Venetian’s bid to block LVCVA bond authority goes to court

Monday, Oct. 4, 1999 | 11:36 a.m.

Attorneys for the Venetian hotel-casino and the Las Vegas Convention and Visitors Authority have argued all summer about what they want and don't want to be presented in a trial over the expansion of the city's convention center.

Tuesday, it all comes down to one question: Does the LVCVA have the authority to issue bonds to pay for the expansion without having the public vote for it?

District Court Judge James Mahan will hear arguments from Venetian attorney Stephen Peek and LVCVA lead counsel Steve Morris about the approval of the 1.3-million-square-foot South Hall expansion, authorized in an LVCVA board meeting vote April 27.

Primarily at issue is the LVCVA's approval of the funding mechanism for the $150 million cost. At a June 22 LVCVA meeting, board members voted to approve the expansion through revenue bonds allowed in statutes approved only a month earlier by the Nevada Legislature.

Mahan has expressed from the bench how important he thinks the case is. Because the LVCVA is attempting to get the expansion built as quickly as possible, Mahan has put the case on the fast track, ordering attorneys to spend about 45 days to gather information instead of the more conventional 90 days. He's also asked attorneys to keep their legal briefs short and to the point.

Convention business is one of the cornerstones of the LVCVA's efforts to increase the number of visitors to the city. By having the expansion in place, the LVCVA would make it possible to conduct more than one major trade show at a time or allow a major convention to set up at the same time another closes down.

The Venetian filed its lawsuit against the LVCVA in July and in the meantime has stepped up its campaign to explain its motives. When the Venetian opened in June, it began implementing its own business strategy -- to lodge conventioneers attending shows in its own Sands Expo Center adjacent to the hotel-casino.

Since the middle of summer, the Venetian has made several announcements about signing trade shows to contracts at the Sands Expo Center, including the Sporting Goods Manufacturers Association Super Show.

The LVCVA argues that as a public agency, its responsibility is to fill hotel and motel rooms all over Clark County and the expansion of the convention center is just one way to accomplish that. The Venetian, meanwhile, says room taxes it helps generate shouldn't be used to compete against its own private convention business.

In the time leading up to Tuesday's trial, expected to take up to three days, legal proceedings have taken several twists and turns.

The biggest diversion has been the Venetian's contention that the LVCVA might have violated the state's open-meeting law by conducting briefings for board members in advance of their critical votes on the expansion.

Mahan felt there was enough substance in the Venetian's argument to allow Peek to take depositions from former Mayor Jan Laverty Jones, who was the LVCVA's board chairwoman at the time of the votes, and six other members or former members of the board.

Predictably, the two sides differed over the value of the depositions. Peek said there were telling comments about how board members were briefed and that LVCVA executives built a consensus of opinion on the expansion and the bonds in the briefings.

The LVCVA countered that at no time did executives solicit an affirmative vote on the expansion or the bonds.

They also ridiculed some of Peek's deposition questions, such as questions involving Jones' hair stylist. Peek defended this line of questioning, saying it would have led to something substantial.

Peek was so convinced that the deposition comments were significant that he sought subpoenas for every member of the board at the time of the votes and of several LVCVA executives.

But the judge was unconvinced. Friday, he ruled in favor of the LVCVA's motion to quash the 14 subpoenas and decided there would be no witnesses presented in the trial.

Mahan left the Venetian attorneys some wiggle room. In addition to hearing oral arguments from both sides and admitting records from the two critical LVCVA board meetings, the judge agreed to the submission of the depositions Peek has taken and affidavits from any experts the parties want to put forward.

"I won't foreclose anything," Mahan told the attorneys Friday. "(You can) put these issues on the table and (I'll) see if there's something there."

The judge's decision represents a setback for Peek, who had planned to put sworn witnesses on the stand and pull in each LVCVA board member in an effort to prove the agency violated the open-meeting law and that the bonds the board approved are a form of general obligation bond, not revenue bonds.

The LVCVA's lead attorney was also frustrated. Morris is concerned that Peek would attempt to introduce evidence that would supplant the existing record. The LVCVA has long battled the Venetian's attempts to fish for records and put the board members on the stand, saying the meetings were properly noticed and the Venetian had ample opportunity to comment at them.

Morris said the briefing of board members is a routine practice.

"The Venetian's position is that the board has to be as stupid as stumps before they go in to make a decision," Morris said.

The LVCVA is being joined by attorneys for the Culinary Union as intervenors in the case -- both are in constant battles with the Venetian.

Some of the Venetian's disdain for the Culinary on employee representation and sidewalk picketing issues has spilled into the courtroom in heated exchanges between Peek and Culinary attorney Richard McCracken.

And, while the proceeding is expected to take less than a week to complete, no one -- including Mahan -- expects this to be the final word in the courtroom.

Peek has said if the Venetian does not prevail, the ruling would be appealed. The LVCVA also is expected to appeal if the case doesn't go its way.

Mahan, meanwhile, said he welcomes having an appelate judge "looking over my shoulder" in this case because of its importance to the community. He has said on several occasions from the bench that he expects whatever ruling he issues to be heard again in Carson City.