Clark County commissioners agreed Tuesday to delay discussing the proposed overhaul of a lease that would enable developer Bill Walters to raze Bali Hai Golf Club and replace it with a giant industrial park on the Strip.
Walters would pay about $100,000 in yearly rent on the 155 acres that McCarran International Airport owns. The current profit-sharing agreement has yielded zero money for the airport in the past decade.
Walters is objecting to some terms of the proposed contract and is working with aviation Director Randy Walker on a compromise.
They aimed to discuss the new lease and the sticking points with commissioners Tuesday, but the board received a version that Walters said was not the one he intended them to see.
As a result, discussion of the lease was put off until Sept. 6.
The mix-up and delay irked Commissioner Steve Sisolak, who has pushed for Walters and the airport to resume negotiating for a revamped lease after talks between the two sides stalled last year.
“If I sound like I’m losing my patience, I am,” Sisolak said. “This has been going on for 17 months.”
Sisolak said he was eager for Walters to convert Bali Hai into a business park because it will create 2,300 construction jobs and save 200 million gallons of water a year consumed by the golf course.
The industrial park, if built, would house vendors who would supply hotels and casinos with goods needed to run their operations, such as uniforms, beverages, soaps and paper products.
A 365,000-square-foot shopping center would be built on the edge of the property facing Las Vegas Boulevard.
Walters also would pay the county $4 million yearly in property taxes on the commercially zoned land, versus the $110,000 he paid in 2010 on the golf course.
Walters said the biggest snags of the proposed lease are the following:
■ He would be forbidden to rent space in his industrial park to any of the airport’s current business tenants.
■ Airport officials could raise his rent every three years.
■ The 87 years remaining on the 99-year lease would be reduced to 50 years, making it nearly impossible, given his heavy debt, to get financing.
Walters estimates he is carrying
$50 million in debt for Bali Hai and owes roughly $150 million on other projects. From a lender’s viewpoint, 50 years isn’t very long for his firm, The Walters Group, to cover such heavy debt, he said.
Walters said he thinks it’s unreasonable that Walker wants to bar him from competing with the airport for tenants.
“That’s un-American,” Walters said.
Walker, however, said it would be bad business to let Walters, who would be paying the airport $100,000 a year, to pull away an airport tenant paying $100,000-plus a month.
He said he is seeking to reduce the duration of the lease to 50 years because that is more the norm for a commercial site. The only leases he knows of that run 99 years are aviation-related, Walker said.
As for adjusting the rent every three years, that’s required by the airport’s bond guidelines, Walker said.
He said he is trying to cut a fair deal with Walters, who is trying to convert an unprofitable operation into a money-making venture. That includes being willing to consider Sisolak’s suggested $100,000 in yearly rent, he said, which he emphasized “was not our number.”
“Golf courses are in the tank,” Walker said. “A lot of golf courses have closed down.”
Contact reporter Scott Wyland at swyland@review
journal.com or 702-455-4519.