Wynn loses battle on display of art

Wednesday, Oct. 7, 1998 | 11:20 a.m.

CARSON CITY -- When Steve Wynn's Bellagio hotel-casino opens next week on the Las Vegas Strip, patrons who visit the art gallery will be charged $10 to view nearly $300 million worth of masterpieces by the likes of Picasso, Matisse, Renoir and Gauguin.

After losing a battle with the Nevada Tax Commission, Wynn said Tuesday he will decide later whether to allow free public viewing for 700 hours a year in order to qualify for a $1 million personal property tax break.

The commission's regulation states admission must be free during the public viewing time to claim the exemption, however, Wynn can charge an admission at other times. Wynn had asked the commission to reconsider the rule that was adopted in August to allow him to charge admission at any time.

After the commission voted 5-3 against him, Wynn said, "We gave it our best effort."

Wynn, who said there was nothing in the law that prohibited fees being charged, added he didn't have the energy or time to purse the issue further.

But hours later, Alan Feldman, spokesman for the Bellagio, said there was a possibility of a lawsuit to challenge the decision.

"We think they (the commission) overstepped their bounds," Feldman said.

Feldman added the first order of business is the opening of Bellagio Oct. 15.

The vote represented a victory for Sen. Joe Neal, D-North Las Vegas, who led the fight to eliminate any fee during the required hours of public viewing. He said the exhibit was an "attempt to lure high rollers to the establishment."

Neal, who voted against the tax exemption in the 1997 Legislature, said he would like to see it repealed.

A 1977 Nevada law says those who buy a masterpiece for more than $25,000 are entitled to an exemption on sales and use tax as well as personal property tax as long as it is displayed for public viewing at least 20 hours a week for 35 weeks. The exhibit also must be available for educational purposes, and public schools must be notified about who to contact to set up visits.

Voting to require the free public viewing were Chairwoman Barbara Smith-Campbell, Candace Evart, Valerie Cooke, Harley Harmon and John Marvel. Opposed to the no-admission policy were Robinson, Charles Lenzie and Dean Baker.

The regulation adopted Tuesday is temporary and is good for one year. Smith-Campbell said it would come up for review in November 1999.

The Bellagio will be open from 9 a.m. to midnight and is estimated to have 1,500 to 1,800 visitors a day. There would be discount prices to some groups, Wynn said.

During the two-hour hearing Tuesday, there were conflicting reports on the amount of the tax break.

Neal said it would amount to $18 million, but Wynn said he is a registered art dealer and doesn't pay sales tax when he buys a painting. At issue, Wynn said, is the $1 million personal property tax exemption each year.

Under Nevada law, a person can buy goods from outside the state and hold them as inventory in Nevada without being assessed the sales and use tax. The tax must be imposed only when the goods are sold.

"I could close the gallery and show it only to high rollers (and qualify for the sales and use tax exemption)," Wynn told the commissioners. "This populous 'Don't let the rich guy get away with something' is inexplicable to me."

This is an opportunity, he said, to give the public a chance to see fine art. He added the issue of admission fees isn't that important to the Bellagio, but it will help other galleries which may acquire highly priced pieces of art and face the high costs of security and maintenance.

"Wynn is going to have enormous expenses -- climate control and armed guards," said Peter Stremmel, who runs an art gallery in Reno. "You can't see works like these short of the East Coast. It's appropriate to charge a fee."

Wynn also received support from Bob Ostrowsky, representing the Nevada Institute for Contemporary Art. Ostrowsky said this could encourage others to bring their collections to Nevada for display.

"You can't display art without funding," he said. Ostrowsky stressed he was speaking for the institute and not for the gaming industry for which he is a lobbyist.

The commission received a letter from Assembly Speaker Joe Dini, D-Yerington, who sponsored the art exemption bill. He doesn't want to see school children charged a fee, but he added the museum must be able to collect on an admission to cover security, insurance and climate control costs.

"Prohibiting these galleries and museums from recovering these costs if they take advantage of AB536 would in my opinion, render the incentives provided in the law useless," he said.