Las Vegas Sun

March 28, 2024

MGM Grand sues to block time-share tower

MGM Grand has filed suit to halt the construction of a 43-story time-share tower proposed next to the resort on the Las Vegas Strip, saying the high-rise will violate the privacy of its high-roller villas next door and violates a business contract drawn up between its neighbors eight years ago.

The suit in Clark County District Court is the latest development in the resort's steadfast opposition to the project. Since the tower was announced in January by Orlando developer Westgate Resorts, MGM Grand parent MGM MIRAGE has fought the development on the basis that it is too large to fit on the space proposed.

The tower has been twice approved by the Clark County Planning Commission but has been appealed to the Clark County Commission. It was pulled from the commission agenda in January and again in March so that Westgate Resorts could propose a scaled-down tower for approval. The project would feature 688 rooms within 492 units, towering over the rest of the Strip at about 447 feet. It would be built on 2.5 acres in front of the Showcase mall's parking garage and next to where a Denny's restaurant now sits.

The original proposal called for 962 units as well as a host of development waivers. The waivers, which have since been reduced in number, had included increasing the height of the project to 560 feet where 100 feet was permitted, reducing required parking to 1,500 spaces where 2,142 spaces were required and reducing setback requirements from the Strip sidewalk to 5 feet from 15 feet for a terrace. Clark County planning staff had recommended denial of the project to the Clark County Commission on the first-go around, saying the scope of the project would negatively affect traffic flow in the region. The smaller design was again appealed by county planners in May, this time because the project has "significant impact" to warrant commission approval.

The tower is proposed on land already zoned for hotel-resort development and, unless appealed, only requires a use permit from the planning commission to move forward. Casinos routinely receive development waivers from the commission to build megaresorts on the Strip.

The tower faces a final vote by county commissioners Wednesday.

MGM Grand's suit alleges the project violates a 1995 contract that forbids the construction of a hotel "or any other lodging facility, whether temporary or permanent" on Showcase mall property.

The contract also limits the use of mall parking for occupants of the mall and MGM Grand. Westgate Resorts, which is developing the time shares for land owner LH&R Las Vegas Investors and long-term lease holder FCM Ventures, wasn't a party to the contract and isn't entitled to benefits under the agreement, the suit said.

But Showcase disputes MGM Grand's interpretation of the contract, which may not be as broad in scope as to prohibit the development, said Bob Unger, president of Makena Cos., the managing partner of FCM Ventures and the Showcase mall.

Unger declined to comment further on the suit, saying he had not yet been served as of late Monday and has not reviewed the matter with his attorneys.

MGM MIRAGE notified the mall both verbally and in written form as early as January about the company's concerns with the contract.

Contractual disputes, unlike zoning concerns, "are matters for the courts to decide," MGM MIRAGE spokeswoman Yvette Monet said.

Officials at Westgate Resorts, the largest privately held developer of time-share units nationwide, could not be reached by press time.

Las Vegas resort broker David Atwell said Westgate is committed to Las Vegas and will have "a major Strip presence within a year."

Atwell helped broker a deal for Westgate in 1998 to buy the former Debbie Reynolds hotel-casino at the north end of the Strip, a plan that didn't pan out. He declined to say whether the developer is considering other sites as a result of MGM MIRAGE's opposition.

The contract between the Showcase mall and the the MGM Grand was amended in 1999, the year the resort built 29 high-roller villas it calls The Mansion.

MGM Grand requested that the Showcase mall paint over its blue-green facade with a beige tone matching the Mansion and also asked the mall to frost windows on a covered walkway that extends from the neighboring parking garage to the mall and overlooks the Mansion, Unger said.

The mall's management allowed MGM Grand to make the changes, which the resort paid for and has maintained, he said.

The mall required MGM Grand's signature on the 1999 amendment before permitting the resort to paint the side of the garage facing the resort and the rear of the main mall building, according to the complaint. But the mall never signed and returned the agreement to the MGM Grand.

Despite the oversight, the terms of the amendment "were and are clearly established," the complaint said. MGM Grand has upheld those terms and defendants other than Westgate Resorts have received the benefits available under the agreement, MGM says.

The 1999 amendment has allowed the mall to encroach on MGM Grand land in a variety of ways, including permitting the mall to use the resort's property to move customers and service personnel and to install electrical equipment. MGM Grand also demolished boundary walls to permit the extension of the mall building up to a southeast property boundary line, the suit said.

The tower "will otherwise permanently and seriously disrupt the privacy of (MGM Grand's) patrons and customers, particularly those located in the Mansion, and will otherwise cause traffic and parking congestion," the complaint said.

MGM MIRAGE is building a condo complex of its own behind the MGM Grand with Turnberry Associates, another Florida developer. Plans call for up to six 40-story towers to be built starting in the second quarter of 2004 at the site of the resort's defunct theme park on Koval Lane near Harmon Road.

The gaming company has denied that its objections to the Westgate development are tied to the Turnberry deal. Unlike the Turnberry condos, the Westgate tower is proposed on a site that isn't equipped to handle the scope of the project, MGM MIRAGE has said.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy