LVCVA in deal to buy World Trade Center

Grace Leong

Tuesday, Jan. 9, 2001 | 11:27 a.m.

The Las Vegas Convention and Visitors Authority board today approved the purchase of the 310-room World Trade Center hotel for $14.1 million.

The LVCVA wants the property on Desert Inn road to accommodate operations and possibly future growth of its nearby Las Vegas Convention Center. The LVCVA, which plans to demolish the hotel, would use the space for parking, to free up parking at the convention center and for warehouse needs.

But the widow of late U-Haul International Inc. founder Leonard Shoen, once the owner of the hotel, is in a legal battle with his children and his estate's administrator, Shawn King, over whether the hotel should be sold for the proposed $14.1 million and how the sales proceeds should be split.

In a probate court hearing Monday, Carol Shoen, the second wife and sole heir to Leonard Shoen's estate, said the World Trade Center, which was appraised as a hotel-casino at $22 million, lost about $8 million of that value because King allegedly rejected her proposal to bring in a gaming operator, Green Valley Casino Corp., before the hotel's gaming rights expired in April 2000.

"King's job is to maximize the estate's returns and to make sure Carol Shoen gets paid more than the Shoen children. But he did nothing to preserve the hotel's gaming rights and rejected Carol Shoen's marketing plans to help boost hotel occupancy and room rates," said Mark Kemp, Carol Shoen's attorney.

King declined comment on the allegations.

The LVCVA, whose first offer of $10 million at a Sep. 14 auction of the hotel was beaten out by a $10.1 million offer from an unidentified party, reached a tentative agreement with the hotel's owner, Amerco Entrepreneurial Institute Inc., in late December to buy the World Trade Center for $14.1 million.

The purchase is subject to approval by the probate court. The LVCVA raised its offer to $14.1 million after Amerco, in mid-December, reopened discussions with the LVCVA after getting an appraisal of $14.34 million from appraiser Gary H. Kent.

Carol Shoen said she is protecting her claim to voting rights to half of the stock of hotel owner Amerco Entrepreneurial and to the proceeds of the hotel's proposed sale by fighting alleged attempts by hotel creditor Katabasis Inc. to pressure Amerco into quickly selling the property at a low price.

Katabasis is owned by Samuel Shoen, one of Leonard Shoen's children.

Mark Solomon, King's attorney, said both King and Carol Shoen, who had initially assumed the World Trade Center could be operated as a viable gaming property, had hoped to get at least $18 million through the Sep. 14 auction.

"Although the World Trade Center is in a gaming corridor, Shawn King, after conducting an analysis, concluded that it isn't feasible to operate the hotel as a gaming property, and this was a factor that greatly affected the appraisal value of the property," Solomon said.

Solomon, who said the World Trade Center "isn't doing well financially," said: "Amerco Entrepreneurial's cash reserve isn't going to last that long. It's in everyone's best interest to to sell the property and get the parties to decide on how to split the proceeds."

But Kemp disputed Solomon's claims. "This is an issue about control. They just want to sell the property for $14.1 million and then force Carol Shoen to litigate with the children over who gets what. They didn't tell us about the $14.3 million appraisal or the LVCVA offer of $14.1 million until today (Monday) at the court hearing."

"The question now is 'Do we sue Shawn King and Samuel Shoen for losing the World Trade Center's gaming rights and in turn, causing the hotel to lose $8 million of its appraisal value?"' he asked.

The legal dispute over the rights to the proceeds of the hotel sale involves claims by three of Leonard Shoen's children, who said they loaned $8 million to his company, Amerco Entrepreneurial, from April 1997 to January 1998.

The three children, Samuel and Michael Shoen and Cecilia Shoen Hanlon, who said in a June 2000 lawsuit that Carol Shoen allegedly told Samuel Shoen the claims of Shoen's estate should take priority over any claims by the Shoen children, won an order that freezes the distribution of funds from the hotel's sale.

Carol Shoen also disputed Samuel Shoen's decision to award a $66,250 severance package to the hotel's former general manager, Norma Colwell, whom Carol Shoen accused of "turning away customers, reducing the hotel's income" and allegedly refusing to enter into an agreement with Green Valley Casino Corp. to preserve the hotel's gaming rights.

Probate Judge Gene Porter ruled Monday that King will continue to run the estate and approved the $66,250 severance payment to Colwell -- but said the sale of the World Trade Center is still subject to his approval.