City wins legal challenge over placement of bars on Fremont Street Experience

Las Vegas has won a legal challenge to an ordinance passed in September that lets the Fremont Street Experience LLC control the placement of outdoor bars that have sprouted on the tourist attraction, but the Experience could face more fights down the road.

In a 31-page decision filed on Wednesday, District Judge Elizabeth Gonzalez turned down a request to enjoin the law that relegated the permitting process to the Fremont Street Experience, which is owned by several of the hotels on the street. The direct result allowed the Golden Gate to open one bar that has sat unused by court order while lawyers argued the issue — while the Golden Nugget can start serving from another once it finishes construction.

Granite Gaming Group, which owns the Mermaid and La Bayou casinos on Fremont Street, had challenged the law as part of a case aimed at winning damages for being denied an outdoor bar in the past. The hearing on the bars spanned a month, with interruptions, ending on Oct. 11 and requiring testimony by several top city officials, including Mayor Carolyn Goodman by deposition.

The city had gone out of bounds by surrendering broad powers to govern what is still city-owned property to a private entity, Granite Gaming contended. At the least, the city should have included policies and procedures typical of a government entity rather than one that allowed Fremont Street Experience to favor dues-paying members over businesses that stay out.

But Gonzalez declined the chance to rewrite the law.

“The question for the court is not whether it would do as the city has done,” Gonzalez wrote. “Such policy questions are the prerogative of the city’s elected representatives. ...”

From her perspective, she wrote “that given the recent adoption of Ordinance 6266 the city is not currently violating any state statute or constitutional provision.”

Ordinance 6266, approved on Sept. 4 after a year in the works, granted Fremont Street Experience the authority to decide which permanent bars could encroach on the city right of way. Until then, the process had been haphazard, falling under the umbrella of different agencies and even leading to disagreements within agencies.

“We think this is a clear error of law,” said James Jimmerson, the Granite Gaming attorney, of the approval of the ordinance. However, he added, “There are parts of the ruling that buttress very strong damage claims.”

In particular, Jimmerson cited the language that found that Fremont Street Experience’s go-aheads for the bars built before the ordinance “appears to have been improper under the then-existing code.”

Fremont Street Experience officials declined to comment on the ruling. But the language appears to set up another battle over whether the city can clean up its process retroactively.

The case dates from 2006, when Granite Gaming owner Steve Burnstine wanted to put a portable bar in front of Mermaids, only to be denied by the Fremont Street Experience. Instead, the Golden Gate was allowed to put a bar there, leading Burnstine to file suit for the lost business.

Jimmerson has fought the case on constitutional grounds, contending that Fremont Street Experience had to give all businesses along the mall an equal opportunity at such opportunities and not favor insiders over those who don’t join.

Fremont Street Experience has countered that the company was set up 20 years ago specifically to act much like the manager of a regular shopping mall and not a government agency. To let some businesses reap the benefits of the management without paying for them would ultimately encourage dues-paying members to drop out.

Contact reporter Tim O’Reiley at toreiley@reviewjournal.com or at 702-387-5290.