Columnist Jeff German: On a dramatic day between business foes — and who came out on top

Tuesday, Jan. 31, 2006 | 9:22 a.m.

Jeff German's column appears Sunday, Tuesday, Thursday and Friday in the Sun. Reach him at german@lasvegassun.com or (702) 259-4067.

In a city that loves legends, we may one day remember this as the legend of Pete Eliades.

It was the day last week that Eliades -- at a public auction in a courtroom jammed with jaw-dropping spectators -- maneuvered his hated business partner into buying his half of the Sapphire topless club for a whopping $40 million.

Eliades, a 73-year-old Greek immigrant and Las Vegas resident since 1955, has always been regarded as a shrewd businessman. He owns the Olympic Garden, one of the city's most successful topless clubs, and he has a financial stake in taxicab conglomerate Yellow Checker Star.

But getting out of the Sapphire last week -- in the spectacular way that he did -- may have cemented his reputation in the business community.

It is true that his partner, Los Angeles businessman D. Michael Talla, submitted the winning $80 million bid on Sapphire, a 70,000-square-foot establishment in the shadow of the Strip.

Yet it is Eliades who is claiming victory.

He said he made about $25 million from his original investment in Sapphire, which opened in 2002.

The windfall came in a couple of minutes, in less time than it takes to get a $20 lap dance.

"It's good pay for a day's work," Eliades joked. "It feels pretty good beating Talla."

The two men learned to despise each other during their stormy four-year partnership. The auction was set up by District Judge Elizabeth Gonzalez as a way to resolve their bitter legal fight for control of Sapphire, billed as the world's largest topless club.

By no surprise, Talla, who made his money in the athletic club business in Los Angeles, and his people don't think they were bested by Eliades.

Talla basically got Sapphire, which sits on 6.1 acres of prime real estate behind the Stardust, for $40 million.

If Boyd Gaming Corp., which owns the Stardust, builds its proposed $4 billion resort complex on the site, and the high-rise condominium market stays strong, the Sapphire deal could turn into a gold mine for Talla, too.

But it's not a sure thing.

And judging from the body language of the participants after the auction (Eliades was all smiles and Talla was stern-faced), there may be reason to believe that Eliades came out on top.

The first thing that longtime accountant George Swarts, the auction's court-appointed special master, said afterward was, "Wow."

Swarts, who was as close to both sides as anyone, said he never expected the bidding, which began at $35 million, to go that high.

One neutral insider, who watched with amazement as the high-stakes auction unfolded, told me Eliades simply "sucked in Talla."

In the posturing beforehand, the observer said, Eliades gave everyone the impression that he was determined to buy the club.

That's the way it looked when Eliades started the fast-paced bidding at $35 million.

There were four participants, all sitting in a row in court, with Eliades and Talla on each side, as Gonzalez entertained the bids.

But the other two bidders, including Harry Mohney, owner of the national Deja Vu chain of strip clubs, never got a word in. They appeared as astonished as the audience at the lightning fast way in which Eliades and Talla kept trumping each other, millions of dollars at a time.

Talla went to $40 million, and Eliades upped the ante to $50 million. That was followed by Talla at $55 million and Eliades with another $10 million raise to $65 million.

When Talla bid $70 million, Eliades came back at $75 million.

And in a flash it was over.

After Talla bid $80 million, Eliades paused, smiled at Talla and was seen mouthing the words, "You got it."

Then, when Gonzalez made it official, Eliades supporters erupted into loud cheers and gave Eliades a hero's escort out of the courtroom.

Eliades later said he thought his high-rolling strategy caught Talla off-guard.

"I thought if I did big increments, I'd throw him off," Eliades said. "I just started him up, and he couldn't stop."

And maybe another legend was born in Las Vegas.