Tuesday, March 11, 1997 | 11:59 a.m.
The City Council voted to approve a lease deal for the Rainbow Vegas Hotel, which it recently purchased, after being told by its staff that the transaction would allow a "smooth winding down" process for the gaming property.
The city plans to eventually use the site for some public use -- perhaps a justice complex, city jail or even a new City Hall to replace the 25-year-old facility that can no longer contain all of the services for one of the fastest growing cities in the United States.
The City Council, acting as the Downtown Redevelopment Agency at a meeting Monday, agreed to pay $5.3 million for the hotel-casino at 401 S. Casino Center Boulevard, across from the Clark County Detention Center.
Also as part of Monday's meeting, the redevelopment agency agreed to take out a $5.3 million loan from the city to buy the property and pay it back interest-free at $33,235 a month for the next five years.
The lease deal is good for one year with an option for two months. The old owners of the resort, Rainbow Vegas Hotel General Partnership, will pay a monthly rent of $33,235 to the redevelopment agency for the property that has slot machines and video poker but no gaming tables.
By structuring the deal this way, the city secures ownership of what it says is a major piece of downtown office district land, stays out of the hotel-gaming business, which it helps regulate, and gives the old owners time to phase out of the business.
The 12 to 14 months the city is giving the Rainbow Vegas to remain in business also gives the city time to make up its mind just what to do with the building and land.
The city entered into the deal to purchase the property last Oct. 25. The lease will begin with the close of escrow, slated for March 24.
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