Meridian suites still taking overnight guests

As a time clock set by Clark County runs down toward a Tuesday deadline for the Meridian Luxury Suites to cease short-term rentals, it appears the condo property is still taking overnight guests. But the Meridian has not paid any county room taxes, a Clark County representative said.

The Meridian is in the process of converting its upscale condominium units from owner-occupied and long-term rentals to resort condo use as well. The county says the Meridian is running an illegal hotel operation, and has ordered it to stop.

Meridian management said Tuesday it has not been secretive about its hotel operation, and indicated it was paying the legally required room tax.

"The Meridian has been very open," Eric Lynn said in a written statement. "In fact, we have been marketing its rooms for the better part of a year, promoting room reservations through our Web site, through various forms of advertising and on many travel reservation Web sites.

"During this time, we have collected local room taxes as required by law and have been working with Clark County officials regarding our operations, zoning and licensing."

Lynn is senior vice president of sales and marketing for Meridian Private Residences

But Clark County spokeswoman Stacey Welling contradicted Lynn's claim, saying Thursday, "We haven't received any transient lodging taxes from the Meridian."

Lynn later told the Review-Journal the Meridian "collected and set aside" room taxes, but he wouldn't say if they had been given to the county.

The county's Business License Department collects the room tax for short-term rentals. But because the Meridian is not licensed to operate a hotel, the county could not allow it to pay, Welling said. The Meridian missed a Monday deadline, set by the county's Business License Department, which issued a violation notice because the Meridian lacks the proper license to rent rooms overnight.

"If it is doing (short-term) room rentals, then the Meridian would be in violation of our transient lodging ordinance, and legal action would be taken," Welling said.

Several Meridian applications are pending, she noted.

Two Meridian residents said the condo project, at 250 E. Flamingo Road, is still operating as a resort, despite the county's warnings.

"It's still renting. Bellmen are walking around and driving around. All the cleaning people are going unit to unit," Kathleen Mannix said Monday.

Her permanent home is the Meridian unit she paid for in full before moving to Las Vegas in May 2007. Mannix said no one informed her at the time of her purchase that any of the units would be leased for periods of less than 31 days.

Robert Vance, another Meridian homeowner, said Thursday he, too, believes the hotel is still operating.

Vance, who has lived at the Meridian since it was an apartment complex in 1992, supports the plan to allow overnight rentals, but also wants Meridian management to comply with the law and homeowner association rules.

Evidence of a hotel operation at the Meridian also led the district attorney's office to send the property a warning letter on June 20. It was addressed to Michael Mackenzie, president of the Meridian Private Residences Homeowners Association, and ordered hotel operations to "cease and desist." The letter, from Deputy District Attorney Robert Warhola, also notes that the county requires a $300 annual license fee for each condo unit used for transient lodging.

Tuesday is a separate deadline set by the county's code compliance office for the Meridian to stop overnight rentals until it meets other conditions of its conversion, including the legal recording of a map signed by all unit owners.

The Meridian recently won approval for the special use of transient lodging, but has not met all the mapping and licensing conditions to actually operate the special use, Welling said.

Mackenzie, the homeowners association president, does not own any Meridian units, but is the officer of a corporation that owns three units, said Melody Cannon of B&P Public Relations, which is handling the newspaper's communications with Mackenzie.

According to a county report, the Meridian has 678 units but only about 12 owners living in their units.

Most of the 50 or so people gathered May 18 around a Meridian swimming pool were short-term paying guests. Many praised the Meridian's rates, which ranged from $119 to $169 for a two-bedroom "suite," according to Kirk Wayne of Melbourne, Fla., who was in town for a convention.

Renting the condos as hotel rooms is difficult, however, because of falling room rates on the Strip, Mackenzie said at a June 16 homeowners meeting. Once the economy picks up, the Meridian will better undercut the Strip's rates, he said.

"The hotel operation still has 400 units. At the hotel, we are only renting out 190 rooms," Mackenzie said.

Mannix has said she won't sign the final map for the transformation into a condo resort. But not all investors want the hotel operation halted.

Las Vegan Ron Chapman, who with his wife owns two Meridian units, has contacted fellow owners by e-mail in support of the hotel, to urge them to protect their investments. Both his units are in the pool for short-term rental. Chapman, a real-estate agent, also has clients who bought at the Meridian as an investment.

Almost 6 percent of the units at the Meridian are either in foreclosure, are being sold at foreclosure or are being sold "short," Mackenzie said.

In a short sale, a lender agrees to proceeds that fall short of what the buyer owes on the mortgage, often to avoid the costly foreclosure process.

The Meridian units are now worth only about 50 cents on the dollar, Mackenzie said.

In his e-mail, Chapman said the Meridian fell victim to the real estate downturn.

"It's no secret," he wrote, "that the Las Vegas real-estate market has given back most if not all of its gains, and that homeowners' equity .... over the past two years, including Meridan's, has vaporized."

He urges homeowners to oppose Mannix, whom he characterizes as "one bad apple (who can) jeopardize Meridian's future and our personal holdings there."

The Meridian was converted from apartments to condos in 2005 by Chicago-based American Invsco.

Contact reporter Valerie Miller at vmiller@lvbusinesspress.com or 702-387-5286. Contact reporter Joan Whitely at jwhitely@reviewjournal.com or 702-383-0268.