Judge allows $1 million loan to fund Newton attraction to proceed

The relationship between former Strip headliner Wayne Newton and estranged business partner Steven Kennedy has deteriorated to the point where they need a judge's ruling to decide where to store hay for the horses.

But a far more serious issue emerged Tuesday at a Clark County District Court hearing as a Kennedy ally agreed in June to loan $1 million to CSD LLC, which owns and is redeveloping the approximately 40 acre Casa de Shenandoah ranch in Las Vegas that has been Newton's longtime home. The plan, set in motion two years ago, calls for turning the property at Sunset and Pecos roads into a tourist attraction celebrating Newton's career.

Kennedy's side depicted CSD as having run out of money with no other source of funds beyond the loan. Attorney Charles McCrea Jr. said that money was needed to pay the estimated $37,000 a month it takes to care for and feed Newton's 51 Arabian horses, as ordered last month by Judge Elizabeth Gonzalez.

Gonzalez on Tuesday denied McCrea's request for official approval of the loan; this does not stop the loan from proceeding, however, the Newton side may later challenge its validity.

However, Newton attorney J. Stephen Peek said the real aim of the loan was to "try to get rid of the horses and squeeze" Newton and his family off the property. The terms call for repayment within a year and as quickly as 30 days after they money was advanced. A default would set the stage for a foreclosure.

The Newtons continue to live in the mansion on the grounds and hold a 20 percent interest in CSD.

So far, McCrea said the loan has been partially funded, but he did not disclose figures.

Wayne Newton's wife, Kathleen McCrone Newton, contended after the hearing that CSD had no shortage of money for ongoing work to prepare the ranch for public visitors, such as flying in people from Texas to install audio equipment or filling in what was called a meditation pool.

"They have spent money on things that have no benefit," she said.

Kathleen Newton was the only member of CSD's five-person oversight committee to vote against the loan at a quickly called meeting on June 20.

The other members voted in favor of the loan, citing a bank account that has dwindled below $1,000 and that no one else with willing to provide a loan or inject fresh funds. The loan came from DLH LLC, controlled by Texas investors Dorothy and Lacy Harber.

In other parts of the case, Gonzalez made several rulings that had the effect of forcing the Kennedy side to tighten the case or back it with hard evidence. For example, she dismissed Kennedy allegations that the Newton's dogs had attacked workers and Newton that sexually harassed female employees unless Kennedy would supply specific claims. Kennedy attorney Doreen Hartwell said dog bite claims would be filed.

Gonzalez also had to step into several other spats, such as not allowing the Newtons' 10-year-old daughter, Lauren, to drive a car on the ranch property, in response to one allegation by Kennedy that she had; allowing hay to stay in a breezeway near the horse stables; and prohibiting any interference with the outdoor drainage system.

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