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September 22, 2014

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Told you, critics of arena plan say

They say sales pitch for site shows intent all along was to flip

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Related Documents

To read the comments of Las Vegas City Attorney Brad Jerbic, attorney and former U.S. Sen. Richard Bryan, and panel Chairman Peter Bernhard, as they talk about whether or not a downtown parcel of land can be home to a casino without an accompanying arena, go to these specific pages of these 400 pages of legal documents relating to a hearing of the state Review Policy Committee of the Gaming Review Panel:

  • Brad Jerbic, pp. 351-356
  • Richard Bryan, pp. 392-394
  • Peter Bernhard, pp. 402-403

Beyond the Sun

If the downtown arena is not dead, it’s on life support.

And its opponents say the city needs to pull the plug.

TR Las Vegas was feted a year ago for achieving the real estate version of cat herding after persuading dozens of property owners to sell 56 acres to REI Neon, an arena developer. Now the same brokerage wants to sell all those acres — together, piecemeal, or any which way it can — and to whoever wants to buy them.

The brokerage has listed the 56 acres and possibly “17 acres of City-owned streets and alleyways which previously had been vacated at no additional expense to the buyer” for sale on its Web site.

The part of the pitch upsetting observers is that the company makes special note of the fact that the 56 acres had been zoned by Las Vegas for mixed-use development including gaming.

“These past entitlements,” it goes on, “still exist today and have the potential to be negotiated with the sale of this project.”

Las Vegas attorney Chuck Gardner, who has fought the REI Neon plan on behalf of concerned residents since last summer, sees that last sentence as confirmation that the gaming entitlement, not the arena, is what the would-be developers wanted all along.

“We’ve been saying from the beginning that they wanted the entitlements just to increase the value of the property so they could flip it,” Gardner said. He repeated that accusation in a letter sent Thursday to City Attorney Brad Jerbic.

Gardner wants the City Council to take up the matter and take away the gaming district designation if the land is developed piecemeal.

“The REI Neon ‘project’ was a hoax from beginning to end,” Gardner wrote, citing the land sale advertisement as the clincher.

REI President Jon Weaver could not be reached for comment Friday. Robert Reel, co-owner of TR Las Vegas, did not return calls for comment. Jerbic also did not return calls for comment.

The matter was not on the council agenda as of Friday evening.

South of Charleston Boulevard, east of the railroad tracks, north of Wyoming Avenue and west of Main Street, the parcel is home to a couple of boxing gyms, a used car lot, a few art galleries and several auto repair shops.

City records put the assessed value of the 112 parcels at $44.3 million, with an additional $17 million in buildings, for a total of about $61.3 million.

That relatively low figure belies the potential value of the property, especially if the gaming enterprise district designation — which would allow the construction of a casino — stays intact.

But serious doubts remain about that gaming entitlement. Transcripts from a state hearing last summer appear to indicate that Jerbic and attorneys for REI Neon, including former U.S. Sen. Richard Bryan, agreed that unless an arena is built, the gaming entitlement should disappear.

At the July 25, 2007, meeting of the state’s Review Panel of the Gaming Policy Committee, Jerbic told panel member Peter Bernhard that “this came as a package with all parcels. I don’t think any individual parcel is capable of carrying the (gaming enterprise district) on its own.”

Later in that hearing, Bryan strengthened Jerbic’s position, saying if the “overall plan does not materialize, is there in effect a gaming enterprise district that exists separate and apart? I think the answer is no.”

Finally, near the end of the hearing, Bernhard affirmed that without the entire package, gaming should not be allowed in the area.

“I don’t think REI could go back now and say, ‘Oh, without the arena we still have a casino project,’ ” Bernhard said. “I would be extremely upset if REI took that position at any time or if any transferee from REI ever took that position.

“I would expect that the City Council would look with disfavor on any attempt ... to put a casino here without all the other amenities.”

So, where does that leave things? If TR Las Vegas is willing to sell the downtown acreage piecemeal, that kills the arena there, right?

Scott Adams, Las Vegas’ business development director, won’t sign the death certificate.

“The REI site has not been ruled out,” Adams wrote in an e-mail to the Sun. “But it is more difficult given the acquisition costs.”

Still, he acknowledged more city focus is being put on a potential arena on property owned by the Stratosphere, about a half-mile to the south of the REI Neon site.

But for the more southern site, Adams noted, “the key issue has been a gap in financing (for) which the developers are looking to the city for assistance.”

What about the future of the gaming enterprise designation?

“I cannot address the gaming entitlement as that is not my responsibility nor am I a gaming attorney,” Adams replied.

If REI Neon, based in Bloomfield Hills, Mich., had obtained financing to purchase enough land and begin construction, it wanted to build a 22,000-seat arena, 6,000 hotel rooms, 1,500 condo units, 1,600 time share units, 3.5 million square feet of office and exhibit space, 300,000 square feet of gaming space and 1.5 million square feet of commercial and retail space. When finished, it was to encompass 85 acres.

After reviewing several proposals by a variety of developers, the city last summer proclaimed REI Neon winner of the arena sweepstakes. REI Neon all but promised the city would have an arena by the end of 2011.

Months later, the economy took a downward turn. REI Neon asked for and received extensions as it negotiated an agreement with the city.

Then it got another extension. And another.

Finally, REI Neon signaled it might be hitching its ideas for an arena to the Stratosphere and some deep-pocketed investors, including Goldman Sachs, which bought the Stratosphere, and The Cordish Cos., a development group.

That connection likely meant moving the arena site away from Charleston Boulevard and closer to Sahara Boulevard and the Stratosphere, where investors would save millions by building on a combination of city-owned and Stratosphere-owned land.

Reel and TR Las Vegas, meanwhile, appear to have even bigger ideas for downtown property, not including the 56 acres, plus or minus 17 acres of city streets.

The company’s Web site shows faraway photos of downtown Las Vegas underneath the headings “Project Final Link,” and “Project Northern Lights.” It adds that both projects are in the “assemblage process,” and provides no further information.

Sun reporter Alex Richards contributed to this story.

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