Nightclub owner settles suit over Neonopolis bias

Molly Ball

Tuesday, Feb. 8, 2005 | 9:36 a.m.

A lawsuit that accused downtown's Neonopolis mall of discrimination against gays has been settled out of court, the plaintiff and his lawyers said Monday.

Don Troxel, a businessman from Ohio who sued the mall's parent company when his lease offer to open a gay nightclub was rescinded, settled with the company last week, said Allen Lichtenstein, general counsel for the Nevada chapter of the American Civil Liberties Union, who defended Troxel.

A confidentiality pledge is one of the terms of the settlement, Lichtenstein said, meaning the parties cannot discuss how much money Troxel received or if the company -- World Entertainment Centers, a Prudential Financial subsidiary -- admitted wrongdoing.

The original lawsuit sought to recoup Troxel's purported investment of more than $200,000 and also asked for damages.

Troxel said he wasn't necessarily happy with the settlement but agreed to it because "I just wanted to get it over with and not drag it out any more."

He said he wanted to put the Neonopolis mess behind him and focus on Celebrity Vegas, the club he now plans to open on May 1 at Third and Ogden streets.

In late 2003, Troxel signed a lease with Neonopolis and was assured that it simply had to be rubber-stamped by higher-ups out of town, he said.

Based on assurances that it was a done deal, he spent more than $200,000 hiring an architect, applying for permits and making other preparations, only to get word from the company that the lease had been denied, Troxel said.

Troxel claimed he asked a Neonopolis representative whether the denial was "a gay issue" and the worker answered, "Partially." The company falsely accused Troxel of operating a "gay escort service," he contended.

Las Vegas Mayor Oscar Goodman condemned the mall's action at the time and sent a letter to the owners threatening to collect on the city's loans to the company, based partly on the discrimination charge.

Officials estimated the outstanding principal and interest to be about $10 million. The city also invested about $32 million in the $99 million, 236,000-square-foot mall.

Despite the flap, Prudential did not reverse its decision to deny Troxel a place in the mall, Lichtenstein said, prompting the businessman to seek another location and to sue.

Representatives of the New Jersey-based Prudential said this morning that the company had no comment on the settlement.

The underperforming Neonopolis has been on the market since September, according to Mark Bouchard, managing director of CB Richard Ellis, which is marketing the property.

Bouchard indicated that a potential buyer has been found. "We are actively negotiating a deal," he said.

ACLU Nevada Executive Director Gary Peck said the group took the case becasue important principles were involved.

"We are supposed to be a community and a country where everybody is treated equally and business people are dealt with on the basis of their ability to run their business," Peck said. "They ought not be evaluated based on such irrelevant factors as sexual orientation or perceived sexual orientation."

Peck and Lichtenstein praised city officials for their response and their support of Troxel's search for an alternate site and predicted success for Celebrity Vegas.

"The city has been very cooperative," Lichtenstein said. "They recognize that this club is going to be a boon for downtown while Neonopolis sits empty."

Troxel said he was never tempted to quit Las Vegas in the face of resistance.

"It just made me more determined to prove a point to them," he said.

The club, he said, is "going to be fabulous" and it will feature late-night "high-energy" dancing with local cabaret acts nightly, preceded five nights a week by a sit-down show that he said would be similar to the Riviera's "La Cage," a female impersonator revue.

Troxel has predicted that the club could draw 1,000 people a night.

Goodman, who said he would support the new club wholeheartedly, also said it was Neonopolis's loss not to have landed the cabaret but said the mall would still succeed, lifted by downtown's inevitable renaissance.

"It was bad business on their part not to have made the deal," the mayor said. "Neonopolis was supposed to be the fulcrum (of redevelopment); instead it will be the beneficiary."

The city's support of Troxel sent a message of acceptance, Goodman said.

"There is no place for intolerance in my city," he said. "I won't stand for it, the city won't stand for it."