Casino plan may survive arena’s death

REI NEON

Lawsuits have been filed contending REI Neon never proved it owns the 85 acres it wants to develop with an arena and other projects.

By Joe Schoenmann (contact)

Friday, May 30, 2008 | 2 a.m.

Steve Marcus

REI Neon attorney Paul Larsen, left, and Las Vegas City Attorney Phil Byrnes appear in District Court on Thursday for a hearing in a lawsuit challenging the company's plans to build an arena downtown. A status hearing was scheduled for Oct. 2.

The casual stance of opposing attorneys during a Thursday hearing dealing with the once-promised downtown Las Vegas arena spoke volumes about the chances of that arena’s ever being built.

Those long doubtful that the ambitious $10.5 billion development that includes the arena would ever rise from the ground had even more reason for skepticism after the hearing — where, like the project itself, almost nothing happened.

The notable lack of urgency is good news for the Culinary Workers Union and a group of concerned residents, both of which are fighting the REI Neon arena project.

The union and residents filed lawsuits last year contending the Bloomfield Hills, Mich.-based company never proved it owned the 85 acres upon which it wants to build, in addition to the arena, a casino, condominiums, retail and other development. State statutes require ownership before would-be developers can seek entitlements such as vacating a street.

The union, which operates from an office within a half-mile of the site, has opposed the plan in part because if REI Neon moves ahead, the city will allow the developer to take possession of Commerce Street, regularly used by union employees to get to work.

Political observers have theorized that a more likely reason for union involvement is to gain a bargaining chip, suggesting the Culinary would drop its suit in return for an REI Neon guarantee to allow union organizing.

Whatever the union’s motivation, the city and REI Neon deny anything improper has occurred.

The truth might come out after a status hearing scheduled for Oct. 2.

But after Thursday’s court hearing, a bigger question loomed for attorney Chuck Gardner, who represents Charles Weiner and other concerned residents.

“What happens if REI Neon goes away?” he said. “Does the gaming overlay district remain?”

The gaming overlay district is the real gold at the end of almost any downtown arena development deal. Before the city chose REI Neon as the arena developer last summer, it approved an original gaming district of roughly 44 acres. The city then expanded that acreage to accommodate REI Neon’s ambitious plans.

Margo Wheeler, city Planning Department director, said the overlay district stays even if the other parts of REI Neon’s plans do not advance.

It “is in place regardless of what happens with the REI project,” she said.

That’s not necessarily a bad deal for the city, which — with or without an arena — would love to see development of those 85 acres, now pockmarked by older buildings, radiator shops, boxing gyms, a used car lot and other low-foot-traffic businesses.

But Gardner said he is thinking ahead about a legal challenge, should the REI Neon project die.

“Even if this thing dies on the vine by itself, we have to do something,” Gardner said. “We have to push something somewhere, either the city or the judge, to get rid of the casino zoning.”

What Gardner assumes is something many onlookers thought almost from the day the City Council gave REI Neon the right to work out a plan with the city to develop the arena.

It was difficult then — even more so now — to find believers in REI Neon. Even though the company seemed determined, few thought it had the grit and money to pull off a project 10 times bigger and much more complex than its previous biggest development.

And more than a few speculated the company was dangling the prospect of an arena and billions of dollars in other development in front of City Hall primarily to obtain the potentially very lucrative gaming overlay.

Even Las Vegas Mayor Oscar Goodman, the biggest booster of a downtown arena — any arena, almost anywhere downtown — declared after REI Neon won the right to negotiate with the city last year that it would be “a miracle” if the project ever got built.

A city source laughed for a few seconds when asked Thursday about the chances of REI Neon’s ever putting up an arena.

“We never thought it would happen in the first place,” the source said. “The (city) Office of Business Development, they’re the ones wringing their hands over this.”

Scott Adams, the office’s director, could not be reached for comment.

A city spokesman said Goodman met with REI Neon principals Thursday. The spokesman said Goodman was too busy to be interviewed, but it’s safe to assume the arena figured prominently in the discussion.

The question is, was that talk about the arena to come, or the one lost and gone?