Nevada Body of Water Set to Become a Bone of Contention

On the palm-shaded road to the Lake Las Vegas Resort, there's a small promotional billboard that describes the allure of this ongoing $4 billion residential and commercial development. It reads: "The wonder of nature. The imagination of man."

Once inside this exclusive oasis for the mega-rich 17 miles from Las Vegas, the billboard's message springs vividly to life. There's a cluster of cliffside mansions, a verdant championship golf course, a helipad, and - the ultimate in luxury - a twinkling new 320-acre lake.

Here in greater Las Vegas, where a a castle and a pyramid share the skyline, a two-mile lake in a once-barren patch of desert may not seem so extraordinary. But in the context of Nevada's explosive growth and dwindling water supply, this private aquatic playground does appear uniquely preposterous.

Critics say the lake is a testament to the undemocratic and shortsighted way water is allocated in the Southwest. Supporters say it's a justifiable use of resources in an area dependent on tourism. As Nevadans approach the day when they will consume every drop of water allotted them, Lake Las Vegas could become a serious point of contention.

"Most people think of water as a social resource to be held in the public trust," says Jason Morrison, a fellow at the Pacific Institute in Oakland, Calif. "But the story has always been different in the West. Here, people who have been able to procure rights to water have always been able to make a lot of money. It's the way the West was settled."

It's no secret that the future of this arid region is married to the Colorado River. Through an elaborate series of dams and diversion projects, every drop of Colorado water is used 17 times. By most accounts, the river is dangerously overtaxed.

Under the 1928 Boulder Canyon Project Act, California, Arizona, and Nevada can each consume a percentage of the 7.5 million acre-feet of river water that flows through the lower Colorado basin.

Nevada's share of this total is a scant 300,000 acre-feet. Officials here estimate that if current growth trends continue, the state will reach this maximum threshold in 10 to 15 years.

What happens then is anybody's guess. Perhaps the state will simply prohibit new development. Perhaps Nevada lawmakers will persuade Congress to increase their percentage or reduce the amount of river water reserved for agriculture. Then again, citizens here might demand that officials rethink previous decisions to sell large quantities of water to private entities.

The city of Las Vegas already uses more water per capita than any other city in the nation. Much of it is bought by casinos to fill grandiose fountains and moats, and provide showers for the 30 million tourists who stay in area hotels each year.

Yet by itself, the Lake Las Vegas Resort is already one of the state's biggest customers. The resort's open-ended contract with the city of Henderson allows it to use up to 7,000 acre-feet each year to replenish water lost to evaporation and to maintain the five or six golf courses it is planning to build.

This year, resort officials say, they'll consume about 4,000 acre-feet, for which they'll pay the city about $1.3 million. When the resort reaches its maximum usage, it will consume about 2 percent of the entire state's water allocation.

A development like this is not likely to happen again. Many communities, including Las Vegas, have adopted ordinances limiting the size of man-made lakes.

And since the lake was begun in 1990, attitudes toward water use have grown more conservative. Some members of the Nevada legislature have said they won't support another such project.

The resort's ability to build a lake of this size was largely the result of its unique history, says Dennis McGarvey, vice president of property operations at Lake Las Vegas. The resort's 2,300 acres, and its water rights, were originally traded by the federal government 30 years ago to Nevada businessman Carlton Adair in exchange for property he owned on nearby Lake Mead.

Neither Mr. Adair, nor two subsequent owners, were able to develop the land. It was purchased in 1990 by its current owner, Transcontinental Properties, a consortium of wealthy investors led by Texans Sid and Lee Bass.

The lake, completed in 1992, was just the beginning. When finished, this $4 billion project will be the largest private resort in the nation. It will contain hundreds of upscale homes, six five-star hotels, several casinos, and a glitzy shopping district modeled after a Mediterranean village.

"It will be good for the city," Mr. McGarvey says. "The public will be able to come here and stay in the hotels and rent boats and go shopping." The resort has already created two wetland areas on the lake, he says, and has made conservation a priority.

Indeed, there's little opposition to the project here in Henderson. The resort is already the city's largest taxpayer, and officials here note that they have completed exhaustive studies that do not suggest the resort's demand for water will be burdensome down the road.

"I don't want to minimize the effects of growth on our water supply, but I believe it will be accommodated," says Kurt Segler, a Henderson city spokesman. One thing most people agree upon, he adds, is that the water shortage will spur the creation of a regional market economy for water, in which entities with deep pockets will still be able to procure it.

Besides, he argues, it would be foolish for a city whose chief resource is its climate to shun a world-class resort. "This is our economy," Segler says. "When we use water like this we are supporting our economic base. It's that simple."