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How IVGID Acquired the Beaches

IVGID 101 Posted on by

IVGID’s ACQUISITION OF THE BEACHES

Many people think IVGID’s acquisition of the beaches goes back to its creation on May 20, 19611. But that’s not accurate. Between 1960-68 Crystal Bay Development Co.2 (“CBDC”) sold over three thousand (3,000) unimproved lots. Representations were made to each purchaser that Incline Village’s four (4) beaches3 would be a private homeowner amenity available only to purchasers of Incline Village property and their guests. Some type of homeowners’ association [initially the Incline Beach Recreation Corporation (“IBRC”) and later the Incline Village Recreation Association (“IVRA”)] was “formed for the sole purpose of owning, developing and maintaining Incline Village beach propert(ies).”4

Thus the purchaser of a lot or parcel anywhere in Incline Village was purchasing a share in the IBRC and thus became an owner-member whose interest ran with his/her/its land. In other words, IBRC membership could not be transferred separately nor retained after land ownership ceased.4 “The initial purchase…(for a share in the IBRC wa)s $50 (and it was)…assessed…a maximum of $50 per year thereafter, beginning July 1, 1961.”4 But because sales of Incline Village lots were not as brisk as projected, CBDC had to encumber the beaches and thus didn’t have the financial means to transfer them “free and clear” to the IBRC. Not to worry. Since the IVGID Board was in essence CBDC, and bonding had worked so well to divert the infrastructure costs of development to the ultimate purchasers of Incline Village property rather than its developer, the “plan” became IVGID would purchase the beaches from CBDC with the proceeds of a bond issue, and then assess the owners of Incline Village property the servicing costs associated with their repayment.

But when IVGID was created, no general improvement district (“GID”) in the State had the power to furnish facilities for recreation5. This meant CBDC’s principals had to return to the State Legislature to seek expansion of the basic powers a GID could exercise. Welcome Harold B. Tiller who ultimately was successful, again, in lobbying the Nevada State Legislature6 to enact legislation adding public recreation7. Shortly after the State Legislature added public recreation as a new GID basic power (August 12, 1965), the IVGID Board adopted Resolution 279 which asked the Washoe County Board of Commissioners (“County Board”) “to commence proceedings…for the addition of…powers of public recreation.”8 On September 27, 1965 the Washoe County Board adopted Ordinance No. 140 which initiated those proceedings, and on October 25, 1965 the County Board held public hearings “similar, as nearly as may be, to those pro(ceedings) for the formation of the district, and with like effect.”9 And on November 15, 1965 a divided (3-to-2) Washoe County Board amended Ordinance No. 97 via Bill 132 granting IVGID the new basic power to furnish facilities for public recreation.

The only testimony in support of IVGID’s request came from Board member Harold Tiller. Mr. Tiller testified that if the District’s request were granted10:

a) The recreational facilities to be acquired would be “park properties (including the two beaches11 only). “All (other)…recreational facilities…w(ould) be privately owned…operated” and presumably privately financed;

b) The “facilities…to (be)…acquire(d would be)…acquire(d)…as public property (i.e., public to the property owners in the District);”

c) “A bond issue to acquire these facilities” was contemplated; and,

d) Ad valorem “taxes” based upon “the assessed value of IVGID12, together with its expected growth, w(ould be the financing source to) readily finance the acquisition and operation of the two11 beaches.”

Be that as it may, the Washoe County Board’s approval of IVGID’s request and the prior public run up in anticipation of this issue triggered a number of lawsuits involving the Washoe County Board, IVGID, CBDC, IVBC, and a number of prejudiced Incline Village parcel owners13 The writing was on the wall that local property owners were about to lose their private beaches contrary to what had been represented to them prior to their purchases14. But like so many court cases which are filed, these ones never saw the light of trial. Here they were consolidated and resulted in a comprehensive global settlement. That settlement was filed with the court on April 11, 1968, as was the judgment entered pursuant thereto15. The settlement provided, in part, that:

a) The IVRA would be dissolved;

b) Local property owners’ obligation to pay an annual $50 fee to IVRA would expire;

c) CBDC’s four (4) beaches would be sold to IVGID for $2.1 million16;

d) To finance that purchase, pay all expenses associated with bond issuance, pay the first year’s worth of debt servicing, and to create a sufficient reserve fund, IVGID would issue and sell $2.685 million of Revenue Bonds17;

e) For the period July 1, 1968-June 30, 1979 the following annual NRS 318.197(1) rates, tolls and charges would apply18: $50 for each developed single family lot, $50 for each developed multiple unit lot, $25 for each developed hotel/motel room19, from $1-$15 per acre for each undeveloped single family parcel, and from $5-$200 per acre for each undeveloped multiple family parcel;

f) The parties would use their best efforts to fulfill each and every commitment expressed in a March 7, 1968 letter to Incline Village property owners20 which was attached to and incorporated into the settlement agreement; and,

g) The various lawsuits would be dismissed with prejudice.

With no further obstacle to IVGID’s acquisition of the beaches, on May 9, 1968 the IVGID Board adopted Resolution 485 approving entry into a May 20, 1968 agreement to purchase Incline and Burnt Cedar beaches from CBDC. On June 3, 1968 the IVGID Board adopted Resolution 493 approving “the form of the Deed relating to the transfer of the Incline and Burnt Cedar Beaches11 unto the District,” and on June 4, 1968 IVGID acquired the beaches “only for the purposes of recreation by, and for the benefit of, property owners and their guests (specifically including occupants of hotels and motels19) within the boundaries of the Incline Village General Improvement District as (then) constituted, and, as the Board of Trustees of the District may determine, the guests of such property owners,”21 and subject, in part, to “an easement…for the benefit of all other owners of property located within said boundaries, and their respective successors and assigns in such ownership…to enter upon (the deeded beaches) and to use said property for the recreational uses and purposes specified (t)herein.”22

  1. See Ordinance 97, Bill 57.
  2. Remember, CBDC acquired all 9,000 acres destined to become Incline Village on June 1, 1960.
  3. Incline, Ski, Hermit and Burnt Cedar.
  4. See CBDC’s 1961 “Community Beaches” document. This document was given to all prospective purchasers of Incline Village property as part of the former’s sales materials.
  5. The power to furnish facilities for public recreation [see NRS 318.116(14)] “as provided in NRS 318.143” expressly instructs that “such recreational facilities may include without limitation…beaches, marinas, levees, piers, docks, wharves, boat basins, boathouses, harborages, (and) anchorages.”
  6. The principals of CBDC were successful because they and their colleagues who were committed to common interests packed the IVGID Board. Additionally, they had friends in high places. One of those principals was attorney Robert McDonald; a partner in the firm of Bible, McDonald, Carano and Wilson of Reno, NV. “Bob McDonald and former United States Senator Alan Bible created the firm in 1949. Prior to launching the firm, Senator Bible served as the Attorney General for the State of Nevada, with Mr. McDonald acting as his Deputy Attorney General” (see https://www.mcdonaldcarano.com/news/nevada-law-firm-mcdonald-carano-celebrates-70-years/). Is it any wonder then that they were intimately acquainted with legislators?
  7. Although the word “public” was deleted from former NRS 318.143 (see SB297, Chapter 413, section 21.5, page 1088, 1965 Statutes of Nevada) and restated as “recreation” at NRS 318.116(13) [during the fifty-fourth (54th) 1967 Session of the Legislature (see SB408, Chapter 542, sections 23 and 24, page 1693, 1967 Statutes of Nevada)], no retroactive intent was expressed [Sandpointe Apts. v. Eighth Judicial Dist. Court, 129 Nev. Adv. Op. 87, 313 P.3d 849 (2013). For this reason, intentionally or as an unintended consequence, furnishing facilities for non-public recreation became a new, possible basic power for GIDs. But since the Washoe County Board of Commissioners (“County Board”) never granted the District this new basic power, as required by NRS 318.077 (although “the board may elect to add basic powers not provided in its formation, (it)…shall cause proceedings to be had by the board of county commissioners similar, as nearly as may be, to those provided for the formation of the district, and with like effect”), IVGID is not empowered to furnish facilities for non-public recreation.
  8. See that August 26, 1965 letter from attorney Thomas E.A. Wilson to the Washoe County Board in support of the IVGID Board’s request the District be granted the power to furnish facilities for public recreation.
  9. See NRS 318.077.
  10. See pages 159-160 of the packet of materials prepared by staff in anticipation of the Board’s May 27, 2020 meeting (“the 5/27/2020 Board packet”).
  11. Given three (3) of those beaches are located adjacent to one another (Incline, Ski and Hermit beaches), there really were four (4) beaches3 (the other being Burnt Cedar Beach).
  12. GID Boards “have power and authority to levy and collect (their own) general (ad valorem) taxes on and against all taxable property within the district” (see NRS 318.225).
  13. (Connick v. Commissioners of Washoe County, IVGID, CBDC and IVRA, Case No. 240307; CBDC v. Connick and others, Case No. 240863; CBDC v. Connick and others, Case No. 240864; and, Seamount, Inc. v. Connick and others, Case No. 231359).
  14. IVGID Trustee Harold Tiller’s October 25, 1965 testimony to the Washoe County Board in support of the District’s request for the addition of powers of public recreation expressly represented that “with the acquisition of the two pieces of Lake frontage11…the property owners of…IVGID would be assured forever of (private) access to and use of Lake Tahoe” (see page 159 of the 5/27/2020 Board packet).
  15. See pages 612-616 of the packet of materials prepared by staff in anticipation of the Board’s June 23, 2020 meeting (“the 6/23/2020 Board packet.”
  16. Interestingly, IVGID Trustee Harold Tiller’s October 25, 1965 testimony to the Washoe County Board in support of the District’s request for the addition of powers of public recreation represented “that the beaches c(ould) be acquired for $1.25 million” (see page 160 of the 5/27/2020 Board packet). How and why did the purchase price nearly double?
  17. See pages 618-624 of the 6/23/2020 Board packet.
  18. Note that here IVGID is modifying Harold Tiller’s October 25, 1965 testimony to the Washoe County Board and the public that ad valorem taxes based upon “the assessed value of IVGID, together with its expected growth, w(ould be the financing source to) readily finance the acquisition and operation of the…beaches.”
  19. Assessing each hotel/motel room was the consideration exacted in consideration of giving their occupants beach access.
  20. See pages 618-624 of the 6/23/2020 Board packet.
  21. See page 1, line 28-page 2, line 6 of the beach deed (go to https://www.yourtahoeplace.com/uploads/pdf-ivgid/Beach_Deed.pdf).
  22. See page 2, line 27-page 3, line 2 of the beach deed.

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