Sunday, January 25, 2004
Copyright © Las Vegas Review-Journal

DOWNTOWN DEVELOPMENT: All dressed up ... and no place to go

Gay businessman says club he planned for Neonopolis being blocked because of discrimination

Donald Troxel planned to open a drag-themed nightclub at Neonopolis. He claims the center's management revoked his lease because he is gay. Photo by Samantha Clemens. Donald Troxel said his Celebrity Show and Dance Club in Dayton, Ohio., pictured here, attracts up to 1,000 patrons nightly. Troxel has been working to open a Las Vegas version of Celebrity. SPECIAL TO THE REVIEW-JOURNAL

A gay Ohio businessman who hopes to open a drag-themed nightclub in downtown Las Vegas claims management-level representatives of Neonopolis and the Fremont Street Experience have separately discriminated against him because of his sexual orientation and the nature of his business.

Representatives from both organizations last week denied such claims.

Donald Troxel has spent the past few months trying to open a Las Vegas version of his Celebrity Show and Dance Club, a popular late-night venue he owns and operates in Dayton, Ohio.

Las Vegas city leaders have expressed faith that such a club could boost traffic and tax revenue within the struggling downtown area, but so far, Troxel's efforts have met only disappointment and frustration.

"I tell everyone these people (who oppose his plan) need to get their heads out of that tunnel," Troxel said Jan. 14 as he gestured toward Fremont Street's four-block-long lighted canopy. "We know we could bring a lot of money to downtown."

Troxel points out that his Ohio club's upscale music and entertainment offerings draw roughly 4,000 customers per week from areas across the Midwest. He's confident his array of female impersonators, drag revues and late-night dance amenities would quickly catch on in Southern Nevada, where he said similar gay-friendly attractions are largely unavailable.

But finding the right place to put that business has been problematic despite multiple vacancies in the downtown area, he said.

Troxel's largest complaint stems from a failed attempt to lease space at Neonopolis, a new but desolate 250,000-square-foot retail and entertainment center that opened in May 2002 at the northwest corner of Fremont Street and Las Vegas Boulevard.

Troxel claims he spent much of the past year preparing to open a club at Neonopolis this spring. But the center's management in November yanked his lease proposal without formal explanation, and Troxel says the complex's general manager, Chardell Steves, told him by phone the deal fell through because Neonopolis' owners had issues with a gay-themed business.

Troxel said he's more recently been rebuffed by the Fremont Street Experience, where he says a worker told him board members she spoke with were uncomfortable hosting Troxel's planned club.

"Anybody and everybody"

Troxel opened what he describes as an "alternative lifestyle" nightclub in Dayton in 1990. About six years later, the business had outgrown its first location and moved into its present home, a 20,000-square-foot venue manager Dwight Keys said is the largest nightclub in Ohio.

Keys said Celebrity, which is open just four days a week, routinely draws about 1,000 people per night, with many patrons traveling from nearby cities including Cincinnati, Cleveland and Indianapolis. And Troxel estimates about half of his customers are heterosexuals.

"It's for anybody and everybody," Troxel said.

Those claims are supported by several nearby business owners in Dayton, as well as the city's mayor, Rhine McLin, who wrote a letter of recommendation that praised Troxel's "noteworthy record of both facility maintenance and crowd control."

Troxel, 55, and Keys, 57, are both longtime Las Vegas visitors. About four years ago, they began studying the possibility of opening a Celebrity club here before they eventually retire in Southern Nevada.

Because Las Vegas is larger than Dayton and attracts more than 35 million visitors each year, Keys said a club here would operate daily and would likely earn up to $2 million to $3 million in revenue in its first year. In addition, because Celebrity would not offer gaming, Keys said it would bring people downtown without competing against nearby casinos.

"Fremont Street Experience dies out around midnight," Keys said. "That's when things would really start up at our place."

The men hired real estate agent Dick Bell, who suggested they locate downtown, where city leaders hope to build a new entertainment district featuring multiple bars and clubs. In April, Bell met with Doug Lein, who manages the city of Las Vegas' business development office, who in turn suggested Troxel and Keys seek space at Neonopolis.

Neonopolis

Troxel said he first met with Bell; Steves, who was then Neonopolis' leasing director; and Gary Bailey, a local architect, in mid-May. Following weeks of negotiations and two rejected offers, Troxel in late August paid $1,600 to incorporate a Nevada business called Celebrity Las Vegas.

About two weeks later, Troxel said he was asked to submit proof he could finance his proposed club at Neonopolis, which he said would have cost approximately $1 million. A representative of Bank One later documented his loan status with Steves, according to documents Troxel supplied to the Review-Journal.

On Sept. 13, Troxel said Steves personally visited his club in Dayton and that evening asked him to sign a lease proposal for space at Neonopolis. Troxel said he gave Steves a $10,000 deposit and subsequently announced to a packed house of clubgoers that he'd just struck a deal to open Celebrity Las Vegas in early 2004.

Lease documents called for a roughly 10,000-square-foot space on the second-level of the Neonopolis complex. Troxel said the club would also have used a balcony area overlooking the Fremont Street Experience.

With Neonopolis struggling for patrons, Troxel said Steves expressed interest in getting his proposed business open as quickly as possible.

In the ensuing weeks, Troxel said, he spent heavily on plans for tenant improvements, as well as multiple trips between Las Vegas and Dayton. An apartment and furniture were also leased in town, he said, in anticipation of spending large amounts of time at Neonopolis setting up the club.

On Sept. 25, Troxel instructed Las Vegas attorney Edward Miley to purchase a liquor license for $42,000. City records show Troxel's application to buy the license from a private party was filed Oct. 17 but is still under investigation by local police, a process that often takes up to four months to complete.

Troxel's architect, Bailey, said he worked closely with Steves and other Neonopolis staff members to secure the plans and paperwork required for the city permitting process. He described her initial attitude as "cooperative." Over the next month, Troxel continued to work personally with Steves, Bell and others in preparation for the club's planned debut sometime before March 1, when rent was to start accruing.

Boys of Celebrity

Trouble arose in late October, Troxel said, when Steves called him to discuss concerns that his business was affiliated with a male escort service that had indirectly posted a link to Troxel's club Web site, www.celebritydayton.com.

Troxel flatly denied allegations that he is affiliated with an escort service -- which operates as "Boys of Celebrity" -- claiming businesses and organizations within Ohio's gay community often posted links on the site without his full understanding of where those outside links directed online viewers.

Following Steves' complaint, Troxel said he immediately removed every outside link from his Web site to avoid further confusion.

Around that time, Bailey said he was unable to get Steves to sign a document needed to bring his architectural plans before the city planning commission.

Over the next two weeks, Troxel said he tried repeatedly to reach Steves by phone but was unsuccessful. On Nov. 4, Troxel said he finally spoke with Steves, who told him his lease proposal had been revoked.

"She said it was a gay issue," Troxel said. "And they knew from day one what our concept was going to be."

Interviewed by telephone last week, Steves denied making anti-gay comments to Troxel and declined further comment.

"I never said that, never intimated that," Steves said. She said no other representative of Neonopolis would be willing to discuss Troxel or his history with the center.

Troxel's attorney sent a letter Nov. 4 asking Steves why her organization cancelled its lease with Celebrity. Attorney Jason Kerr responded via letter that Neonopolis "does not now have, and never had, a lease agreement with Celebrity Las Vegas LLC."

The $100 million center is owned by World Entertainment Centers, a Newark, N.J.-based affiliate of Parsippany, N.J.-based Prudential Real Estate Investors.

Bell said Neonopolis' cooperation with Troxel's architect and other vendors casts doubt on the center's claims it was only negotiating with Troxel.

"The management company was aware of what was going on and were working with Don and Dwight to get this set up in rushed order," Bell said.

Troxel's $10,000 lease deposit was returned, but he's still upset about money he spent readying the site at Neonopolis, money he'll likely never recoup. While some purchases, most notably the liquor license, are transferable should he find another local venue, Troxel estimates he's lost more than $200,000 from his failed Neonopolis bid. He is studying his legal options and hopes to sue World Entertainment Centers over the matter.

Unwelcome at Fremont Street

Troxel next set his sites on renting all or part of the former Race Rock Cafe, a mammoth restaurant space one block south of Neonopolis. That site, which has been vacant since April 2001, is owned by the Fremont Street Experience, a public-private partnership between the city of Las Vegas and the owners of 10 downtown casinos.

Troxel said he's tried since November to further negotiations for the space but has so far failed. One Fremont Street Experience official, executive assistant Diana West, allegedly told Troxel some members of her organization's board were uncomfortable with placing a gay-oriented club at the Race Rock site.

"She said, `I met with some of the board members and they did not like the idea of an alternative lifestyle club,' " Keys said. "She bit her tongue after she said it, but we have witnesses."

Both Troxel and Bell attest they were present when West's comment was made. Bailey, the architect, later confirmed he was present when such a comment was made by a woman representing Fremont Street Experience, though he could not recall specifically whether that woman was West.

Fremont Street Experience Chairman Don Snyder declined comment, but its new president and chief executive officer, Joe Schillaci, on Monday said Troxel's proposal is one of several under consideration for the Race Rock site. He declined to comment specifically on West's alleged remarks.

"The Fremont Street Experience has not yet made the determination what the best use is going to be for that area," said Schillaci, who assumed his current role Dec. 1. "We've had a number of conversations regarding that space, and while many of them have merit, we want to make sure that we will go with something that will fit with the overall entertainment experience and atmosphere.

"Whatever decision is made on the proposal is not going to be (made) because of who they are but because of what their product is and whether or not it's something we want to have in our mall."

Despite that explanation, Troxel said he's waited since November to make a proposal before members of the Fremont Street Experience board but has had no further communication. West on Tuesday countered, saying she she spoke with Bell earlier his month and told him no decision would likely come soon because Schillaci is so new to the organization.

"I told (Bell) that Troxel wants to open in February or March and there's just no way we're going to meet that time line," West said. "They want to fast-track the project, but (Fremont Street Experience management) is not ready to make a decision until Joe has had more time to evaluate everything."

West declined comment on her alleged comments about the board's discomfort with hosting a gay-themed business.

In the meantime, Troxel has entered negotiations for another potential site in the area.

Lein said city leaders hope a solution can be found soon.

"Giving people a diversity of entertainment venues ... will create a destination point that will bring people into the area who aren't going there now," Lein said. "Don is a good businessman and we think he can do a lot for downtown."