. This decision comes after a series of legal battles where the city was accused of wrongly denying development rights for a housing project due to local opposition. The city has faced mounting liabilities from the case, resulting in a strategy to settle rather than continue prolonged litigation.

The city plans to focus on the settlement’s urgency prompted by Mayor Shelley Berkley’s priorities following her election in 2024. Despite the budget shortfall, Las Vegas intends to keep moving forward, and projects will be delayed rather than scrapped entirely. The settlement amount is a part of a larger total liability of $636 million that the city is compelled to address, with the remaining payment due by July 1, 2026.

The decision to delay capital improvement projects was announced as the city emerges from extensive court defeats with the developer EHB Cos. To date, Las Vegas has paid approximately $250 million towards the overall settlement, with expectations to cover the rest using general fund reserves, delayed capital projects, and proceeds from the sale of the Cashman Center.

Allocation of Delay Funds

The funds diverted from various projects amount to about $19.7 million and include significant postponed investments in municipal infrastructure. Noteworthy deductions from the capital projects budget include:

$8.6 million from a future jail expansion
$3.5 million from expansion and improvements at Woodlawn Cemetery
$1.13 million for a downtown beautification initiative
$1 million for updates at Huntridge Circle Park
$900,000 earmarked for beautification of alleyways
$820,000 from creating a new park in the Las Vegas Medical District
$500,000 each from housing, public facilities, and education programs
$500,000 from a Public Art Master Plan
$500,000 for field renovations at Viper Lacrosse Fields
$400,000 for signage enhancements in the Las Vegas Medical District
$350,000 for an animal shelter expansion feasibility study
$300,000 designated for an amphitheater study in northwest Las Vegas
$300,000 allocated for digitizing jail inmate files
$300,000 for upgrades to the Joint Information Center
$234,000 for modernizing park signage
$215,000 from a Smart Cities initiative aimed at autonomous vehicle integration
$142,000 for painting and fencing improvements

Background and Long-term Implications

The legal conflict with EHB Cos began after the city denied zoning approvals necessary for the intended housing development. Facing repeated legal setbacks, city officials recognized the financial risks associated with further litigation, influencing the decision to enter negotiations for a settlement.

This settlement also anticipates a potential $110 million deficit in the general fund by 2026. As Las Vegas deliberates on future budgets, city leaders must balance ongoing fiscal responsibilities with the pressure to fulfill financial settlements. By securing $25 million in room tax revenue for parks and $40 million in consolidated taxes, the city has aimed to soften the impact on other necessary projects.

Ultimately, while the reduction in capital projects may slow some development, Las Vegas is positioning itself to address its legal obligations effectively, providing a clearer financial pathway for the future.