City Council takes steps to resolve Fremont Street garage disputes

Denise Cardinal

Friday, July 18, 1997 | 11:06 a.m.

The city of Las Vegas is marshaling its financial forces in hopes of settling legal disputes surrounding the Fremont Street Experience parking garage.

The garage has been a thorn in the side of downtown redevelopment since it was erected two years ago. After using eminent domain to gain control of the land, the city was bombarded with lawsuits from property owners claiming the city illegally took their parcels.

In an effort to shorten the legal wars, the City Council recently introduced an ordinance to limit the amount of money the Fremont Street Experience Ltd. Liability Co. is required to pay for legal costs. Sources say settlements have been agreed to pending approval of the ordinance.

Under the current code, the city is responsible for the first $6 million and the corporation picks up the tab for the remaining costs. Under the new measure, Fremont Street Experience LLC would be responsible only for the next $6.4 million in costs, with the city picking up anything over $12.4 million.

Mark Paris, president of Fremont Street Experience, said the proposed change gives the city the power to settle the legal disputes without having to consult with the casino owners who make up the corporation.

"It was introduced to get us out of the process and allow the city to move forward," said Paris, adding that Mayor Jan Laverty Jones and the corporation had discussed the measure before its introduction.

"We needed to do this so we could negotiate these properties," Jones added. "We don't want to be in court for the next six years."

Some of the parties involved in the legal disputes, however, claim it's just another example of how the city is making taxpayers pay for casino interests.

The ordinance is set to be discussed July 21, at a recommending committee meeting.

The council also passed an ordinance Monday designed to free up money that could be used to pay legal fees.

Proposed by the redevelopment agency, the same department that handles downtown development projects like Fremont Street, the item allows the division to use bond reserve funds to access more money.

According to Steve Houchens, deputy city manager, the redevelopment agency has $7.4 million in reserve that's left over from bond issues -- sort of a rainy day fund used in case of a shortfall in current revenues. That money earns annual interest of about $370,000.

Instead of earning interest over 10 years, the city can buy an investment at a fixed rate and sell all future interest at a discount. The result is the redevelopment agency gets an advance payment estimated between $3.3 million and $3.5 million.

The money, Houchens said, could be used to help pay legal bills surrounding the Fremont Street Experience parking garage.

"That could be one of the uses of the money," he said. "There is some interest in working on the settlements. We also have a list of redevelopment projects much longer than the money we have for them."

Part of the $3.3 to $3.5 million will also be used, Houchens said, to kick-start the new City Centre Development Corp. -- a board of seven business owners that will act as liaisons between downtown businesses and the city in redevelopment projects. The board is modeled after a similar organization in San Diego that helped clean up the downtown area.

"Eventually the group will have their own executive director," Jones said. "They'll answer to the City Council, but we want to give the board the autonomy to make good sound business decisions for this downtown development."