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April 23, 2014

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Audit: Riviera owes $160,000 in rent to LVCVA

Image

Steve Marcus

A view of the Riviera on the Las Vegas Strip on Dec. 26, 2007.

A Las Vegas Convention and Visitors Authority audit has uncovered that the Riviera has never paid rent in a parking lot lease agreement with the LVCVA despite the deal being extended five times.

The audit said the Riviera owes the LVCVA $160,000 and will pay it off over the next three years.

“It’s one of those things that an audit is supposed to catch and we’re now taking care of it,” said Rossi Ralenkotter, president and CEO of the LVCVA.

A summary of the audit was presented Tuesday to an LVCVA audit committee. The full LVCVA board is expected to review the committee’s recommendation in March.

Ralenkotter said the Riviera approached the LVCVA about using its Gold Lot on the northwest corner of Paradise Road and Convention Center Drive at times when the Riviera had a large conference in its meeting rooms and needed to supply overflow parking.

An agreement was drafted and the Riviera agreed to the terms, but never paid the lease fee. According to the audit, the lease was extended five times and monthly rent totaling $160,000 was never collected.

Ralenkotter said the lease agreement has since been terminated and the Riviera agreed to lease the lots on an event-by-event basis.

The Riviera matter was the most serious issue discovered by Las Vegas-based auditors Piercy Bowler Taylor & Kern. The audit included a review the LVCVA’s insurance coverage, its contracts with Las Vegas Events, its private, nonprofit special events coordinator; its contracts with Smart City Networks, its telecommunications provider in the Las Vegas Convention Center; its accounts receivable and first-quarter accounts payable accounts; and its time-off request system.

The audit committee, chaired by Keith Smith, a Boyd Gaming CEO, forwarded the audit to the LVCVA board with few comments.

The audit report followed the LVCVA board’s monthly meeting at which board members unanimously approved a lease extension at Cashman Field for the Las Vegas 51s minor-league baseball team.

The extension will enable the team, the Triple-A affiliate of the Toronto Blue Jays, to use the 9,334-seat stadium through Dec. 31, 2014, with an option to extend to 2018. The lease was scheduled to expire at the end of 2010.

The addendum gives the 51s an out with a one-year notification if the team secures a lease for a new ballpark in Clark County.

The LVCVA said the 51s lease produced $397,000 revenue in 2009 and the extension would increase that by 9 percent over the length of the lease.

The lease extension also enabled the LVCVA to increase the base rent each year at the rate of the consumer price index. The LVCVA also will no longer receive a percentage of advertising revenue from the new scoreboard, instead taking a larger fixed payment of $25,000. The LVCVA also agreed to take over two reader boards outside the stadium.

The 51s play a 72-game home schedule generating an estimated 3,000 room nights a year in local hotels, resulting in a non-gaming economic impact of $1.25 million.

The city also benefits from the publicity generated in radio broadcasts to the cities of the team’s opponents in Des Moines, Iowa; Memphis and Nashville, Tenn.; Omaha, Neb.; Albuquerque, N.M.; New Orleans; Oklahoma City; Round Rock, Texas; Colorado Springs, Colo.; Portland, Ore.; Tacoma, Wash.; Fresno and Sacramento, Calif.; and Reno.

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