Marathon must put up bond to cover expenses

The owner of the Las Vegas Marathon has made significant headway toward paying off vendors from the race's 2007 running, but Clark County Commissioner Rory Reid is determined not to let that situation repeat itself as the event goes forward.

Reid informed Chicago-based Devine Racing on Tuesday that a security bond will be required to guarantee all operating expenses will be covered for the 2008 race, set for Dec. 7. The company had not been required to post a bond since taking over the event in 2005.

Reid is giving Devine Racing two weeks to get the bond in place.

"It's in the public interest to make sure this race is run. It's good for Las Vegas," Reid said. "But we need to make sure we don't have the issues we've had in the past and that people are promptly paid. We need to do what's necessary to protect the credibility of the event and the community."

Reid's initial request was for a bond of $3 million, which Devine Racing would have to pay a percentage of to acquire. Company president Chris Devine said he understood Reid's desire for the bond.

"I just think it gives everybody a comfort level, and it puts all of this behind us," said Devine, though he put the operating costs of the event at $1.8 million and said he hopes to work with Reid on adjusting the amount of the bond. "Whatever the number winds up being, I'm sure we'll be able to reach an agreement."

Reid said he would be amenable to a lower bond if Devine can provide proof of the company's costs to run the event.

"The bond will be based on what the historic costs of this race have been," Reid said.

He declined to speculate on what would happen if the deadline isn't met. "I'm hopeful we won't have to go there and that Devine will make good on this," Reid said.

The security bond requirement stemmed from two consecutive years of prolonged delays in paying off vendors and runners. Money winners from the 2006 marathon weren't paid until the week before the 2007 race. Following that, Devine Racing stated that money winners from the 2007 race would be paid within 90 days -- March 1.

On Monday morning, 2007 men's winner Christopher Cheboiboch of Kenya finally got a check for $24,000, covering his winnings and an appearance fee, minus taxes.

Most of the vendors from the 2007 marathon -- and in some cases the 2006 race -- also weren't paid until this summer, after Devine Racing sold the Chicago Half-Marathon and entered into an agreement to sell the Los Angeles Marathon, for which it has received two nonrefundable deposits totaling $600,000.

In June, Devine stated that proceeds from the closing of the Los Angeles sale would be used to clear the company's debt in Las Vegas and Los Angeles. However, he amended that statement this week, noting funds from the Chicago Half-Marathon sale and other influxes have been enough to get the company back on firm ground in Las Vegas.

"When we sold our Chicago race, we re-capitalized the company with that, the (Los Angeles) deposits and the (2008) entries for Las Vegas," Devine said. "We will have more than ample capital to put on this year's race. Our cash reserves are well stocked.

"Right now, we're not relying on the Los Angeles sale. In no way will it impact the Las Vegas race."

That puts Devine Racing in a fortunate position, because closing for the L.A. Marathon sale -- initially targeted for July 17 -- has been pushed back to Sept. 15, a delay Devine said was requested by the buyers, Los Angeles media executives Russ Pillar and David Kingsdale. However, a source close to those negotiations said the closing also has been prolonged as the City of Los Angeles works toward getting all it remains owed from Devine Racing -- estimated by that source at more than $500,000, covering the 2007 and 2008 races.

Devine, while reiterating the L.A. sale no longer has any financial bearing on the Las Vegas Marathon, said the City of Los Angeles bill will be handled as part of the sale closing. From there, he said, the company's intent is to focus on the Las Vegas Marathon.

"Priority No. 1 has been to clean up the balance sheet and the issues in Las Vegas -- there's virtually no other reason to be selling the Los Angeles race," Devine said. "We want to make sure we preserve the opportunity we have in Las Vegas."

Reid is on board with Devine in that sentiment. Hence the mandate for a bond.

"The point of the bond is to make sure the race is run and that people will be paid," Reid said. "This race has to continue in a way that involves prompt payment to everybody involved."

Contact reporter Patrick Everson at peverson@reviewjournal.com or 702-383-0353.