LVCVA loses bid to buy World Trade Center

Grace Leong

Friday, Sept. 15, 2000 | 11:20 a.m.

An unidentified party bid $10.1 million for the World Trade Center hotel in Las Vegas on Thursday, beating a $10 million offer from the Las Vegas Convention and Visitors Authority.

The World Trade Center, on Desert Inn Road near the Las Vegas Convention Center, was owned since 1996 by the late founder of U-Haul International Inc., Leonard Shoen, who died in 1999 in a one-car accident ruled suicide by the Clark County coroner's office.

David Atwell, a hotel-casino broker who attended the auction, said the World Trade Center "has been problematical for many years."

"None of the previous owners have been unable to operate it at high efficiency. It falls into the category of a difficult property and the outcome of the auction is yet to be determined," Atwell said.

Eric Nelson Auctioneering, which auctioned the property, declined to reveal the buyer's identity or the buyer's plans for the property.

"The buyer doesn't want to talk about its plans. The buyer has to wait 72 hours for the seller to confirm the sale," said Eric Nelson, the auctioneer's broker.

The auction, which was attended by at least 50 bidders and observers, included for sale a 310-room hotel, a 10,000-square-foot office building and a 20,000-square-foot warehouse. The liquidation includes a second auction to be held Sep. 16 of hundreds of thousands of dollars worth of art and gift shop inventories.

Rob Powers, the LVCVA's spokesman, said the LVCVA was interested in acquiring the property to expand its convention space and parking area. "Our master plan calls for us to expand and there's only so much land adjacent to our property."

"Had we acquired the property, the hotel would not have remained there and we would have used the land to expand our parking and convention meeting space," he said. "Any acquisition would have been subject to approval by LVCVA's board."

Samuel Shoen, one of Leonard Shoen's three children, said his father decided in June 1999 to sell the hotel after he withdrew his application for a non-restricted gaming license at the World Trade Center.

Meanwhile, Eric Nelson Auctioneering said a pending lawsuit over the distribution of funds from the sale of the World Trade Center isn't expected to affect the sale.

But questions remain over the distribution of the sales proceeds.

"The lawsuit has no bearing on the sale," Eric Nelson said. "The funds are either held in escrow pending litigation or are disbursed to the appropriate administrator for the Leonard Shoen estate, and then distributed according to the outcome of the action."

The three children of Leonard Shoen won an order on July 10 that freezes the distribution of funds from the sale of the World Trade Center.

But the order allows the hotel's current owner, Amerco Entrepreneurial Institute Inc., to "disburse funds from its cash account and or operating account for the hotel's day-to-day operations."

Three companies, controlled by Samuel Shoen, Michael Shoen and Cecilia Shoen Hanlon, which said they loaned $8 million to Amerco from April 1997 to January 1998, filed a lawsuit on June 28 after a dispute arose with Carol Shoen, Leonard Shoen's second wife and sole heir, over whose claims have priority to the proceeds of the sale of the World Trade Center.

The lawsuit said Carol Shoen allegedly told Samuel Shoen that the claims of Shoen's estate should take priority over any claims by the Shoen children's companies.

But the plaintiffs, who also asked for a freeze on $1.3 million they claim is held by Amerco, said they feared the cash on hand and proceeds from the sale of the World Trade Center won't yield sufficient funds for Amerco to cover its debts to them and Leonard Shoen's estate.

They claimed Leonard Shoen agreed in May 1998 that all debts owed by AEI would be subordinate to claims by the plaintiffs' companies.