City makes final payment on Neonopolis project

Diana Sahagun

Wednesday, March 6, 2002 | 11:09 a.m.

A $1 million payment to developers of the downtown Neonopolis project signals the city of Las Vegas' final major financial commitment to a project many say is the key to redevelopment in the city's core.

In fewer than 60 days the 240,000-square-foot, $99 million project critics said would never be realized will open to the public at Las Vegas Boulevard and Fremont Street. The project will include retail shops, restaurants, movie theaters, bowling lanes and parking.

The City Council today is expected to make its last major payment for the project, $1 million, to World Entertainment Centers for shared construction costs, capping the city's $40.5 million investment.

The project is something of a gamble, city leaders acknowledge, because the city doesn't expect to recoup its investment for 20 years and because Neonopolis' success will pave the way for other redevelopment efforts.

"It's probably one of the most important projects in the downtown area because, not so much it being there, as much as it succeeding," Mayor Oscar Goodman said. "It must succeed or else everything we've been talking about down here is going to have a very bumpy road."

Goodman said Neonopolis' opening in May comes at a critical point for downtown redevelopment, noting that the city plans to develop 61 acres west of downtown that will ultimately link up with the Fremont Street Experience.

City staff members are also planning a new entertainment district in a six-block area across from Neonopolis by tweaking an ordinance allowing bars and nightclubs to be clustered downtown.

Former Mayor Jan Jones, who oversaw the beginning of the project, said what made Neonopolis attractive when it was proposed was that it combines retail with entertainment.

"We always believed that if you were really going to bring people back to downtown you had to have a variety of attractions -- entertainment, gaming, and a retail component," said Jones, senior vice president for communications at Harrah's Entertainment Inc. "Neonopolis gave you all of those elements. It's another reason to either come downtown or to stay a little longer."

The city budgeted $40.8 million for the project, Deputy City Manager Steven Houchens said. It's one of the most expensive redevelopment projects to date, although the city spent nearly $45 million to build the Fremont Street Experience, he said.

The $1 million payment is for "shared costs," improvements that the contractor put in to build the three-story Neonopolis, which also benefit an underground parking garage built by the city. Houchens said the city had budgeted $1.7 million for the shared costs.

This will likely be the last large payment by the city, which has invested $40.5 million in the project, including $23 million for the land at the corner of Fremont Street and Las Vegas Boulevard, and $15 million for construction of an undergound parking garage, Houchens said.

The remaining money was spent on consultants, architects and a $405,000 settlement with Granite Construction.

The city's last major payment marks a milestone as the project ran into criticism when it was first proposed in 1998. Goodman inherited a project he didn't support and grew frustrated with delays that pushed it past its November 2000 opening. At one point, he threatened to take over the project.

Construction was delayed when the project's first anchor tenant, Mann Theatres, pulled out after its parent company filed for bankruptcy.

Despite the setbacks a new anchor tenant was signed in May 2001. Connecticut-based Crown Theatres will open a 14-screen mutiplex on the third level of the complex. Additional tenants announced in recent months include ARK Restaurants -- which has locations inside The Venetian, Desert Passage and the Forum Shops at Caesars -- La Salsa, Panda Express, Wetzel's Pretzels and Muscle Beach Lemonade, which includes Hot Dog on a Stick.

Jillian's, a Louisville, Ky.-based company, will be a major tenant with its venue offering a restaurant, bowling lanes, billiards tables and a dance club featuring live music.

"I think there will be a tremendous benefit downtown just by having a whole bunch of new places to go and eat, the entertainment with Jillian's, and movie theaters, there is a tremendous entertainment value," Houchens said.