It was not the showgirls or the bikini-clad dancers on an outdoor bar or the shirtless cowboy and Indian act or the spray paint artists or any of the hundreds of tourists’ T-shirts that stood out Friday night at the Fremont Street Experience.
Instead, what looked out of place was the sight of Clark County District Judge Elizabeth Gonzalez walking the length of the attraction, down one side and back on the other, followed by a small platoon of attorneys in suits and ties. Occasionally, Gonzalez would stop to step off the width of the outdoor bars that several hotels have added in the past couple of years.
It was the latest twist in a three-year-old lawsuit brought by Steve Burnstine, owner of the Mermaids and La Bayou casinos through his Granite Gaming Holding, to try to win damages for alleged lost business because neighbors have been allowed temporary and permanent bars while he was not. The case has evolved into a broadside attack on the governing structure of Fremont Street Experience LLC, which operates and markets the downtown attraction through assessments paid by member property owners.
For two weeks, attorneys called several top Las Vegas city government officials as witnesses and argued over the validity of an ordinance passed by the City Council in September 2012, called the master encroachment agreement, that gave legal sanction to the outdoor bars even though they stand on city land. The encroachment agreement not only covers the bars, the main focus of the case, but other structures including vendor booths, concert stages and places to eat.
At the end of the hearing, Gonzalez wanted to see the street scene firsthand, but did not ask questions or speak with attorneys in keeping with court protocol.
Burnstine attorney James Jimmerson pressed for an injunction that would overturn the agreement. That would not require the wholesale removal of the structures, he said, but would prevent opening a completed bar by the Golden Gate and another that the Golden Nugget has under construction. Both currently fall under a temporary restraining order Gonzalez imposed in August.
Gonzalez raised concerns that the encroachment agreement did not include rules or standards for Fremont Street to follow in dealing with businesses.
“Can you explain to me why you think the city’s wholesale delegation of its authority related to the location of bars … to Fremont Street Experience, without setting up any framework for decision making by the city, is an appropriate delegation of (the city’) authority?” she asked Fremont Street attorney Todd Bice at one juncture.
Did the encroachment agreement then make Fremont Street Experience a “state actor,” an entity granted governmental powers that also has to follow government rules and procedures? she asked.
Going in that direction, said Bice, would improperly vest legislative policy debate in the court.
“The question before the court is what statute has the city of Las Vegas violated or what constitutional provision violated,” he said. “And the answer to those is they violated neither.”
Starting with the Fremont Street Experience’s creation 20 years ago, both state and local law gave it total control of all the business activity on what was converted from a street to a pedestrian mall. That exempts it as a state actor, he said.
As a result, nonpaying adjoining businesses such as Burnstine’s do not have any right to place a bar on the mall, even if dues-paying competitors do, he said. To put everyone in the same position would doom the Fremont Street Experience.
However, Jimmerson said, “Fremont Street is a state actor and that makes all the difference in the world.”
This means that Fremont Street must adhere to policies that give everyone an equal chance.
“Where are the protections for anybody but the self-interested, self-dealing (Fremont Street),” he said. “Their goal is greed. Their goal is control.”
Contact reporter Tim O’Reiley at email@example.com or at 702-387-5290.