Property warned on short rentals

Clark County has determined that the Meridian Luxury Suites on Flamingo Road, just east of the Strip, is illegally renting condominium units for overnight use. The Meridian also lacks, according to the county, the type of business license required to operate what the law calls "transient lodging."

The Meridian, near the northeast corner of Flamingo and Koval Lane, is in the process of converting its upscale condominium units from owner occupancy and long-term rentals only, to resort condo use as well.

But by renting units short term before the conversion is complete, the Meridian on Friday drew a stern letter from the district attorney's office.

"You ... must immediately cease and desist from violating the provisions of the Clark County Code," Deputy District Attorney Robert Warhola wrote in the letter, dated Friday, to Michael Mackenzie at the Meridian address, 250 E. Flamingo Road. The letter said the office had received complaints of leases "for rental periods of less than 30 days."

The upscale property's practice also has caused friction with resident owners -- who bought without the expectation that their neighbors might change nightly. The situation also has generated the need for an audit of potential room taxes.

Stacey Welling, county spokeswoman, verified Friday that the business license department has to look into whether the Meridian has been collecting, and turning over, the room taxes that apply to transient lodging. The district attorney's letter also notes that when condos are used for transient lodging, a $300 annual license fee must be paid for each unit.

"Staff of the Meridian Private Residences Homeowners Association has been working closely for months with Clark County," reads a written statement that Mackenzie issued Friday morning, after the Review-Journal requested an interview.

Mackenzie, who is the association's president, said in the statement that Meridian believes it has submitted all the paperwork required for the conversion. He expects it will receive the county's final approval of the conversion by mid-July.

But Welling contradicted that assertion later Friday.

"They have approval for the special use" of renting short term, but have not yet met all the mapping and licensing conditions to actually operate the special use.

The county office for code compliance issued a violation notice on June 6 to the Meridian, which tells management it may face criminal prosecution if overnight resort use doesn't stop by July 1.

The Meridian also received a June 10 violation notice from the county's business license department, ordering it to "immediately" correct its lack of the proper license. Various entities associated with the Meridian currently hold licenses to sell condo units and to occupy an office to administer the homeowners association, but not to rent units overnight, Welling said.

The Meridian is the same property that county fire and building officials have been investigating for improper plumbing work that only recently came to light, which may have jeopardized fire safety for eight months in one of the five-story buildings at the ritzy address.

The Meridian is already located in a zone that allows transient lodging. But in order to expand its uses, by state law the property must submit a final map with signatures of approval from all condo owners, Welling explained. So far, the Meridian has submitted only a tentative map, which does not require signatures.

The Clark County Planning Commission is expected to look at the tentative map at its July 15 meeting. If the commission approves it, then the Meridian would next submit a final map, which needs to pass a county administrative review before it is recorded. After recording, then the county can issue the business license for transient lodging.

Friday afternoon, Mackenzie conveyed to the newspaper that he would not discuss how long the Meridian has been renting rooms by the night, or whether it was collecting room taxes.

"They've issued the (written) statement. And beyond that, they've declined further comment," said Melody Cannon of B&P Public Relations, who passed along Mackenzie's decision.

Several Meridian guests, who were sunning poolside on May 18, told a reporter they had paid for short stays.

Melbourne, Fla., resident Kirk Wayne, marveled at the low room price his wife booked online for a spacious suite for him at the off-Strip location. He expected to stay at the Meridian for four days while attending a convention.

"She said, 'Cancel (the Venetian reservations),'" Wayne recalled. He said he was paying $119 a night during the week and $169 on the weekend. "The cheapest room at the Venetian was $400," Wayne added.

Another guest, Ian Schmidt, described the Meridian as "the cheapest hotel I ever stayed at." He reported paying only $800 for a five-day stay for his party of six from the Midwest.

"I didn't realize until 10 seconds ago that people actually live here," Schmidt said.

Kathleen Mannix, who owns the Meridian unit in which she lives, believes the property has been doing overnight rentals since at least May 2007, when she moved in. She said no one informed her at the time of her purchase about the short-term rentals.

"I could tell. People were coming with suitcases," she recalled. When challenged to prove that the visitors were paying by the night, she did Internet research that turned up guest reviews of the Meridian accommodations, dating back to early 2007, posted on a travel web site.

At a Monday meeting of the Meridian Private Residences Homeowners Association, Mackenzie gave no indication that the hotel operations had ceased. In fact he discussed short-term rentals available that day, according to a tape recording given to the newspaper.

The hotel operation involves 420 of the of the property's 678 condo units, Mackenzie told his audience. But only about half of the 420 are being rented. He cited the sagging economy as the reason that more units are not being rented out in the hotel operation.

"Keep the Meridian a beautiful oasis ... and don't try to make it a Strip attraction," one resident, who did not identify himself, pleaded at the meeting.

Lebene Ohene, an assistant manager of special projects in the county's planning department, described the Meridian conversion to resort condo as the county's first in which a property wants to expand from residential occupancy to include transient lodging.

In other cases, hotels, such as the MGM Grand, have expanded from transient lodging to residential occupancy. In some recent cases, projects also have been designed for both types of use, so that residential units are not interspersed with short-term rentals, but separated by wing or floor.

Contact reporter Joan Whitely at jwhitely@reviewjournal.com or 702-383-0268. Contact reporter Valerie Miller at vmiller@lvbusinesspress or 702.387-5286.