Moulin Rouge will get $3 million city loan

Steve Sebelius

Thursday, March 7, 1996 | 11:59 a.m.

After months of delays, myriad meetings and lingering doubts about its success, the City Council took the first step toward restoring the historic Moulin Rouge hotel.

Council members voted unanimously Wednesday to give the hotel a $3 million loan of federal Housing and Urban Development funds, the linchpin to getting $2 million more from local banks for the 900 W. Bonanza Road project.

The vote followed a lengthy public hearing that drew supporters of the West Las Vegas hotel to City Hall, where the project had been put off since last year, when a $9.5 million loan was rescinded after a $1.8 million grant fell through.

"I think it's good sense for the council to fund this project," said state Sen. Joe Neal, D-North Las Vegas. "They need improvement."

Stan Washington, of the National Association for the Advancement of Colored People, challenged the council to approve the loan.

"This council has the opportunity to send a message to all African-Americans, whether this is 1996, and we're moving forward, or whether it's 1956," he said.

Supporter Joanna Wesley said new development is going to bring even more traffic to the historic casino's door. "When you talk about putting a big dome on that (Union Pacific) site, I don't see why you wouldn't give the Rouge a chance to get on its feet," she said.

The $6.2 million project is subject to several conditions, however. Among them:

* Disclosing all limited partners and how much they invest in the casino.

* Getting letters of intent from tour companies showing how many people they plan to bring to the hotel each week.

* Capping the salaries of Moulin Rouge operators James Walker and Joe and Sarann Preddy for three years.

* Hiring a management firm to oversee the operations of the casino until the $3 million loan is repaid.

* Getting an unlimited gaming license.

* Getting a $1 million grant from the city's redevelopment agency, which is presided over by the same council members who voted Wednesday's loan application.

Walker accepted most of the conditions, but objected to a requirement that the casino hire 85 new people and the terms under which the city could start foreclosure proceedings. Eventually, however, the council approved the loan with the conditions.

"Obviously we're very gratified to win this," Walker said after getting the loan. "There's a lot more work to be done."

First on the list is getting money from local banks, which have been waiting for a signal from the city that the project had merit. Walker predicted the venture would succeed and produce license fees and tax revenues that will more than make up for the loan.

"Really, it's a good deal for the taxpayers," he said.

Mayor Jan Laverty Jones said private investment from banks would buttress the city's move. She said professional gaming managers were necessary for success at the hotel-casino, however.

"If the private sector is willing to finance this project, then that gives me a level of comfort," she said.

Councilman Michael McDonald, who represents the area where the Moulin Rouge sits, also predicted success.

"If this gets half the marketing James Walker predicted he will get, it will be successful," McDonald said. "I'm optimistic. I think this will be a viable product."