Venetian-LVCVA trial ends; ruling due soon

Wednesday, Oct. 6, 1999 | 11:35 a.m.

District Court Judge James Mahan will rule by Monday whether the Las Vegas Convention and Visitors Authority can issue bonds to pay for a convention center expansion without a vote of the public.

Although the judge scheduled three days of trial for presentations by attorneys for the LVCVA and the Venetian hotel-casino, both sides wrapped up their courtroom arguments Tuesday.

Mahan told attorneys he would take the case under advisement and issue a ruling by Monday. He said he would fax his decision to the lead attorneys in the case, Steve Morris for the LVCVA and Stephen Peek of the Venetian.

Both attorneys said Tuesday they were optimistic about winning the case after presenting more than six hours of testimony.

"I'm very pleased that we were able to make our arguments in this case," said Peek, whose client sued the LVCVA in July after the agency's board of directors voted to issue $150 million in revenue bonds to pay for the 1.3 million-square-foot expansion of the Convention Center's South Hall. "We're still very confident we will win."

"I think it went well for us," Morris said. "We're confident we did the right thing in presenting these arguments for the good of the community."

Judge praised

Both attorneys praised Mahan, who gave both sides considerable legal latitude in making their cases while not allowing them to call witnesses. Mahan said he wanted to focus on the existing records and documents and not introduce expert testimony unless its relevance could be proved in advance.

Mahan said he would review affidavits filed in the case, seven depositions from current and former members of the LVCVA board, documents from the board meetings at which critical votes were taken as well as the arguments made in court Tuesday.

Top executives with the LVCVA were in the courtroom gallery to hear the two sides argue the case. When the hearing was over, they declined comment pending the issuance of the judge's decision.

The Venetian, which has a private competing convention business at the Sands Expo Center, based its case on two primary arguments.

Peek said the revenue bonds the LVCVA board is attempting to issue are actually special general obligation bonds that would require a vote by taxpayers. He also argued that the LVCVA violated the state's open-meeting law in its deliberations on the expansion program and the decision to bond for the project.

Few new revelations came out of Tuesday's hearing, since both sides have argued key points during procedural motions over the past two months.

Resort's view

Peek offered the Venetian's interpretation of the events leading to the LVCVA board's June 22 vote to issue bonds. The LVCVA had considered the up-front rent proposal before opting instead to issue bonds on the project, the largest in the LVCVA's history.

Peek characterized the rent plan as a form of "corporate welfare" for the coalition of nine trade shows. He said the LVCVA played into the coalition's hand by believing the shows would book convention facilities in other cities if the expansion wasn't built.

He said the LVCVA was obsessed with the "If-you-build-it-they-will-come" philosophy and panicked like Chicken Little obsessing over "the sky is falling" when the coalition considered moving shows elsewhere.

Many of the shows did end up moving -- to the Sands Expo Center. Peek said coalition members were upset at having to pay 15 cents more per square foot for exhibition space at the Sands Expo Center "because they could have gotten corporate welfare from Mr. (Manuel) Cortez (president of the LVCVA).

"The shows moved to the Sands and the sky did not fall," Peek said.

Peek said the LVCVA had poor long-range plans and had "a moving target" price tag on the expansion. He said the agency failed to produce documents justifying expenditures and that it did not have fundamentally sound financial data.

Because the agency has no net revenue after convention service expenses, Peek contends that the LVCVA has to rely on tax revenues to support bonds. That's why he believes the bonds the LVCVA is issuing would technically be general obligation bonds, which require a public vote.

But the LVCVA considers room taxes to be a form of revenue it generates. That's how it justifies using a new state law authorizing the issuance of revenue bonds for convention center projects.

A team of attorneys working with the LVCVA took turns dissecting Peek's arguments.

Morris said the LVCVA has carried out its mandate to attract visitors to the city "like no other city in the state or anywhere" with its efforts to expand the Convention Center.

The Venetian, Morris said, is bitter because the LVCVA didn't vote its way. The resort, which opened its doors in June, and the Nevada Concerned Citizens, a nonprofit group that joined the Venetian in the suit, should direct their ire at the Nevada Legislature, Morris said. Lawmakers passed the bill allowing revenue-bond financing and the plaintiffs vented their anger at the LVCVA instead, he said.

LVCVA analyses

Morris showed spreadsheets and financial analyses that were discussed in open meetings, explaining the financing options presented to the LVCVA board. He said details of the expansion plan have been a part of the agency's master plan since the early '90s, all of it on the public record.

Morris said the new revenue bond legislation clearly gives the LVCVA authority to issue the bonds without a vote and there may have been some initial confusion about that because the final version was approved, signed by the governor and forwarded to the LVCVA within a span of four days.

On the allegations of open-meeting-law violations, Peek said the LVCVA staff conducted briefings with board members to build a consensus of opinion prior to critical votes. He said it was apparent that the staff's effort was to build an "us-against-them" mentality because one board member who didn't support the bond issue, former Mesquite Mayor Ken Carter, wasn't even invited to a briefing.

Attorneys Todd Bice and Deputy Clark County District Attorney Bob Gower defended briefings of board members as long as a quorum doesn't attend. They said briefings were crucial to having an informed board vote on issues of community importance. They disputed Peek's assertions of a "walking quorum" because the staff never solicited nor did board members ever give opinions or promises of support on issues discussed.