Sportspark co-owner says city’s audit unfair

Erin Neff

Wednesday, Aug. 16, 2000 | 11:20 a.m.

Two partners of Las Vegas Sportspark told the Las Vegas City Council this morning they could not comment on an audit report that shows a $5 million debt because they themselves haven't seen the center's financial books.

Larry Scheffler, a 6 percent owner, and Linda Fernandez, a 58 percent owner, said they have been shut out of information.

"We actually welcome the audit because we have not been shown the books," Scheffler told the council.

Mayor Oscar Goodman was disturbed at the apparent lack of communication among the centers' three partners.

"I think you better get your act together, sooner than later," he warned partner Don Schlesinger, who has been the one responding to the city's audit.

Schlesinger, a 36 percent partner in the recreation facility, called the audit "politically motivated" and said he can see no other reason why city auditors "slanted" a report and refused to insert his responses to 10 different items in the final copy.

For weeks City Hall officials have alleged Councilman Michael McDonald was trying to push through a sale of the private-sector portion of the public-private partnership to help benefit his employer.

Now Schlesinger, armed with an inflammatory audit report against his business, is using those same allegations to claim the entire probe was politically motivated.

"It doesn't take a rocket scientist to see there is certainly a slant or bias in this audit," Schlesinger said in an interview. "It contains half-truths, and at no time were any of the drafts truthful or complete."

Schlesinger said McDonald toured Sportspark in May with his friend Rick Rizzolo, the owner of the Crazy Horse Too strip club, in hopes of brokering a sale.

The park's majority owner, Linda Fernandez, and the other minority owner, Larry Scheffler, are business partners through Las Vegas Color Graphics. McDonald works directly for Scheffler.

McDonald said he only toured Sportspark to determine whether the facility could serve as host site for a proposed charity softball tournament. That event never took place.

When council members last month began discussing a proposed sale of Sportspark -- a discussion that led to the current audit -- McDonald recused himself from the talks citing Scheffler's interest in the company.

He also abstained from participation today when the council heard from its auditors and Schlesinger.

Schlesinger's initial argument was that the audit, conducted by Senior City Auditor Philip Cheng, was unfair.

McDonald fronted Cheng's name to the top of a candidate pool for the City Auditor position earlier this year, even though personnel officials had determined Cheng was not as qualified as the outside candidates.

McDonald said he appreciated Cheng's service to the city as acting auditor and thought he was capable of the job. Radford Snelding was subsequently hired as city auditor. The Sportspark report is the first audit made public during his two months at the city.

Some, including Schlesinger, believe the entire audit function's independence should be questioned.

"The auditor doesn't report to the city, the auditor reports to the council, which is his boss," Schlesinger said. "That calls into question whether the auditor is willing to say something that puts the city in a bad light."

The park, located at Rampart Boulevard and Vegas Drive, was built with private funds, but sits on land the city leases from the Bureau of Land Management. Under terms of the 50-year deal, Sportspark pays the city a fee for the land each year.

"This is the sweetheart deal that wasn't," Schlesinger said. "It's been five years (from planning stages on), and we haven't made one dime yet."

The audit found the park owed its lender, CTI Group, $5,223,966 by Aug. 3. Schlesinger doesn't dispute that, saying only that Sportspark is working with its lender to resolve issues.

The report also highlights $170,000 in construction liens against the year-old center and questions the facility's payment of property taxes, water bills and licensing fees.

Schlesinger has written a point-by-point response to 10 items he believes auditors failed to mention.

For example, Schlesinger said, one of the largest construction liens -- a $138,000 lien from Whodunnit Plastering -- has been settled. He said he made Cheng and Snelding aware of that but saw no mention of his response in the final audit.

"There were dozens of changes that Radford Snelding agreed to make when I met with them about the draft audit," Schlesinger said. "Those assurances made were not kept."