Vegas bends, tries to rescue Neonopolis

Mark Hansel, Las Vegas Sun

Friday, May 18, 2007 | 7:20 a.m.

The Las Vegas City Council could be repeating a practice with a Neonopolis business that it says contributed to its reluctant decision to give a permanent liquor license to Crazy Horse Too.

Meanwhile, it continues to bend over backward to accommodate Neonopolis, even as owner Wirrulla Hayward keeps thumbing its nose at the city.

Council members granted 90-day temporary licensing changes to Jillian's restaurant at Neonopolis despite an outright refusal by a key executive at Wirrulla to comply with a licensing requirement.

If the words "90-day temporary license" for a troubled business sounds familiar, they should. The council employed a similar strategy in granting two temporary liquor permits and later a permanent license to the Crazy Horse Too.

Council members justified the permanent license for the gentlemen's club by saying operator Mike Signorelli got shortchanged because he only got 90-day temporary permits rather than the maximum of 180 days.

But the council approved the shorter licenses because it wanted to monitor activity at the club, which has a checkered history.

Jim DiFiore, the city's business licensing director, acknowledged that the council could be headed down a similar path with Jillian's.

"All temporary licenses can run up to six months, but can be shorter, and are allowed one extension of up to six months," DiFior e said. "At that point council would be faced with a similar decision as they had with Crazy Horse." Either grant a permanent license or reject it.

At Wednesday's meeting, the council approved temporary changes to tavern and liquor/caterer licenses for Loraine Kusuhara, who bought Jillian's last year. Kusuhara is the girlfriend of Rohit Joshi, who operates Neonopolis for Wirrulla.

The license changes required Metro Police to do background checks of the new owners.

Kusuhara received a clean sheet. But DiFiore said Dharmesh Bhanabhai, an owner of Wirrulla Hayward, also had to pass muster with Metro.

Bhanabhai refused to submit to the background check.

Kusuhara said Bhanabhai won't submit to a background check because he wants Jillian's to close. The restaurant would have to shut without the license changes.

If the Neonopolis businesses fail, some speculate Wirrulla would have more leverage with the city to push for a casino and other changes at Fremont Street and Las Vegas Boulevard. The $100 million retail complex houses only four businesses now - Jillian's, a movie theater, the Poker Dome and Del Prado Jewelers.

Mayor Oscar Goodman has complained loudly about the way the retail complex is being operated under Wirrulla , but he recommended temporary approval of the license changes.

"Everything has to suffer with the way this is operated," he said. "But I'd hate to see Jillian's close."

The council keeps extending a lifeline to Neonopolis businesses by renewing its agreement to provide free parking to customers. The city owns the parking garage under Neonopolis and the property, while Wirrulla owns the structure itself.

It's no secret Goodman would like to see new owners at Neonopolis , and the businesses make the site more attractive to potential investors.

In March, city officials met with General Growth Properties, a Chicago-based retail giant, in a failed attempt to get it to buy Neonopolis. Goodman also plans to pursue potential buyers at the International Council of Shopping Centers convention, which takes place next week in Las Vegas.

At the permanent licensing hearing for Crazy Horse Too, council members suggested they didn't fully consider the ramifications of the shorter license. (Goodman abstained from the Crazy Horse Too vote.) A month later, however, the council is offering similar temporary approvals to another lessee whose owner refuses to comply with city policies.

It took Prudential two years to sell Neonopolis, when the local real estate market and, arguably, Neonopolis were in much better shape than today.

The city may have a harder time finding a buyer this time around, especially because Prudential was marketing the structure much more aggressively than Wirrulla is.

If no buyer is found, the council could be faced with a twist on the licensing scenario when the temporary permits are up. It won't have the option of approving a permanent license for Jillian's if Bhanabhai continues to refuse to submit to a background check.