Five years ago, Washoe County handed 87 parcels of land over to the Incline Village General Improvement District, forgiving more than $800,000 in unpaid property taxes on the land in exchange for a promise from Incline Village to use the land as publicly owned open space.

More:Nevada's ghost governments violating state law: Wright

More:Incline Village GID hasn't violated any law: Guinasso

The lots, most of them unbuildable scraps of land, had wound up on Washoe County's delinquent tax rolls because the owners hadn't paid property taxes for at least three years. Under state law, those parcels can be given to another government agency if that agency will use the land for a specific public purpose.

But after telling the county the land would be used for open space, an IVGID official, without approval from the agency's elected board or public notice, sold three parcels to private buyers, a Reno Gazette Journal investigation found.

As it turns out, those tiny parcels have a value: Owners of land in Incline Village — even unbuildable scraps of land — get exclusive access to three private Lake Tahoe beaches and discounted skiing, golfing and hunting.

The three buyers dealt directly with IVGID Finance Director Gerry Eick, who carried out the transactions on behalf of the general improvement district, charging the buyers only the unpaid recreation fees plus interest associated with the parcels. The sales price for two of the parcels was $14,095. The third went for $19,000.

None of the buyers had to pay the $11,059 in back property taxes forgiven by Washoe County when it transferred the land to IVGID.

Now, the Washoe County District Attorney is telling IVGID the land sales weren't legal and must be undone, or IVGID must pay the county the back property taxes, according to a letter obtained by the Reno Gazette Journal.

"It appears that IVGID misrepresented its intent to maintain these parcels for public use and therefore the delinquent taxes should not have been waived," Deputy District Attorney Michael Large wrote in a letter to IVGID's general manager Friday.

The land sale also has raised questions about the authority of general improvement districts — quasi-government agencies that provide municipal services to ratepayers — and whether they receive any oversight.

The fact an IVGID staff member could authorize a land sale without a public process and without board approval flummoxed Washoe County Commissioner Marsha Berkbigler, who asked the district attorney to review the sales.

"This is bullshit," Berkbigler said. "This land belongs to the taxpayers. It does not belong to a private citizen. GIDs must be responsible for tax dollars. They must be. And if the attorney general or the district attorney or the governor or the Legislature or anyone else isn't going to take responsibility for the GIDs, I will."

UPDATE::IVGID issues lengthy statement on sale of the unbuildable lots

The fight for beach access

Incline Village is an unincorporated town on the north shore of Lake Tahoe that has become a haven for the wealthy, including tech company billionaires who have built or bought mansions there to benefit from Nevada's low tax environment. The median home price is $722,000. The median rent is $3,200 a month, according to Zillow.

The Incline Village General Improvement District is run by an elected board and provides town services such as water, sewer and trash collection. IVGID also provides recreational services, including access to three private beaches. It owns the Diamond Peak Ski Resort, offering residents discounted lift tickets. It also owns two golf courses and provides hunting access in its wetlands.

The GID serves both Incline Village and the neighboring town of Crystal Bay. But residents in Crystal Bay don't enjoy the same beach access as ratepayers in Incline Village.

From this disparity was born the market for the unbuildable lots grabbed by IVGID in 2012.

Residents of Crystal Bay, who want beach and boat access, simply need to buy an unbuildable lot and begin paying the recreation fees, which are assessed on land similar to how property taxes are assessed. This workaround apparently spread by word of mouth after Eick sold the first three properties.

Crystal Bay resident Mark Alexander said he learned of the scheme from his neighbor, who bought one of the three lots.

"We in Crystal Bay have been denied (beach access) forever," Alexander said. "Even though we're members of IVGID, we can't launch our boat from the beach. I either have to take it to the Coast Guard station or drag it down to Zephyr Cove."

When he heard about his neighbor's land purchase, he figured he'd try it himself. He also spread the word among his community members.

"You can buy a whole damn lot, but the cheaper way to do is to get a non-buildable lot," Alexander said. "I decided to pass it on that this is how we can finally do it."

When Alexander inquired about buying a lot from IVGID, however, he was told there was a waiting list and that his name had been added to it.

Even though he's interested in buying a lot if IVGID is selling, he realizes the cost to the rest of the county, including the schools, of not collecting the back property taxes for the parcels. Property taxes are distributed to various local governments, including IVGID and the school district.

"These are classified as public property, so IVGID doesn't have to pay any taxes on them," he said. "That takes away thousands from the schools."

'All to the benefit of the public'

IVGID's leadership has realized selling the land without a policy, without a public process and without board approval was a bad idea and they've put a moratorium on sales until a policy can be developed.

But they maintain steadfastly it wasn't illegal.

State law includes detailed restrictions on how cities and counties can sell land. The commission or council must pass a resolution that the sale be in the public's best interest, obtain an appraisal, notify the public the land is for sale and then decide on a buyer in an open meeting.

But general improvement districts are not held to any of those requirements in state law, and Eick, IVGID's finance director, took none of those steps.

Eick, who conducted the sales, said he was approached by buyers who were interested in the parcels. The first two buyers approached him in 2014.

"It was kind of word of mouth between a couple of Realtors," Eick said. "The Realtors found themselves with a client who said, 'I’m interested in the recreation privileges, do you know a way to get them?'"

Eick said his top priority was selling the parcels to people who already lived in the community. All three buyers owned land in Crystal Bay, he said.

To come up with a sales price, Eick calculated how much was owed in back recreation fees to IVGID for each parcel and added an interest rate. He did not obtain an appraisal.

The three parcels sold are slices of common area at a condominium complex near Diamond Peak Ski Resort.

IVGID General Manager Steven Pinkerton said the land sales made sound fiscal sense. The buyers paid IVGID for the unpaid recreation fees, will continue to pay recreation fees and now pay property taxes. Because the parcels are unbuildable, Pinkerton said they would remain as open space even under private ownership.

"The bottom line is, the (buyers) approached us, we recovered our costs and we put this back on the tax rolls, all to the benefit of the public," Pinkerton said.

Jason Guinasso, IVGID's general counsel, said the three land transactions, two in 2014 and one in late 2015, were legal. Guinasso, who started working for IVGID in early 2015, originally said he did not review any of the transactions before they took place.

But when a reporter pointed out the date of the last transaction, Guinasso checked his records and found he had approved the final sale.

"It's the fiscally responsible thing to do and there's no (Nevada law) that says we can't do it," Guinasso said.

State law allows general improvement district boards to dispose of land. Guinasso said the board delegated the authority for signing procurement contracts of less than $50,000 to the general manager, who delegated the authority to Eick. Guinasso said the land sale falls under the board's contract policy.

But all three IVGID leaders, Guinasso, Pinkerton and Eick, said they realize the district needs a policy if it wants to continue selling the parcels. They have put a moratorium on further land sales until the board creates a policy.

"It shouldn't have happened," Guinasso said of selling the land without a transparent process.

"(State law) doesn't require us to do it, but when we're managing public assets, we want to come up with a process that is fair and transparent."

'Can he just sell the ski resort?'

IVGID's elected board members also have expressed concerns about the land sales.

"The three properties were sold by an unelected official without approval," Trustee Tim Callicrate said at a recent board meeting. "I think this is very unfortunate. I think one or several of our employees have been given erroneous information. They were perhaps misled to potentially and inadvertently break the law."

During the meeting, Callicrate said he and Trustee Kendra Wong — both elected in 2014 — knew nothing of the land sales. But Guinasso pointed out emails about the land sales sent among Callicrate and other board members in Oct. 2014.

"I would note, just to refresh your memory, these properties and the sale of the properties were actually a matter of common knowledge for you, Trustee Callicrate and Trustee Wong," Guinasso said. "This isn't something that's been a secret."

Trustee Matthew Dent, who was elected in 2016, said he only recently became aware of the land sales and is extremely troubled by them.

"We represented to Washoe County we wanted that land for open space and then we go around and sell it to private parties?" Dent said. "That's the part that's almost like a misrepresentation to the county.

"And what is the authority of a staff member to do that? What did he represent to the title company to sell a piece of land? How does a single staff member do that? Can he just sell the ski resort? Can he start selling beaches?"

'We've always been forthright'

In his letter to IVGID's general manager, Deputy District Attorney Large did not dispute Eick's legal authority to sell the land. Rather, he took issue with the board's 2012 promise to use the land for a public purpose, namely as open space, which triggered the county's decision to hand it over to IVGID tax free.

Unless IVGID rescinds the land sales, the district could owe Washoe County about $33,000 in back property taxes. Unwinding the sale could prove difficult. One of the three parcels has already been sold to another buyer.

Guinasso disputes that the county didn't know IVGID had hoped to sell the land at some point, saying Eick talked to staff at the Washoe County Treasurer's Office about the process for selling the lots in the future prior to obtaining the land.

"The thing that bugged me about (Large's) letter is he accuses us of not disclosing we were going to sell the property," Guinasso said. "That's just not accurate. We've always been forthright."

Eick said a county official told him IVGID could sell the land if it paid the back taxes. A 2013 email from Deputy Treasurer Linda Sanchez Jacobs seems to confirm those conversations took place. But Guinasso said the county never put a restriction on the actual deeds requiring IVGID to pay the taxes if it sold the land.

Guinasso said IVGID has no intention of trying to unwind the sales, which are now more than two years old. Whether IVGID will pay the back taxes also remains to be seen.

"It looks like he's trying to take a statute and retroactively apply it to our sale," Guinasso said. "I just don't know if that's appropriate or not."

Editor's note: This story has been edited to correct the spelling of Gerry Eick's name.