Commissioners to decide Walters land deal

Talks to renegotiate a land deal between gambler and developer Bill Walters and McCarran International Airport appear to have stalled, leaving Clark County commissioners to decide the matter on Tuesday.

"There's zero chance" of a deal before then, Walters said.

But if the rest of the board agrees with Commissioner Steve Sisolak, who has been pushing for the two sides to come to an agreement, Walters will be allowed to raze his Bali Hai Golf Club and build a business park.

"To me, this is clear-cut: It's a much, much better deal for the county than what we currently have," Sisolak said. But the airport director said an unintended consequence might be that the deal would allow Walters to undercut the airport with some of its tenants.

This is not the first time Walters has entered into an agreement with a local government to build a golf course, only to come back later seeking to build a different, more lucrative project on the property instead.

Sisolak said Walters received a good deal in 1999 on the 155 acres on Las Vegas Boulevard he used to build Bali Hai. To use the land, he had to share profits with the airport -- the same deal that many other developers have with the airport. But because the course never made money, the airport never received any.

Airport officials, dissatisfied with these results, asked him in 2009 to come up with a different plan, and he proposed demolishing the golf course and building a business park with more than 2 million square-feet of industrial and retail space. Instead of sharing profits, Walters would pay $100,000 yearly to rent the land.

Both sides want to make a deal. The airport wants to make some money off the land; Walters wants to turn a losing venture into a winning one. But the two sides have been hung up on three points that Aviation Director Randy Walker wants to add to the lease:

■ The airport could raise the rent every three years.

■ The term of the lease would be reduced from the 87 years remaining to 50.

■ Walters' property would need approval by the airport before leasing to about a dozen large tenants who currently lease from contractors on other airport-managed property.

Walker said Wednesday that adjusting the rent every three years is required by the airport's bond guidelines. Walker said his lawyers have told him the revised contract would have to be reduced to 50 years, the maximum lease on airport-managed land under state law if it's not for "airport services or facilities." The golf course had a 50-year contract and a 49-year extension because it qualified as an airport facility, he said.

As for restrictions on other tenants, Walker said he didn't want one of the dozen or so large tenants, who might pay $100,000 per month in rent on other airport-managed land, leaving for a potentially better deal at Walters' property.

Because Walters would pay a fixed rate to the airport each year, and the other airport contractors pay a percentage of income, he could potentially undercut the rent prices of other airport-land competitors and the airport could lose money on the deal, Walker said. Any losses would be passed on to the airlines that use the airport and, in turn, to airline customers. He added that if the airport didn't approve a tenant's move to Walters' property, Walters could appeal the decision to the commission.

Both Walters and Sisolak don't believe those points are legitimate. Sisolak called the restriction on tenants "ridiculous" and added it might be illegal.

"I think it's an anti-trust violation as far as I'm concerned," he said.

Sisolak said the airport entered into a lousy deal with Walters to begin with, but he doesn't believe it can legally change key provisions such as reducing the length of the lease. Walters said reducing the lease would hurt him because his loans were based on a 99-year lease.

Walters said the plan will allow him to salvage the $50 million he has sunk into the golf course. He added that the combination of a dying sport, a broken promise by the county and the addition of an access road that eliminated his driving range were to blame for the golf course's failure. The county didn't make good on its promise to build a recycled water facility, so the course was forced to use more expensive drinking water.

"I didn't make a bad deal," Walters said. "I made a bad deal in trusting the county."

Sisolak said he is trying to salvage what's left of a lousy deal.

"Right now we're not even at the (bargaining) table," Sisolak said. "We're part of the menu."

Contact reporter Lawrence Mower at lmower@reviewjournal.com or 702-383-0440.