Gaming regulators hear pitch for $2B project in historic west Las Vegas

The state Gaming Control Board on Wednesday told developers of a $2 billion project covering a 5-by-16-block area in historic west Las Vegas to go back to the drawing board following a three-hour licensing hearing.

The three-member board took no action on a licensing request from the developers of the Tokyo Casino at 600 W. Jackson Ave.

Under plans revealed at the hearing, developers said they look to build an 8,000-square-foot casino with 102 slot machines, ultimately expanding the project to include a 400-room high-rise hotel and a 2,000-seat performing arts center, with other investors looking to build a smaller boutique hotel, several Asian restaurants, a Japanese experience park and block of Japanese gardens.

Developers envision connecting the area to the east side of Interstate 15 with a gondola.

If all that seems somewhat incredible based on the property’s historic roots, it’s easy to understand why regulators opted to put the brakes on the project.

Board Chairman A.G. Burnett and members Shawn Reid and Terry Johnson each voiced concerns about the financing of the project and the source of investment funds.

The proposal initially was requested as a license for nonrestricted gaming for Jack Crane as the property’s manager and for owner Steve Hayashi, seeking permission to participate in operations at a small casino formerly known as the New Town Tavern.

The New Town Tavern, which at various times has been known as the Town Tavern and the Ultra New Town Tavern, once rivaled the Moulin Rouge in 1950s Las Vegas.

John Maloney, the attorney representing the developers, said Hayashi acquired the tavern in 2013 and made several trips to the Las Vegas City Council to extend a nonconforming zoning use that has allowed the serving of alcohol near churches and schools.

The council extended the zoning exemption while Hayashi had the tavern remodeled and slot machines and a casino management system installed. He also began buying surrounding property, trying to keep the project in a low profile to avoid paying higher costs for the land.

Maloney explained that Hayashi received loans and financial commitments from Mitsuyasu Shigeta, the operator of several Southern California Japanese restaurants, and Emi Mauri, a restaurateur in Japan.

Hayashi, who spoke to the board Wednesday through a translator, also hired Las Vegas architect Kevin Thistle to draft plans for the project.

Regulators spent about 1½ hours at the beginning of the meeting, then 1½ more at the end of the session to review the proposal.

In the end, board members agreed that they would have no problem licensing Crane, who formerly managed the Silver Saddle Saloon, but suggested that Hayashi apply to be licensed as an executive. They also want to question those supplying the financial backing.

Board members said they were not convinced Hayashi’s holding company — 89 percent owned by him, 10 percent by Mauri and 1 percent by Shigeta — had adequate funding from suitable sources to be viable.

“I simply can’t make the call right now,” Burnett said. “I still have a lot of questions about the financing.”

Regulators also were concerned that financial backers didn’t return phone calls from Control Board agents to provide additional information. The developers dismissed that to a language barrier and the financiers not understanding the importance of the inquiries.

“This all seemed rushed, disjointed and injected with nonresponsiveness,” Johnson said.

Reid said the financial backers could be legitimate, “but we have no idea where this money is coming from.”

The proposal was referred back to the Control Board staff, and it could take several months for it to be returned for reconsideration. The developers may have to go back to the City Council for another zoning exemption to keep the initial tavern and casino proposal alive.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Find him on Twitter: @RickVelotta.