Charting the Strip’s new course

Saturday, Aug. 1, 1998 | 5:25 a.m.

The southbound migration of Las Vegas Strip hotel-casinos that began in the late 1980s is about to be joined by a development that will feature birdies instead of blackjack.

The Clark County Commission is considering three competing proposals to develop an 18-hole public golf course and compatible recreational facility on the Strip immediately south of Russell Road.

The selected development will become the Strip's new southern gateway, just south of the Mandalay Bay hotel-casino under construction and west of McCarran International Airport.

Years from now that gateway could shift several more miles south, with the potential for new resorts extending out to Lake Mead Drive. But county planners never envisioned that resorts would extend immediately south of Russell Road because they would interfere with the airport runways across the Strip.

Because of McCarran, the barren 155 acres zoned for public facilities are subject to height restrictions and limited to uses that can tolerate high noise levels.

The county wanted to develop a golf course at that site as far back as 1982, when the county commission leased the land to Tom Carter Enterprises. The developer's plan never got off the ground, but that didn't quench the county's thirst for a golf course there.

"The county envisioned this land for years as a golf course because they thought it would be the best use of the land," county planner Ron Gregory said.

Chuck Pulsipher, a county senior management analyst, said industrial uses are compatible with the airport but would be opposed by neighboring resorts for aesthetic reasons. A golf course, he said, makes perfect sense.

"It would complement the resorts," Pulsipher said. "The more you think about it a golf course looks better and better. It would provide recreation for tourists and locals and it's aesthetically pleasing."

A park also could provide recreational opportunities and look pleasing to the eye. Gregory said people go to parks to relax and unwind. That's hard to do when jumbo passenger jets are roaring overhead.

Golfers such as Stu Reid, president of the 15,000-member Southern Nevada Golf Association, believe the Strip location is ideal for a public course. His main concern is that the course fees be affordable for locals. Of the 25 public courses in the Las Vegas Valley, no more than five have fees less than $50 a round, he said.

"I certainly think it would be very accessible for the city, right off the freeway," Reid said. "But I hope the (county commission's) decision is made on behalf of the residents and not the tourists.

"The people making bids on this land are all from companies that want to make money. If they can fill it with tourists who can pay $90 rather than locals who can pay only $40, it doesn't take a rocket scientist to determine who will play."

To attract potential developers for the land, the county advertised in golf magazines and other publications read by golf course contractors. There were 104 golf course development companies and individuals who requested more information from the county, but only three submitted proposals.

Sharon Hauht, the county employee who solicited the proposals, said most of the others who requested information lost interest upon learning that the county wouldn't share the costs of the project.

The county wants to share the revenue and maintain control of the land, however, and is requiring that the developer make a 50-year commitment. The benefit to the developer is that the land, which combines parcels owned by the county-run airport and U.S. Bureau of Land Management, is in a prime location with easy access to Interstate 15.

The only thing the three proposals have in common is an 18-hole public golf course. The US/GP-LV Partnership, represented by Las Vegas advertising executive Sig Rogich, also wants to build a 2.9-mile Formula One racetrack. The Walters Group, represented by local golf course owner Billy Walters, proposed an additional nine-hole, par 3 golf course. The Gary Player Design Group, teaming with Dallas-based Club Corp. of America, would add a tennis club.

The county commission was scheduled to select a proposal on May 5 but has voted twice for postponements, delaying the decision until Sept. 1. They invited the competitors to return with final offers that answer concerns raised by Circus Circus Enterprises and county staff.

Walters was furious because he thought his proposal was the best deal for area residents and should have been selected. He believed the delay would benefit his competitors more than him.

Walters said he was told that once commissioners selected a proposal, the developer would fill in the gaps created by questions over issues such as traffic and sewage treatment. Instead, he feared that the commissioners' delay left the door open so that his competitors could make major improvements to their proposals.

"I'm extremely confused why they delayed," Walters said. "It was made very plain early on in the process and in the materials sent to us that the developer that was chosen would negotiate a final contract with the county. At that time we would discuss all outstanding issues."

* Officially, the delays were prompted by complaints from Circus Circus that unresolved sewage and traffic issues would affect its hotels directly north along the Strip, especially Mandalay Bay. Mike Sloan, senior vice president and general counsel for the resort company, said the proposed racetrack was particularly worrisome.

"No one disputes these races generate huge amounts of noise and huge amounts of traffic," Sloan said.

County planners reported that each of the proposals had other significant shortcomings, ranging from unrealistic construction schedules to inadequate lighting and special-events planning. The planners also noted that each of the proposals was incomplete.

There were whispers that the real reason for the delay was to give the Rogich team more time to win over Circus Circus and county commissioners. But Las Vegan Tommy Baker, president of the partnership that includes Rogich, argued the decision to delay was astute because the competitors weren't made aware of the county staff's concerns until the May 5 meeting.

"Nobody had an opportunity to see what the questions were, and no one had an opportunity to respond, so it was an unfinished process," he said. "Walters had a lot of unfinished issues that had to be dealt with. All of us did.

"When an entity with more than $2 billion in investments wants a delay, what can you do? We certainly can't force the hand of Circus Circus."

But another reason the county commissioners gave to delay the decision is a bill pending before Congress that would benefit the racetrack proposal more than the others. Under current federal law, Baker's team would have to prove that the racetrack is a form of recreation in order to use the BLM land. The other two proposals would have an easier time getting BLM approval since no one disputes that golf and tennis are forms of recreation.

Mike Dwyer, BLM's Las Vegas district manager, said he isn't certain the racetrack would meet that criterion. But if the Southern Nevada Public Land Management Act passes Congress, the racetrack wouldn't need BLM's approval.

The bill, which passed the House last year, calls for BLM to sell or transfer thousands of acres of land in the Las Vegas Valley. BLM would also grant to the county acreage near McCarran, including the Strip parcel, that can be developed for uses that can tolerate the airport's high noise level. The Senate is expected to vote on the bill before its adjournment in early October.

* Land deals in Southern Nevada often involve a relatively small number of developers and power brokers who are linked to other community projects. In some instances, they share common interests and work together. Other times, they compete with one another. Las Vegas remains a small town in that respect.

The Strip land proposal is an example. Rogich and Walters are competitors on this project, but they share interests in other areas.

Both are strong supporters of Republican gubernatorial candidate Kenny Guinn, Rogich as a top strategist and Walters as a campaign contributor. Rogich and Walters share friendships with county commissioners and other local politicians, and occasionally work behind the scenes on the same campaigns. Both men also are involved in the same charity work through their membership on the Opportunity Village foundation board.

Another "small town" connection can be drawn between Circus Circus executives and Sahara hotel-casino owner Bill Bennett, who is co-owner of the Las Vegas Motor Speedway in North Las Vegas. Neither Bennett nor Circus Circus management are enthusiastic about the Formula One racetrack proposal.

Bennett, in fact, is vehemently opposed because he'd rather have the race at his speedway. But Bennett and Circus Circus locked horns three years ago over the latter's eventual acquisition of the defunct Hacienda hotel-casino. Rogich was credited with persuading both sides to resolve their differences.

These relationships are even more important because the process the county is using to select a proposal is based on subjectivity, and therefore is vulnerable to lobbying. Both Rogich and Walters have raised money for county commissioners, making the Player/Club Corp. group the real outsider.

But that's no comfort to Walters. He bemoaned the possibility his competitors could underbid him on issues such as golf fees and access by local residents now that his figures have been revealed.

Senior vice president Ken Kasten of Club Corp. conceded that his group will lower its proposed golf fees for county residents after learning they were by far the highest of the three proposals. In comparison to the top rates of $53 offered by Walters and $75 by the Rogich team, the Gary Player/Club Corp. group initially proposed $112.50 for weekdays and $127.50 for weekends.

"We're not that bothered by the delay," Kasten said. "It's actually giving us a chance to rethink the remaining county issues and fine-tune our proposal."

* Baker tried unsuccessfully for three years to get local resorts to sponsor Formula One racing. Rogich eventually pitched Baker's idea last year to county Parks and Recreation Director Glenn Trowbridge and to County Commissioner Lorraine Hunt, whose district includes the land in question.

The sales pitch included the notion that the race would attract at least 125,000 fans and 500 million television viewers while pumping as much as $300 million annually into the local economy. The international Formula One racing circuit conjures up images of Monte Carlo, Ferraris and drivers with foreign accents. And Baker figures such events attract the high rollers that casinos crave.

Baker noted that at least half of the Formula One racing circuits in the world -- spanning Europe, Japan, Australia, Canada and South Africa -- are in the heart of the sponsoring city. If Baker's proposal is accepted, Las Vegas would be the only Formula One site in the United States. But other cities such as San Francisco, Atlanta and Indianapolis also have expressed interest in hosting an F-1 race, and only one site in this country will be selected.

The county commission initially agreed last September to seek bids for a combination racetrack and golf course on the vacant Strip property. But the commission backpeddled later that month after Circus Circus expressed concerns about the race course.

By then, Sahara's Bennett also vowed to do everything possible to keep the track from being built. But F-1 director Bernie Ecclestone nixed the idea of using Bennett's speedway. Ecclestone said he didn't want a Formula One race, typically run on a winding road circuit, to be held on the speedway's tri-oval course or its infield.

There is no consensus among Strip executives about the racetrack proposal. The MGM Grand hotel-casino shares Bennett's opposition to the Russell Road location. MGM spokesman Lynn Holt said resort executives prefer racing at the existing speedway rather than see another racetrack built.

Holt added that based on previous experience in Las Vegas a Formula One race "would not be a financially viable event." He noted that MGM Grand Inc. Chairman Terry Lanni was an executive at Caesars Palace in the early 1980s when that resort hosted F-1 races in its parking lot. Hotel executives stated they ended their affiliation with racing after four years because the events created traffic jams and produced a disappointing level of gaming activity.

But Mirage Resorts Chairman Steve Wynn continues to believe that F-1 racing could succeed in Las Vegas. Wynn considered hosting a race on the Strip in 1996 but later declined because of a lack of support from competing hotels.

Mirage spokesman Alan Feldman said that in terms of resort exposure it would still be preferable to run the race down the Strip. But he said the resort supports the Russell Road location.

Baker's plan is to host the race each November beginning the year 2000. The three-day event would include practice runs on Friday, qualifying on Saturday and the race on Sunday. Because seven-tenths of a mile of the proposed 2.9-mile racing circuit would run on the Strip south of Russell Road, that portion of the road would be closed to traffic for about eight hours on each of the three days.

Temporary bleachers would be erected two weeks before the race and would be taken down within a week after the event. When not used for racing, most of the 2.2 miles of racetrack within the development would be converted into golf cart paths.

Another aspect of the racetrack proposal drew strong opposition from Sloan of Circus Circus in a May 4 letter he wrote to the county commissioners.

"While we were originally told that the (Formula One) proposal would contain only one day of racing, we are now informed that the proposal contains an element for nightly 'go-cart' style activity, which we would certainly oppose," Sloan wrote.

Baker said he would be willing to eliminate the go-cart activity if, after a test run, the resort still complained about the noise level.

* The county commission ultimately broadened its approach by soliciting proposals for a public golf course and another compatible recreational activity. As part of the deal, the winning developer must allow the 18-hole course to be used as the home links for the UNLV golf team, which won the NCAA championship earlier this year.

Baker said he was encouraged by Rogich to meet with Walters to discuss a potential partnership. Baker said the meeting took place in February at Walters' Desert Pines course.

"He's a tremendously bright guy," Baker said of Walters. "But I told Sig (Rogich) I couldn't make a business deal with this guy."

Baker said that in return for agreeing to build the Strip golf course, Walters offered to lease the course to the Grand Prix team for $100,000 a year for its F-1 race. Baker said what turned him off was a suggestion from Walters that the lease would enable the Grand Prix team to avoid having to open its books to the county.

Baker said he couldn't agree to that because he had already told county officials that the race would gross at least $44 million a year. He said he promised that the government cut of that would be 1 percent, or $440,000.

"He (Walters) offered a straight-up, palatable business deal," Baker said. "He made an offer most people would have acquiesced to. But he said, 'Don't show them your books. You don't have to.' I had already met with the county, so to come back with a partnership that would hide all that, I couldn't do it."

Walters angrily repudiated Baker's version of the meeting by saying that no such business offer was made. Walters said the only business proposal he discussed was with Rogich. Walters added that it was he, not the Grand Prix group, who pulled out of the deal after meeting with various local officials.

"I talked to (president) Manny Cortez of the Las Vegas Convention & Visitors Authority," Walters said. "I talked to (aviation director) Randy Walker. I was told there was no support for the race track at that (Strip) location.

"Mr. Walker was concerned about the bleachers and lighting and planes taking off (over a race crowd). Cortez said that although a Formula One race would be good, it wouldn't be good at that location."

* Having gone his separate way from Walters, Rogich included in his Grand Prix proposal a March 16 letter that he solicited from Cortez.

"On behalf of the Las Vegas Convention and Visitors Authority, we support your efforts with the Grand Prix/Formula One Race," Cortez wrote. "This event appears to contain all of the elements that we seek."

The LVCVA has supported motor sports, including sponsorship of the Indy Racing League event at the speedway last Oct. 11.

Privately, however, Cortez was said to have become upset that Rogich showed the letter to county officials as if the LVCVA was supporting the specific Grand Prix proposal. If that was the case, it would put Cortez on the spot, particularly with hotel owners such as Bennett who are vehemently opposed to the project.

In clarification, LVCVA spokesman Rob Powers said the authority supports only the concept of a Formula One race.

"The intent of that letter from Mr. Cortez was never to support that location specifically but from the destination point of view the concept of such a facility, recognizing that such a facility would have benefits for the entire destination," Powers said. "We can't be property-specific or location-specific on things like this.

"Manny has had several conversations with Sig on this topic and is comfortable that Sig is representing it (the letter) in the way that Manny intended."

The public should learn in September whether Baker, Ecclestone and other Formula One supporters can convince the county commission that the race is a perfect fit for a world-class resort destination. Walters and the Player/Club Corp. groups certainly hope for a different conclusion.

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