Developer has history of failed projects

By Mark Hansel, Mary Manning

Tuesday, Jan. 2, 2007 | 7:11 a.m.

Las Vegas city officials hope Rohit Joshi is the savvy developer who can turn Neonopolis into a moneymaker and tourist attraction.

However, the Sun has found that he has a string of failed projects that have resulted in several monetary judgments against him and led to the resignation of the Pahrump town manager.

Neonopolis, the 250,000-square-foot, $100 million retail center at the corner of Las Vegas Boulevard and Fremont Street, has struggled financially since it opened in May 2002. The city hoped it would turn the corner when it was sold last year, but despite the national exposure of the custom-built Poker Dome, it still has only three anchor tenants.

For his part, Joshi says he is a developer who has tasted both success and failure. He disputes the judgments against him and said such claims are not uncommon in his business.

He acknowledges that he is counting, at least partially, on future projects to help pay past debts.

While Joshi does not own Neonopolis, he is the developer, and the project's success, or failure, is largely on his shoulders.

City officials consider Neonopolis a linchpin project for downtown revitalization, yet council members say they were unaware of Joshi's history when they endorsed its sale last year.

Mayor Oscar Goodman said the city couldn't have blocked the private sale even if it objected to Joshi. But Councilwoman Lois Tarkanian said she would have asked more questions if she had known about the developer's history.

It took the Sun less than a day to uncover pages of documents on Joshi's past dealings and only a few phone calls to find out details about some of them.

Among the findings: more than $750,000 in judgments against him and three failed development deals, including one in Las Vegas.

Joshi tried to broker a deal to convert Cashman Center into a campus for Touro University three years ago, but could not get it done.

Jay Sexter, vice president of national affairs for Touro , said he was led astray in the negotiations. Sexter said he thought an agreement was in place, but Joshi "could not close the deal."

Goodman announced the project in August 2003, but has since said the city never endorsed it.

Sexter said it was Goodman who persuaded him to look elsewhere a few months later. "On the mayor's behalf, he was the one who told me, 'Watch out, this isn't going right,' " Sexter said.

Touro University built its facility in Henderson.

Joshi contracted HMC Architects of Nevada to draw up plans for the Las Vegas campus, and the architects sued him to recover money for its services when the deal fell through. The company was awarded $361,000 in July when Joshi failed to respond to the complaint.

Joshi also has other judgments against him, including one involving former Philadelphia Phillies star catcher Darren Daulton. At a recent council meeting, Jonn Keamy, a representative for Daulton, said the ballplayer is owed more than $160,000 from a 2001 judgment over a failed housing, retail and sports complex in Winter Springs, Fla. Joshi also failed to respond to that complaint.

George Braunstein, a California-based lawyer, said Joshi used poor judgment in not challenging the claims, but that his client had tried unsuccessfully to reach settlement agreements in the disputes.

Braunstein said Joshi feels the claims had no merit, and is now trying to get them set aside.

He also contends Keamy's effort to publicly humiliate Joshi at the City Council meeting is tantamount to blackmail.

In 1999, Joshi attempted to open a movie studio in Pahrump. By the time that deal fell through, Town Manager Mike Cosgrove had resigned and citizens were ready to boot the Town Board as well.

Town Board members say Joshi persuaded Cosgrove to lease 70 acres of town property to him for 55 years at $1 per year.

Cosgrove also set up a trailer for Silver Star Studios next to the town office. Joshi then had a contractor run power to the trailer at a cost of more than $2,000, which he billed to the city.

Ed Bishop, who was on the Town Board at the time, said all of this was done without the board's consent.

Public outcry over the sweetheart lease deal and the disputed charges for the electrical services led Cosgrove to resign, according to Bishop.

"The town went ballistic and threatened to charge all of us with malfeasance," Bishop said. "Mike was the town manager and he was the one who gave Joshi permission to use the town as a source, so the scales tipped against him."

Silver Star Studios was never built and Joshi left town. He denies any impropriety in the deal.

"I would not have done anything if the township had not approved it," Joshi said.

He said he did not try to hide his past then, nor does he now.

"There are no secrets in this business," Joshi said. "I'm not suggesting we specifically go out of our way to say, 'These are our problems,' but there are no secrets."

It would not be a very prudent strategy, he says, to try to persuade people to back his current projects by showing them past failures. The onus is on the people involved in a project to find that out.

So how much checking did the city do before it entrusted Joshi to develop what Goodman has identified as the most important address in Las Vegas?

It's hard to say.

Joshi was identified as a player in the sale of Neonopolis from the time it went on the market more than two years ago and was introduced as the buyer's representative when the deal was made, so the city had ample time to find out about him.

Councilwoman Tarkanian, however, said she was not told of any of Joshi's past dealings when city staff advised the council to endorse the sale.

"If I had known, I would have had a lot of questions and I would have wanted them answered," she said.

Even if the city checked Joshi out and found problems, Goodman contends, it had few options.

He said the city could not have blocked the sale of Neonopolis even if it had wanted to, because that would have amounted to interference in a third-party deal.

FAEC Holdings Wirrulla bought the structure from Prudential Real Estate Holdings for $25 million in cash last year, and Joshi works for Wirrulla, not the city.

Still, the city owns the parking garage underneath Neonopolis as well as the foundation.

Seemingly, it would have checked Joshi out if for no other reason than to know with whom it was dealing and to protect its own $32.6 million investment.

Officials in Pahrump and Winter Springs, Fla., say they checked Joshi out before they had dealings with him and had trouble verifying his references. They went forward with the projects anyway.

Bishop defended Pahrump's decision by saying that Joshi seemed to be a legitimate businessman who was very charming and persuasive. If the movie studio had been successful, he says, it would have benefited the town greatly.

"Sometimes you take risks," Bishop said.

The people in Pahrump did not yet know about Joshi's inability to close the Winter Springs deal or the other subsequent judgments.

City officials here had access to that information as well as the Pahrump deal before Joshi became a player in Neonopolis.

City Attorney Brad Jerbic was out of town and unavailable for comment, but if he knew about the failed deals, he apparently didn't tell the mayor.

Goodman said he did not know until recently about the project in Pahrump or the one in Winter Springs . He did not seem too concerned about them, however, or the judgments against Joshi.

"Judgments are a dime a dozen," Goodman said. "As far as I know, he has not been accused of a crime."

While that is far from a ringing endorsement, it is apparently enough for the city to embrace Joshi as the savior of Neonopolis, considering its limited options.

"He's the only game in town," Goodman has said.

Goodman also has referred to Joshi's ideas for Neonopolis as more like dreams than plans and he says this is a game the city cannot afford to lose.