What Developers Need to Know About, Amidst the Water Drought

Learn about strategies relevant to land use and development in southern Nevada. Guest authors: Brooke Holmes, Esq. and Michael S. Alires, Esq. of Brownstein Hyatt Farber Schreck, LLP.

As water conservation efforts ramp up, developers will need to implement strategies to comply with these regulatory changes across the Valley.

With southern Nevada reliant on the Colorado River, water resource planning is a priority to meet the community’s water demands. The Southern Nevada Water Authority (“SNWA”) has sought to ensure water removed from Lake Mead is used, deposited into the sewer system, treated, and returned. Each gallon returned generates “return-flow credits,” allowing southern Nevada to take more water from the Colorado River system. Water removed and not otherwise returned, such as evaporation or septic system storage, is deemed consumptive use and is the target of the SNWA. Developers are feeling the ripple effects from SNWA’s plans to reduce consumptive water use, including:

Expedited construction timelines

To reduce consumptive water loss, the Las Vegas Valley Water District (the “District”) updated its service rules prohibiting service to projects with evaporative cooling systems unless a building permit is applied for before September 1, 2023, issued before February 1, 2024, and a temporary certificate of occupancy, certificate of occupancy, or certificate of completion is issued before Feb. 1, 2026. See District Service Rules, Chapter 2, Section 2.1(a)(3); see also A.B. 97, 82nd Sess. (Nev. 2023) (allowing the adoption of a building code or ordinance or taking any other action to prohibit the construction or use of evaporative cooling mechanisms or to restrict water service to properties utilizing evaporative cooling). Tenant improvements within the shell building permitted prior to the deadlines may utilize evaporative cooling, and tenants or owners may replace or upgrade systems provided there is no increase in water consumption upon approval by the SNWA. Similarly, SNWA passed a resolution supporting the moratorium on commercial and industrial evaporative cooling systems, pushing municipalities to adopt similar ordinances. See also Henderson, NV, Ordinance 3939 (amending the Henderson Municipal Code, Chapter 15.24 relating to evaporative cooling).

Developers must explore alternative cooling technologies, such as dry cooled systems, and assess their efficacy in desert climates. These development changes may cause project and material delays, increased costs, retrofitting challenges, and modifications to scope and size of projects. Some developers are looking to phase developments and allow transition time to integrate alternative cooling systems and absorb additional operational costs. Alternatively, other developers are hastening design and construction timelines while seeking expedited plan review to meet the moratorium deadlines.

Consideration for alternative amenities

Developers are being pushed to consider amenity alternatives to further reduce evaporative water loss. The District, SNWA, and other municipalities have imposed:

  • Limitations on swimming pools, including a 600 square foot size restriction for single-family homes, and a 4% size restriction for the first 10 acres and 0.4% for additional development area for non-single-family developments (resort hotels being provided an additional 5 square feet per guest room). See Clark County Development Code, Sec. 30.64.060(2)(E)(iii).
  • Prohibitions on “nonfunctional turf” as of Jan. 1, 2024, without approval from SNWA pursuant to requirements adopted by SNWA, except for schools, parks, and cemeteries. See A.B. 220, 82nd Sess. (Nev. 2023); see also District Service Rules, Chapter 3, Sec. 3.10(b) & (c). SNWA has implemented a plan to remove existing nonfunctional turf, except for single-family properties, to be completed by Dec. 31, 2026. See A.B. 356, 81st Sess. (Nev. 2021).

Developers can expect heightened review of landscape and amenity plan approvals during the entitlement phase of development. Developers should consider landscaping alternatives to open area amenities, such as providing clubhouses to meet open space requirements. See also Henderson Mun. Code, Sec. 19.26.3.C. Developers with existing entitlements not yet developed may be required to modify previously approved designs due to recent regulatory changes.

Cost implications to sewer and septic system restrictions
To reduce consumptive water loss from septic systems, effective June 6, 2023, subject to certain exceptions, no new septic system may be installed on SNWA served property. The Nevada Legislature authorized a financial assistance program (to be established by Dec. 31, 2024) to pay 100% of the cost for properties served by the municipal water system to connect to the sewer system. An annual fee may fall upon property owners with existing septic systems to fund these costs. See A.B. 220, 82nd Sess. (Nev. 2023). Developers will need to consider the unavailability of septic systems, existing sewer line locations, and sewer connection costs.

About this article: This article was originally published in the Communiqué, the official publication of the Clark County Bar Association, (Aug. 2023). See https://clarkcountybar.org/about/member-benefits/communique-2023/communique-august-2023/.

About the authors
Brooke Holmes, Esq.

Brooke Holmes, Esq., with Brownstein Hyatt Farber Schreck, LLP, is an experienced real estate and land use attorney, assisting clients with matters from acquisition, disposition, development, entitlements, and a wide array of other complex real estate matters, with a focus in hospitality, gaming, retail development, and undeveloped land.

Michael S. Alires, Esq.

Michael S. Alires, Esq. is an experienced real estate attorney with Brownstein Hyatt Farber Schreck, LLP and a Las Vegas native whose practice focuses on solving problems impacting homebuilders and commercial real estate developers across the life cycle of real estate ownership, including acquisitions, development, leasing, common-interest community compliance, and dispositions.

© 2023 Clark County Bar Association (CCBA). All rights reserved. No reproduction of any portion of this issue is allowed without written permission from the publisher. Editorial policy available upon request.

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