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City of Las Vegas wants $270K of back pay from Neonopolis

The city of Las Vegas is seeking nine years’ worth of back payments — more than $270,000 — from the operators of Fremont Street retail center Neonopolis.

An audit of the city’s Parking Services division revealed Neonopolis has not paid for its share of operations, maintenance and repair costs since Aug. 5, 2008, and oversight of the outstanding funds fell through the cracks at the city.

“Why did it take an audit to find he owed us $270,000?” Councilman Stavros Anthony inquired this week.

An agreement between the city and Neonopolis lays out shared costs for the city’s underground parking garage and Neonopolis, the roughly 250,000-square-foot privately owned retail center that sits on top of it, for things like the elevator system, emergency generator and the fire pump room.

After the audit uncovered the unpaid funds, the city in March sent a certified letter requesting payment. That went unanswered, and on April 20 a demand notice went out, requesting payment within 30 days.

Neonopolis owner Rohit Joshi wrote back to the city the following day, contending he stopped receiving “any and all bills from the city from 2013 and concluded that since the city of Las Vegas were selling parking to other downtown businesses the city may have forgone cost sharing from the Neonopolis Building owner.”

In that letter, Joshi disputed some of the city’s charges, and the city removed $26,000 from the balance, bringing the current amount owed to $274,075, city Communications Director David Riggleman said.

Joshi has asked the city to clarify several items in the agreement, which he suggested be altered and simplified. Joshi also contended in his April letter that his company spent more than $102,000 to replace the fire alarm system, “however we never asked the city for any reimbursement even though the system benefits the parking garage also.”

“It’s less about the amount and more about what are these items for and should the city pay or should we pay,” Joshi told the Review-Journal on Monday.

Change in procedure

In the past, an annual bill was sent to Neonopolis. Now, the balance due is tracked in the city’s Oracle financial software system, Parking Services Manager Brandy Stanley said.

“Now we’re doing that with all of our other contracts so this type of thing doesn’t happen again,” Stanley said.

City Manager Scott Adams characterized the retail complex’s past as “a very checkered history.” Neonopolis, a $100 million building project on the high-profile corner of Fremont and Las Vegas Boulevard, was finished in 2002 and struggled to retain tenants. Joshi bought it four years later for a quarter of the price.

Councilman Bob Coffin said he heard about Neonopolis being in arrears in a June 29 audit memo. He called the situation an “embarrassment” and a “remarkable shortage of money.” After discussing it at length at a Monday meeting, the city’s Audit Oversight committee tabled the issue, and Coffin asked the city’s legal staff to brief the rest of the City Council.

Neonopolis made a $28,831 payment in 2007 and a $30,375 payment in 2008. Three other city requests for annual payment in 2009, 2011 and 2012 went unpaid. Required financial statements from the Neonopolis operators fell off after 2011, the city audit found.

Deputy City Attorney Jack Eslinger said the city will make a formal request for audited financial statements.

Contact Jamie Munks at jmunks@reviewjournal.com or 702-383-0340. Follow @JamieMunksRJ on Twitter.

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