City gives downtown project deadline for tenant

Erin Neff

Friday, April 7, 2000 | 10:35 a.m.

Neonopolis developers have less than 90 days to sign an anchor tenant or the city will call off the deal, Mayor Oscar Goodman said Thursday.

The recent completion of the subterranean parking garage sets in motion the ticking clock for World Entertainment Centers to begin construction of the three-story entertainment center downtown.

But the company hasn't had an anchor tenant since Mann Theatres pulled out of the project last November because its parent company filed for bankruptcy protection.

The project, seen as a keystone for downtown revitalization efforts, has spent close to six months seeking a replacement movie theater operator to no avail.

Under terms of the development agreement between the developer and the city's Redevelopment Agency, construction on the center must begin within 90 days of completion of the garage -- as signified by an architect's certificate.

If any portion of the development agreement is not met, a breach in contract will occur.

"They have a lot of money in this, and I'm going to be as cooperative as I can be," Goodman said. "But if they're going to be in breach, the deal is off."

Stacey Lied, vice president of the City Centre Development Corp., said contractors reached substantial completion on the garage March 21. A structural engineer's completed record was expected by Thursday.

"It triggers us notifying Prudential," Lied said.

Prudential Insurance Co. is financing the project, and took over leasing efforts early this year.

For months Goodman has been told to expect a signed tenant within weeks. He was expecting to hear good news Thursday from the project's lead lease agent Joyce Storm.

But Robert Gorlow, president of World Entertainment Centers, said this week there's no progress to report.

"There's been no change," Gorlow said. "We continue to seek and explore a replacement tenant for Mann."

Granite Construction finished a substantial portion of the garage in January. However, several structural engineering items had to be rectified before the certificate was issued.

Two weeks ago Goodman poked fun at the status of garage construction by making sweeping motions with his hands and joking that contractors were finding little items to work on to delay the start of the 90-day time period.

But he admitted Thursday his patience is wearing thin on the project dubbed "a block-long of fun" on the fence surrounding the construction zone at Las Vegas Boulevard and Fremont Street.

"I'm going to be tough," Goodman said. "I've been the mayor for eight months now, and I've been told for eight months that everything's under control. It's not under control."

Neonopolis was having trouble leasing tenants even before Mann pulled out. The project was originally supposed to open on Thanksgiving but had only signed Mann by early last year.

At the time, World Entertainment Center's vice president Rob Snowden said he expected leases by May of 1999 when a large shopping center convention was in town. That convention came and went without any leases getting signed.

When Mann pulled out of the $99 million project, Snowden said interested tenants were waiting for the anchor tenant to sign.

Las Vegas is the third leading movie theater market in the nation.

Brian Callahan, spokesman for General Cinema in Boston, said his national chain knows Las Vegas well.

"We are very familiar with Las Vegas because of the strong market there and because of the ShoWest Convention each year," he said.

Callahan refused to comment on whether General Cinema was interested in the Neonopolis site, saying only that his company is "approached quite a bit."

Calls to more than 10 other national chains, including AMC Theatres, Century theatres, Loews Cineplex, Regal Cinemas and United Artists Theatres, produced similar answers.

None of the chains was willing to discuss possible future sites before contracts had been signed.

If developers are unable to secure a tenant, millions of private and city funding will be in flux.

The city, which was responsible for building the parking garage and assembling the parcels of land, will spend $34 million in bond money on Neonopolis. Prudential will fund the remaining $64 million.