DOJ wants Clark County to pay $75.5M for Bali Hai Golf Club

The federal government is demanding Clark County pay $75.5 million in underpaid rent for the Bali Hai Golf Club.

In a letter to the county dated Aug. 18, U.S. Department of Justice attorney John Kresse wrote that a 2011 amendment to a lease between the county and gambler Bill Walters set the 155-acre property’s $100,000 annual rent below fair market value, thereby violating the Southern Nevada Public Land Management Act (SNPLMA).

County Commission Chairman Steve Sisolak said the county sent the new deal to the Bureau of Land Management for approval, but never heard back.

“They didn’t approve it. They didn’t deny it. They just sat on it,” he said. “We’ve been stuck in limbo.”

The county has managed the BLM-owned property since 1999 under SNPLMA.

The county must begin making payments by Sept. 1 or risk being charged pre-judgment interest, the letter states. But county spokesman Erik Pappa said there are no plans to pony up.

“We dispute our liability for back rent but welcome discussing it further with the DOJ,” Pappa wrote in an email.

The letter states the county owes $12.5 million in underpaid rent so far. It also projects that almost another $63 million will be underpaid through the remaining term of the lease.

Potential parking not affected

Bali Hai was once considered a potential site for an NFL stadium. Now it is on a list of proposed solutions for the nearby stadium site’s lack of parking.

Paving the 18-hole course, located on the Las Vegas Strip south of the Mandalay Bay hotel-casino, could provide as many as 13,000 parking spots close to the stadium site at Russell Road and Dean Martin Drive. That would cover more than 90 percent of the off-site parking the county is requiring for the 65,000-seat stadium.

Sisolak, who has been heavily involved in bringing the Oakland Raiders to Las Vegas, said the DOJ’s allegations would not stop anyone from building on the golf course.

“Their beef, if there is a beef, is with the county, not the tenant,” Sisolak said. “No matter what anyone wants to do with it — if you want to put a parking lot, shopping center, orange grove — you’ve got to buy Bill Walters’ interest in the lease.”

No profit

Walters and the county entered a profit-sharing lease for the property in 1999.

In that lease, set to last 99 years, the county was to get 40 percent of the golf course’s net profit. Most of the money would be given to the BLM under SNPLMA. But the county and federal government didn’t receive a dime for more than 10 years because the course wasn’t profitable.

County commissioners voted in 2011 to change the rent to a flat $100,000 a year while Walters sought to replace the course with a warehouse and shopping center. Under that amount, the BLM receives $85,000, the Clark County School District receives $10,000 and the county-run McCarran International Airport receives $5,000.

The terms of the lease remain unchanged.

Walters was sentenced to five years in prison and fined $10 million by a Manhattan federal court judge last month for insider stock trading.

Contact Michael Scott Davidson at sdavidson@reviewjournal.com or 702-477- 3861. Follow @davidsonlvrj on Twitter