First in a series examining the Paradise Canyon (Wolf Creek) lawsuit filed against VVWD

Part 2 will discuss issues about the lease agreement between VVWD and Wolf Creek for 155 shares of irrigation water which is the heart of the lawsuit.

Part 3 will discuss Clemetson’s efforts to monitor the amount of water the golf course uses and to reach agreements with VVWD prior to the lawsuit.

Part 4 will cover information about Clemetson’s $2.125 million loan for which VVWD issued an estoppel agreement in 2012.

Part 5 will provide information about people Clemetson has hired like former VVWD Hydrologist Michael “Boomer” Johnson after he left prison, former VVWD attorney George Benesch while he was serving as VVWD counsel, and former water board members Sandra Ramaker and Robert “Bubba” Smith.

Does Wolf Creek lawsuit hold water

By Barbara Ellestad

MLN

Paradise Canyon, LLC, which owns the Wolf Creek golf course in Mesquite, sued the Virgin Valley Water District in May 2018 in civil court over a 2011 lease agreement that provides the golf course with irrigation water. Wolf Creek leases 155 shares of non-potable irrigation water at $250 a piece for a total annual payment of $38,750.

The lease comes up for renewal this year.

VVWD currently leases water shares to Southern Nevada Water Authority (SNWA) for $1,246 a share. The VVWD Board of Directors recently set its water share price at $1,115 a piece.

While the lawsuit does not seek direct monetary payment from the district should the golf course win, it does ask the court to place restrictions on future water payments and leases with the district. It also asks for attorney’s fees and costs incurred in having to prosecute the action.

As part of Mesquite Local News’ mission to educate and inform the public, this series of articles will examine the genesis of a lawsuit Paradise Canyon, LLC, filed against the VVWD in May 2018.

While MLN has published many articles using public documents and court filings following the status of the lawsuit, this series will attempt to delve further into underlying issues surrounding it, the golf course, the water district and water issues.

The series is based on the transcribed deposition of Cory Clemetson, part owner of Wolf Creek, that was taken on May 21 by attorney Bo Bingham, who represents VVWD. Clemetson’s attorney, Jeffrey Sylvester, was present during the seven-hour deposition.

Because the lawsuit involves a public entity that is funded by ratepayers in the Virgin Valley, all court filings are a matter of public record. All previous MLN articles have relied upon court documents filed by both sides. The reporter in this series purchased the transcript from Manning, Hall & Salisbury, Certified Court Reporters and was not given the deposition by either side.

Since some of the issues are dense, the series will group topics together in the articles for clarity even though related statements may be scattered throughout the deposition transcription. Where deemed necessary, a short clarification or explanation of the issue may be given. Otherwise, all statements are those of Clemetson and Bingham.

Ownership of Wolf Creek

Clemetson graduated from college in 1993 with a degree in communications. “I was a sports agent for over a decade, and I was highly successful at it. I would say at one time I was the top soccer agent in all of North America. I started my own sports agency in the mid ‘90s.”

He and his brother Chad are 50/50 owners of Wolf Creek and “my brother and I own lots of real estate assets throughout the state of Nevada.” He [Cory] has never owned a home in Mesquite although he frequently comes from Reno for business.

His father and a business partner Dennis Rider built the golf course, adjacent condos and housing subdivision, and another building in the late 1990s. “The course filed for bankruptcy in 2002. Ultimately, we [Cory and Chad] bought the golf course through the bankruptcy process. I don’t remember exactly but I think [we paid] around $11 million.”

When built, the golf course owned 61 shares of irrigation water. Those shares were sold through the bankruptcy for $6,600 a piece for a total of $402,600. Since then the golf course leased its water from the district.

Clemetson said he oversees all legal and operational matters for Wolf Creek. Bingham asked “When it comes to making a decision concerning whether the District is going to lease water, buy water, sell water, is that something that falls under your…” Clemetson answered, “Yes, that would be something that I would be involved in.”

When Bingham asked if he was paid a salary from Wolf Creek, Clemetson said, “No.” To clarify, Clemetson said he doesn’t take a salary but “I’m taking some money recently with Wolf Creek.” He said he received a financial benefit from Wolf Creek in 2018 but “Over the course of our ownership, by far we have poured more money into the course than any financial benefit.”

Who plays at Wolf Creek

Bingham said, “I’ve seen some documents indicating that Wolf Creek in one of the best golf courses in the country. Is that true?” Clemetson replied “In my opinion, yes.”

Clemetson went on to say that people come from all over the world to play the course, adding “sometimes when they’re making their tee time in Chinese, you kind of figure it out, that they’re not from local. It’s one of the great things about Wolf Creek is you see people from Serbia, you know, Holland, you know. We’ve had—I mean, tons from Australia, tons from the UK, I mean, it’s –it’s remarkable how many people have come and – it’s great for us, and it’s great for the golf industry here, and it’s great for the community.”

When asked “what percentage of the players come from here in the Virgin Valley?” Clemetson said, “Local play? That’s how we refer to it. I’d say it’s like 1 or 2 percent. And it’s usually in our – the slower months, like your July, June, summer time frame.

“I’d say, without question, I think it’s – you know, and it’s no disrespect to – to any of our colleagues here in the golf business, but I think it’s pretty universally understood that Wolf Creek is the driving force that brings people to Mesquite in the golf industry when you’re outside of the Valley.”

When Bingham asked what Wolf Creek charges per round of golf, Clemetson said “In peak we’re around the – between $180 and $200. I’d say that’s a good thing. And then we have what’s called twilight rates, which are a lot less per round.”

In other court filings, VVWD has estimated Wolf Creek’s annual gross revenues between $5,550,000 – $6,900,000 per year, not including clubhouse, pro shop, or restaurant revenues.

Clemetson said “There’s not a set locals’ rate. We haven’t been doing them at all for the last couple years – we’ve gotten away from them. We don’t do that.”

Much of the lawsuit hinges on the water district raising its lease rate for irrigation shares from the current $250 Wolf Creeks pays now to $1,115 beginning in January 2020.

Bingham asked Clemetson “Has Wolf Creek ever done any studies on how much it would have to charge for a round of golf if the [irrigation lease] rate was increased to $1,115?”

Clemetson responded, “No, we haven’t engaged in a study. We look at what we think the market could possibly handle, you know, what our customer will come out and pay.”

Bingham asked, “So it’s possible you guys wouldn’t lose any customers at all? You’d get, you know, just as many rounds if your rate was $5 more than it is currently, on average?”

“It’s possible. We just don’t know,” Clemetson replied.

Continuing Series

Part 2 will discuss issues about the lease agreement between VVWD and Wolf Creek for 155 shares of irrigation water which is the heart of the lawsuit.

Part 3 will discuss Clemetson’s efforts to monitor the amount of water the golf course uses and to reach agreements with VVWD prior to the lawsuit.

Part 4 will cover information about Clemetson’s $2.125 million loan for which VVWD issued an estoppel agreement in 2012.

Part 5 will provide information about people Clemetson has hired like former VVWD Hydrologist Michael ‘Boomer’ Johnson after he left prison, former VVWD attorney George Benesch while he was serving as VVWD counsel, and former water board members Sandra Ramaker and Robert ‘Bubba’ Smith.