At the northern edge of downtown’s Glitter Gulch, just south of the old post office along Third Street, Las Vegas redevelopment efforts have a toehold of notable success in the Hogs and Heifers tavern and the highly rated Triple George restaurant.
But in February 2006, right across the street, the Lady Luck casino closed, putting 700 people out of work.
The owners promised a renovation and vowed to reopen within a year. They didn’t.
“For the past several years I have seen a rotting corpse,” the always silver-tongued Mayor Oscar Goodman said of the property last week. “The Lady Luck structure has been a blight.”
It seems Andrew Donner of the Henry Brent Co. had trouble putting together the financing to renovate and re-open the Lady Luck. So he brought in the Hollywood-based CIM Group, which has spent a year negotiating with the city for a small park and other property around the old post office to the north.
Officially, CIM officials say they need more “elbow room” to pull off a Lady Luck revival. Over time, that “elbow room” has grown to include 200,000 square feet north of Stewart Avenue between Fourth Street and Casino Center Boulevard — locale of the old post office and the current municipal bus station.
“That block has potential for unrestricted gaming,” explains Scott Adams, director of the city’s Office of Business Development.
Such zoning would increase the value of the land in question from $15 million to $28 million, assessors say.
The Las Vegas City Council voted unanimously Wednesday to approve the CIM plan, offering the land in question at $12 million below assessed value in exchange for an undertaking from CIM to invest at least $100 million on Lady Luck renovations and begin construction by Dec. 31, 2009 — completing the project by Dec. 31, 2011.
The council approved the plan over the objections of Chris Bohner, research director for Culinary Local 226, who warned the markdown on the property price “sets a very dangerous precedent for the city. … Every other casino developer in this town … they are going to ask for this deal, too.”
Mayor Goodman criticized the union for trying to scuttle what he sees as the best available proposal to reopen an empty property.
“This is no giveaway,” the mayor said. “This is not a candy store. We are getting offers for land when nobody is buying land.”
Both Mr. Bohner and the mayor are right. But — at the risk of invoking George Orwell — the mayor is more right. The City Council does have an unfortunate — almost incestuous — tendency to offer what appear to be sweetheart deals to existing downtown land barons, forgoing the opportunity to issue public invitations to bid that might draw even more attractive proposals from parties yet unknown.
That said, however, Mr. Bohner’s own motivation is puzzling. Why would a local union not want to see 700 — or more — jobs restored to the struggling downtown? Does the Culinary want to put up $100 million or more on a plan of its own to expand or build a new casino downtown? Does it have a better candidate with checkbook in hand? Or would it rather see these properties stand vacant than have them opened by parties who refuse to cut them in for a piece of the action, in advance?
The downtown has been in an economic doldrum for years. The underlying problem is structural. With the exception of the Golden Nugget, most downtown hotel/casino properties stand on too small a “footprint” to allow expansions with the larger rooms, express service elevators and other amenities necessary to compete with newer properties along the Strip to the south.
The answer is to get some bigger, consolidated pieces of real estate into the hands of developers who will do just that.
In years past, an attitude of protectionism blocked entrepreneurs from entering competition with the existing downtown casino barons. Things seem to have gotten bad enough that the City Council is finally willing to welcome anyone with a bankroll who wants to build or renovate a downtown hotel.
Good. That’s more of the fresh blood the downtown needs.
Though someone should at least review this deal, to find out what happens if CIM fails to meet its promised deadlines.