The history of how and why IVGID acquired Incline Village’s beaches is really a study insofar as how and why general improvement districts (“GIDs”) in general, and IVGID in particular, were created.

HOA Acquisition: Many people think IVGID’s acquisition of our beaches¹ goes all the way back to the District’s creation on May 20, 1961². But that’s not accurate. IVGID acquired the beaches more than seven (7) years afterwards, on June 4, 1968. Between 1960-68 Crystal Bay Development Co.³ (“CBDC”), Incline Village’s developer, owned the beaches. During this period CBDC sold over three thousand (3,000) vacant Incline Village lots⁴. And insofar as every one of those lot sales was concerned, CBDC’s sales representative(s) represented Incline Village’s four (4) beaches⁵ would be a private homeowner amenity available to be used only by those purchasers of Incline Village properties⁶ and their guests. An homeowners’ association [initially the Incline Beach Recreation Corporation (“IBRC”) and later the Incline Village Recreation Association (“IVRA”)] was created “for the sole purpose of owning, developing and maintaining Incline Village beach propert(ies)”⁷ which was to include “construction of a marina and various pool and bathhouse facilities.”⁸

The way CBDC structured Incline Village lot sales, each purchaser was contemporaneously sold a share in the IBRC⁹. And as a result, he/she/it became an owner-member whose voting-interest in this homeowners’ association (“HOA”) ran with his/her/its lands⁷. In other words, IBRC was allegedly the owner of Incline Village’s beaches, and the current lot owners (IBRC membership could not be transferred separately nor retained after Incline Village land ownership ceased) were the beneficial owners of IBRC. Yet for some reason title to Incline Village’s beaches was never transferred to IBRC. And because lot sales were not as brisk as initially projected, CBDC was forced to borrow moneys and encumber the beaches to guaranty repayment. Which unbeknownst to lot owners meant CBDC did not have the financial means to transfer the beaches to IBRC “free and clear” as represented. So CBDC required some revenue source to unencumber title to Incline Village’s beaches. And that source became the purchase price CBDC could exact¹⁰. As the reader can see from that March 7, 1968 letter to Incline Village property owners¹¹:

“The most feasible method of (local parcel owners) acquiring ownership of the beaches from Crystal Bay Development Co. and financing that acquisition, (wa)s by a purchase by the Improvement District rather than the Incline Village Recreation Association(. Because)…the Recreation Association d(id) not have the (financial) means to obtain financing for the purchase…it lack(ed) any practical means of collecting revenues therefor; collections by the Association…depend(ed) at bottom on voluntary contributions; and, individual collection suits by the Association (would b)e impractical…(So) in order to finance…purchase of (the)…beaches, the Improvement District (would) proceed with…issuance and sale of revenue bonds…The purchase price…(would) create sufficient reserve funds…a margin against the first year’s interest and one year of principal…(as well as) cover the amount of the discount (6%) at which the bonds (would b)e sold, and…pay the various expenses of the bond issue itself. (And notably,) eliminated from the issue and sale as originally proposed (we)re funds for the construction of a marina and various pool and bathhouse facilities.”

And since bonding had worked so well in passing on the costs of infrastructure (streets, curbs and gutters, water, sewer, etc.) development onto the ultimate purchasers of Incline Village properties, CBDC’s plan was that local parcel owners who would be “specially benefited”¹² would be assessed the servicing and repayment costs associated with those bonds¹³.

The Power to Furnish Facilities For Public Recreation: But as is so often the case, there were unintended consequences. Since GIDs were limited purpose special districts, no GID in the State had the power to furnish facilities for recreation¹⁴. This meant CBDC’s principals had to lobby the State Legislature to secure expansion of the basic powers¹⁵ a GID could exercise. Welcome Harold B. Tiller who as the reader will see, was ultimately successful, again, in lobbying the Nevada State Legislature¹⁶.

Shortly after the State Legislature added public recreation¹⁷ as a new possible GID basic power (on August 12, 1965), the IVGID Board adopted Resolution No. 279 which asked the County Board “to commence proceedings…for the addition of…powers of public recreation.”¹⁸ On September 27, 1965 the County Board adopted Ordinance No. 140 which initiated those proceedings. And on October 25, 1965 it held public hearings “similar, as nearly as may be, to those pro(ceedings) for the formation of the district, and with like effect.”¹⁹ Ultimately on November 15, 1965 a divided (3-to-2) County Board amended Ordinance No. 97 via Bill 132²⁰, granting IVGID the new basic power to furnish facilities for public recreation¹⁷. The only testimony in support of IVGID’s request came from Board member Harold Tiller who testified²¹ that if the District’s request were granted

1. The recreational facilities to be acquired would be limited to “park properties (including the two beaches²² only);”

2. “All (other)…recreational facilities…w(ould) be privately owned…operated” and presumably privately financed;

3. The “facilities…to (be)…acquire(d would be)…acquire(d)…as public property” (meaning “public to the property owners in the District”);

4. “The beaches c(ould) be acquired for $1.25 million;”

5. “A bond issue to (pay to) acquire these facilities” would be needed;

6. Ad valorem “taxes” based upon “the assessed value of IVGID²³, together with its expected growth, w(ould be the source to) readily finance…acquisition and operation of the two²² beaches;” and,

7. “With…acquisition of the two pieces of Lake frontage²²…the property owners of…IVGID (rather than Incline Village or the general public as a whole) would be assured forever of (private) access to and use of Lake Tahoe.”

Litigation: Be that as it may, the County Board’s approval of IVGID’s request and the public’s opposition in anticipation of this approval triggered a number of lawsuits by prejudiced Incline Village parcel owners against the County Board, IVGID, CBDC, IVBC and IVRA²⁴. The writing was on the wall that local property owners were about to lose their private beaches contrary to what CBDC had represented in conjunction with the former’s lot purchases. But like so many court cases which are filed, these ones never saw the light of (a court) day. Instead, they were consolidated and eventually comprehensively settled by means of a judgment of dismissal²⁵ filed with the court on April 11, 1968. That settlement provided, in part, that:

1. The IVRA would be dissolved;

2. CBDC’s four (4) beaches²² would be sold to IVGID for $2.1 million²⁶;

3. To finance purchase of the beaches, 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 bonds²⁷ labeled “the Revenue Bonds of 1968;”

4. Local property owners’ obligation to pay an annual $50 homeowners’ assessment to IVRA would end;

5. Instead and as aforesaid¹³, for the period July 1, 1968-June 30, 1979 the following annual NRS 318.197(1) rates, tolls and charges²⁸ would apply²⁹: $50 for each developed single family lot, $50 for each developed multiple unit lot, $25 for each developed hotel/motel room³⁰, from $1-$15 per acre for each undeveloped single family parcel, and from $5-$200 per acre for each undeveloped multiple family parcel;

6. The parties would use their best efforts to fulfill each and every commitment expressed in a March 7, 1968 letter to Incline Village property owners³¹ which was attached to and incorporated into that settlement agreement²⁵; and,

7. The various lawsuits²⁴ would be dismissed with prejudice.

IVGID’s Acquisition And Funding: With no further obstacle to IVGID’s purchase of the beaches, on May 9, 1968 the IVGID Board adopted Resolution No. 485 which approved entry into what became a May 20, 1968 agreement to purchase Incline and Burnt Cedar beaches²² from CBDC’s successor. On the same day the IVGID Board adopted Resolution No. 482 which further modified Resolution No. 451’s RFF³². A number of past resolutions dealing with this subject matter are missing from the District’s records. Notwithstanding, it appears that on May 31, 1968 the Board adopted Resolution No. 491 which provided for the issuance of $2.685 million of revenue bonds to purchase the beaches. Since this resolution amended Resolution No. 420, in order to understand the revenue source for repayment of the Revenue Bonds of 1968 one needs to examine Resolution No. 420 (which thankfully does exist). ¶8.03 of Resolution No. 420 states that the IVGID Board intends to “establish standby charges…for the furnishing of…recreational facilities, and…the availability of service of said facilities…(which will be assessed against)…all…privately owned propert(y) within the District.” ¶8.34 states that “all of the gross revenues” realized from those charges will be “pledged as a prior first charge…used and applied” towards repayment of the predecessor to the Revenue Bonds of 1968. Thus once Resolution No. 420 was adopted, as amended on April 16, 1968 by Resolution No. 451, it became clear (see ¶4.01) that the RFF would be used to service (the) bonds whose proceeds would be used to acquire and improve Burnt Cedar Beach and Incline Beach. In other words, the funds used to purchase the beaches didn’t come from IVGID nor its ad valorem taxes as Harold Tiller had represented to the County Board and the public on October 25, 1965²¹. Rather, they came from those property owners whose Incline Village properties were involuntarily assessed the original RFF and subsequent Beach Facility Fee³³ (“BFF”).

On June 3, 1968 the IVGID Board adopted Resolution No. 493 which approved “the form of the Deed relating to the transfer of the Incline and Burnt Cedar Beaches²² unto the District.” And on June 4, 1968 IVGID formally acquired the beaches³⁴.

Rather interestingly, in its haste to add public recreation as a new possible GID basic power, the State Legislature forgot to provide a funding source. Although NRS 318.200(1) at the time read that GID “board(s had)…the power to fix, and from time to time increase or decrease sewer, water, lighting, garbage or refuse rates, tolls or charges,” no express power existed associated with fees or charges of any nature associated with access to or use of public recreation facilities. Or the services offered thereat³⁵! In 1967 this “mistake” was remedied as NRS 318.200(1) was amended³⁵ again to expressly allow GIDs to charge rates, tolls and charges for “other recreational facilities” in addition to “electric energy, swimming pool…television, sewer, water, lighting, garbage (and) refuse” services.

Moreover, when IVGID acquired the beaches there was no express statutory entitlement to acquire “beaches” per se. Rather, NRS 318.143(1) read that GID “board(s could generically)…acquire, construct, reconstruct, improve, extend and better lands, works, systems and facilities for recreation.” However in 1971 the Legislature must have felt the necessity to expressly identify the types of recreation facilities a GID could acquire. So NRS 318.143(3) was expressly added to allow GIDs to furnish all of the recreation facilities the District had/could possibly have had its eyes on acquiring. In other words, “exposition buildings, museums, skating rinks, other type rinks, fieldhouses, sports arenas, bowling alleys, swimming pools, stadiums, golf courses, tennis courts, squash courts, other courts, ball fields, other athletic fields, tracks, playgrounds, bowling greens, ball parks, public parks, promenades, beaches, marinas, levees, piers, docks, wharves, boat basins, boathouses, harborages, anchorages, gymnasiums, appurtenant shower, locker and other bathhouse facilities, amusement halls, dance halls, concert halls, theaters, auditoriums, aviaries, aquariums, zoological gardens, biological gardens and vivariums (or any combination thereof).”³⁶

So now you know when, how and why the District purchased our¹ beaches!

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1. We state “our beaches” because in reality, equitable ownership is not vested in IVGID. If one reads the beach deed, one will discover the beaches were granted to IVGID as local parcel owners’ beach steward and fiduciary for the direct benefit of the then and all successor owners of Incline Village properties within IVGID’s then boundaries. Equitably, that makes the beaches our beaches rather than IVGID’s. Additionally, the reader will discover the beaches were paid for by those local property owners with beach access. Given none of IVGID’s revenues from other sources (such as taxes, recreation facility user fees, etc.) paid for the beaches, where does it get off asserting the beaches are theirs?
2. See Washoe County Ordinance 97, Bill 57.
3. Remember. CBDC acquired all 9,000 acres destined to become Incline Village, including the beaches, on June 1, 1960.
4. See https://www.clubtahoe.com/history-of-incline-village/.
5. Incline, Ski, Hermit and Burnt Cedar.
6. Many people do not know that prior to George Whittel’s sale of these 9,000 acres to Art Wood and company, approximately 45 lakefront lots had been sold. Although all of these lots had their own Lake access, they did not have access to the beaches ultimately acquired by IVGID. Because they weren’t part of IVGID when the latter was created. Only because of sanitation reasons, over the years these lots were annexed into IVGID.
7. See CBDC’s 1961 “Community Beaches” sales brochure. This document was given to all prospective purchasers of Incline Village property as part of CBDC’s sales materials.
8. See page 3 of that March 7, 1968 “very important” letter to Incline Village property owners signed by representatives of CBDC, IVGID, IVRA and their attorneys [see page 620 of the packet of materials prepared by staff in anticipation of the Board’s June 23, 2020 meeting (“the 6/23/2020 Board packet”)].
9. “The initial purchase…(price for a share wa)s $50(, and each lot was to be)…assessed…a maximum of $50 per year thereafter, beginning July 1, 1961.”⁷
10. What was initially pegged at $1.25 million¹⁹.
11. See pages 619-620 of the 6/23/2020 Board packet.
12. But how were they specially benefited? Hadn’t they purchased interests in the IBRC which supposedly owned the beaches and would make their exclusive use available for members’ use? If not, then why the purchase?
13. Those assessments were spelled out as follows: $50 per year per single family lot; $50 per year per developed multiple unit; $25 per year per developed hotel/motel property unit; $10 per acre per undeveloped single family parcel; and, $200 per acre per undeveloped multiple family parcel (see page 621 of the 6/23/2020 Board packet). This assessment structure became the blueprint for what became the District’s first Recreation Facility Fee (“RFF”).
14. The only basic powers GIDs were authorized to assume at that time were those: “to grade…regrade…surface and…resurface streets, alleys and public highways” (see sec. 23 of Chapter 319, SB20, page 462, 1959 Statutes of Nevada); “to improve streets within the district by grading and regrading, and by the construction and reconstruction of…curb and gutter, in combination with sidewalk or otherwise, and to acquire improvements necessary and incidental to the foregoing improvements, including…drains, catch basins, valley gutters, (and) driveway inlets” (see sec. 24 at page 462); “to construct, reconstruct, replace or extend sidewalks” (see sec. 25 at page 462); “to construct, reconstruct, replace or extend storm sewer and other drainage facilities…including…the laying of pipes and the erection of catch basins, drains and necessary inlets and outlets” (see sec. 26 at page 463); and, “construct, reconstruct, improve, extend or better the sanitary sewer system or any part thereof, including…mains, laterals, wyes, tees, meters and collection, treatment and disposal plants” [see sec. 27(1) at page 463].
15. That is, in particular, the power to furnish facilities for public recreation [see NRS 318.116(14)] “as provided in NRS 318.143.”
16. The principals of CBDC (Mr. Tiller was one of them as well as IVGID’s Treasurer) were successful because they and their colleagues who were committed to a common goal 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 its launch Senator Bible had served as the Attorney General for the State of Nevada, (along) 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 well acquainted with the Legislature and its legislators?
17. Although the word “public” (see SB297, Chapter 413, section 21.5, page 1088, 1965 Statutes of Nevada) was deleted from NRS 318.143(1) in 1967 and restated simply as “recreation” during the fifty-fourth (54th) Session of the Legislature [see former NRS 318.116(13) {SB408, Chapter 542, sections 23 and 24, page 1693, 1967 Statutes of Nevada} and NRS 318.143(1) {SB408, Chapter 542, section 63, page 1714, 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)]. Nevertheless, either intentionally or as an unintended consequence, the reader will see that the furnishing of facilities for non-public recreation has become a new de facto basic power exercised by IVGID notwithstanding the Washoe County Board of Commissioners (“County Board”) never granted IVGID this new basic power as required by NRS 318.077.
18. See that August 26, 1965 letter from attorney Thomas E.A. Wilson to the County Board in support of the IVGID Board’s request the District be granted the power to furnish facilities for public recreation.
19. See NRS 318.077.
20. See sec. 1(k) of Ordinance No. 97, Bill 132, as initially authorized by NRS 318.143(1) [see SB297, Chapter 413, at page 1088, Statutes 1965].
21. 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”).
22. Given three (3) of those beaches are located adjacent to one another (Incline, Ski and Hermit), there really were four (4) beaches⁵ (the other being Burnt Cedar).
23. 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).
24. See Connick v. Commissioners of Washoe County, IVGID, CBDC and IVRA, Second Judicial District Case No. 240307; CBDC v. Connick and others, Second Judicial District Case No. 240863; CBDC v. Connick and others, Second Judicial District Case No. 240864; and, Seamount, Inc. v. Connick and others, Second Judicial District Case No. 231359.
25. 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”).
26. Interestingly, IVGID Trustee Harold Tiller’s October 25, 1965 testimony to the County Board in support of the District’s request for the addition of powers of public recreation represented “the beaches c(ould) be acquired for $1.25 million” (see page 160 of the 5/27/2020 Board packet). How and why then did the purchase price eventually double?
27. See page 619 of the 6/23/2020 Board packet. Interestingly, Resolution No. 420 (adopted October 5, 1967) authorized the issuance of $3.6 million of revenue bonds. However, after IVGID could find no takers, the IVGID Board scaled back the District’s proposed bond offering by nearly $1 million to $2.685 million (see Resolution No. 450 adopted April 8, 1968).
28. This became the official birth of the District’s RFF.
29. Note that here IVGID was modifying Harold Tiller’s October 25, 1965 testimony to the 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.”
30. Assessing each hotel/motel room was the consideration exacted from hotels/motels in consideration of giving their occupants beach access.
31. See pages 618-624 of the 6/23/2020 Board packet.
32. The IVGID Board had previously adopted Resolution No. 420, on October 5, 1967, which authorized issuance of revenue bonds (subsequently labeled “the Revenue Bonds of 1968”) to purchase and improve the beaches.
33. See our discussion of How The BFF Was Created.
34. IVGID’s acquisition of the beaches was “only for the purposes of recreation by, and for the benefit of, property owners and their guests (specifically including occupants of hotels and motels³⁰) within the boundaries of the Incline Village General Improvement District as (then) constituted, and, as the Board of Trustees of the District (could) determine, the guests of such property owners” (see page 1, line 28-page 2, line 6 of the beach deed), 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” (see page 2, line 27-page 3, line 2 of the beach deed).
35. See AB408, Chapter 542, page 1700, 1967 Statutes of Nevada.
36. See AB631, Chapter 507, page 1054, 1971 Statutes of Nevada. Doesn’t the reader find it interesting how many of the specific public recreation facilities Incline Village’s founders envisioned ended up becoming permitted by NRS 318.143(3)? Moreover, how many GIDs in the State out of a total of 84 (see University of Nevada Cooperative Extension Fact Sheet 13-32, Funding Economic Development in Nevada: General Improvement Districts) does the reader envision are even capable of furnishing “beach, marina, levee, pier, dock, wharf, boat basin, boathouse, harborage, (and) anchorage” facilities?