Joshi, companion claim no pay

Wednesday, March 14, 2007 | 7:18 a.m.

The couple running Neonopolis contend they are not making any money off the troubled retail center, which sits on a prime corner in downtown Las Vegas.

Rohit Joshi claims he works tirelessly to fill the empty shops and rejuvenate the existing businesses but draws no salary.

Loraine Kusuhara, Joshi's live-in companion for more than 20 years, owns the company that runs Jillian's, a restaurant-entertainment center that anchors Neonopolis. She said she, too, works for free.

"I'm just helping out some friends," Joshi said.

Those friends include Dharmesh Bhanabhai, a senior executive at Wirrulla Hayward LLC, the group that owns Neonopolis. Bhanabhai confirmed that Joshi is running the show at Neonopolis, but would not comment further.

Joshi arranged Wirrulla Hayward's $25 million cash purchase of Neonopolis from Prudential Real Estate Investments last year, but said he received no compensation for the sale.

Those claims of work for no pay have drawn some skepticism.

"Usually someone who sets up a deal like this would get something in return," said Richard Hoyt, a professor of real estate and finance at UNLV.

Hoyt said turning around a project with the checkered history of Neonopolis would almost certainly be a full-time job and the person who did it would likely have to be compensated.

"Usually people like to eat," he said.

Hoyt said Joshi's compensation - or lack thereof - is not the only part of the Neonopolis deal that seems peculiar. The fact that the owners paid $25 million in cash for the structure also raises red flags.

A purchase of this size would be financed, in most instances, he said, unless the buyer owns another property worth at least that much and uses that property, either as collateral or through its sale, to obtain the cash. Even under that scenario, he said, it would be extremely risky for an investor to put that kind of money into a property with the dismal track record of Neonopolis, especially when the land beneath the project is owned by Las Vegas, not the buyer.

In most real estate transactions, the buyer gets the land as well as the structure that sits on it. Because of the shared ownership arrangement with Las Vegas, however, the value of Neonopolis depends almost exclusively on the development's success.

Hoyt said that if incentives were offered based on occupancy or some other plan tied to the venture's success, then a person of independent means potentially could wait for a big payday.

Joshi denied, though, that there is any such back-end deal for Neonopolis.

Instead, he said he is living off his savings and does not have the money to pay more than $750,000 in judgments against him from previous development projects that have not panned out.

Joshi disputes the judgments and says he has not made arrangements to pay or settle them because he is trying to have them overturned.

Joshi's creditors think he is simply hiding his assets so he doesn't have to pay them.

Jonn Keamy, a debt collector for former major-league baseball player Darren Daulton and others with civil judgments against Joshi, has appeared before Las Vegas City Council twice in recent months asking for an investigation into Joshi's activities.

After the city learned of the judgments in December, City Attorney Brad Jerbic investigated and determined that alone was not reason enough to question Joshi's involvement in Neonopolis.

Last week, Keamy showed up at council again after presenting eight-year-old documents that suggest Joshi misrepresented his business relationship with billionaire Stanley Ho and his Hong Kong-based company Shun Tak Holdings.

Joshi disputed those claims and presented a document saying that he had Shun Tak's permission to look for real estate deals in the United States.

At the council's request, Jerbic has begun a more comprehensive investigation into Joshi's background.

Kusuhara recently added to the speculation swirling around the project when she confronted a Daulton representative who had been monitoring activity at the Neonopolis complex.

"Joshi doesn't have any money," she reportedly told the man. "I have all the money and Darren Daulton is not getting a ... penny." She then had the man removed by security.

Kusuhara acknowledged the incident, saying she had the man taken away because she believed he was stalking her.

In the early days of Joshi's involvement with Neonopolis, Las Vegas Mayor Oscar Goodman expressed confidence in him, saying he "has made a lot of people a lot of money."

Jerbic's investigation could determine where that money - assuming it ever existed - has gone.