Lawsuit may delay arena plans

Would-be downtown developer REI Neon has won the blessing of the Las Vegas City Council, hired many of Southern Nevada's top consultants and says it has spent more than $10 million so far securing land that would be home to a 22,000-seat arena, casinos, hotels and condominiums near downtown.

But does the company control all the 85 acres it says it does?

A lawsuit filed by the Culinary union says no.

The lawsuit claims that REI Neon has not provided evidence that it controls or has agreements to purchase 25 pieces of property in its project area, despite the City Council already granting zone changes and other approvals on the land.

It's a contention REI officials roundly deny.

"Every one of the parcels, we have under option," said Lee Haney, spokeswoman for Rogich Communication, which is representing REI Neon. "We have eight figures invested. We have it under firm control."

The Culinary Local 226 would not comment for this report, said Pilar Weiss, the union's political director.

The District Court lawsuit, which names the city of Las Vegas and REI Neon, seeks to overturn the City Council's zone changes, general plan amendments and other approvals it granted REI Neon on June 20.

The legal challenge could scuttle REI's plans and at least significantly delay the city's wish to have an arena built in the downtown area.

A motion to dismiss the lawsuit has been filed by the defendants. The motion is scheduled to be heard in early September, about the same time REI says it will begin closing on the 85 acres.

The Culinary doesn't own any land inside the proposed project. But the headquarters for the influential union is a half block away, according to the lawsuit, which was filed July 13.

Its challenge to the project, according to the lawsuit, is meant "to ensure that a project is not speculative but rather is real."

The lawsuit also says Culinary staff and members regularly use Commerce Street, a road that would be closed by the project.

The union, REI and the city have been involved in talks this week to settle the lawsuit, according to sources close to the negotiations.

The sources said that if REI Neon agrees to allow future casinos on the site to unionize through "card checks," a more pro-labor way to unionize properties, the lawsuit would be dropped.

Mayor Pro Tem Gary Reese, who represents the planned REI Neon project, said Culinary union officials had told him they supported the project before getting up at the June 20 council meeting to express their concerns.

Even if the lawsuit goes away, the question remains about whether REI changed zoning and got city approval on land it didn't have control over.

As of Friday, city officials were reviewing documents REI submitted to verify it controlled all the parcels, according to a City Hall official.

The morning before the City Council considered the project, REI representatives submitted hundreds of pages of "seller estoppel certificates" that showed landowners had agreements to sell their land to REI or TR Las Vegas, the company that assembled much of REI's land.

The Culinary union's attorney, Richard McCracken, said in a letter to Las Vegas City Attorney Brad Jerbic that union staff had analyzed the agreements and which parcels they represented.

"This analysis revealed that the seller estoppel certificates do not cover 25 of the parcels within the area covered by the applications," McCracken wrote in his letter, a claim also made in the lawsuit.

Those 25 pieces of land represent more than 20 percent of the properties in REI's project, according to the lawsuit.

The land is bordered by Charleston Boulevard to the north, Wyoming Avenue to the south, Main Street to the east and railroad tracks to the west.

The first phase of the project, which REI and the city are currently negotiating on, would be the arena phase, on the corner of Main and Charleston.