City may cut license fee to spur arts area nightlife

By Sam Skolnik

Sunday, Oct. 25, 2009 | 2 a.m.

Three years ago, Las Vegas created a new business designation — the “urban lounge,” a kind of cross between a bar and a nightclub tailored to the downtown arts crowd.

Gallery and shop owners and other local denizens were enthusiastic about the concept, envisioning a hip and growing nightlife scene that would heighten the arts district experience.

But no such lounges have opened, even though at least four have been approved by the City Council.

Some in the arts district say this is in large part because of the steep initial license fee demanded by the city — $50,000 — which they’d like to see cut as an incentive for businesses to move into the area.

The city is hearing these concerns — as well as those within the Fremont East District, the small entertainment strip near the downtown casinos where growth has slowed to a trickle in the past 18 months.

Within a few months, city officials say, they will put forth an ordinance to temporarily waive the upfront liquor license fees for urban lounges, as well as the special “tavern-limited” licenses needed to open a bar or club in the Fremont East District. The initial tavern-limited licenses are $20,000.

City officials predicted the waiver could be in effect for as long as a year.

City officials clearly believe this is what must be done to attract business to these areas, especially during the recession, which has stalled several key downtown projects.

But can a cash-strapped government afford to give up that kind of money?

Bill Arent, director of the Office of Business Development, says yes. It’s the goal of the business licensing department, he says, simply to recover costs and break even. The department can do that through the additional licensing fees and taxes the city would collect with new businesses open and operating in the areas.

“The idea is, we haven’t had a lot of activity in these districts lately,” Arent said. “We’re looking to do what’s best for both of these areas.”

The fee waiver goes to the heart of Mayor Oscar Goodman’s philosophy: Increase business, buzz and energy downtown at virtually any cost. Development, he believes, even on a small scale, begets more development, and that is the way toward a vibrant and livable urban core.

It appears Goodman is behind this latest effort. For several months, he’s been in discussions with an arts district power broker, studio photographer Westley Myles Isbutt.

Isbutt — who goes by the professional name Wes Myles — owns the Arts Factory and created the Las Vegas Arts District neighborhood association. He’s also one of the few businessmen who has received council permission to open an urban lounge but says he can’t afford to do so.

Isbutt has been pressuring city officials, including Goodman, to reduce the fee from $50,000 to $10,000. In a March 24 letter to the mayor, Isbutt wrote that if his own urban lounge idea were brought to fruition it would have a ripple effect.

“The Urban Lounge I personally have been working so hard to build will definitely impact the Arts District architecture, cultural and entertainment offerings, provide real jobs and activate a chain of positive changes in our local economy,” Isbutt wrote.

Goodman has been responsive, Isbutt said. In a recent conversation, he said the mayor promised: “Wes, I’m gonna take care of that for you.”

The urban lounge was designed to be a slightly different creature than the typical downtown bar. There has to be twice as much table seating as bar seating, to give the place a “loungy” feel. Moreover, the number of slot machines is limited to about a half-dozen.

There are incentives to make it easier for lounges to open in the arts district. The existing upfront license fee is $10,000 less than the regular city tavern license fee of $60,000. Plus, there are fewer restrictions on how close an urban lounge can be to similar businesses.

These small breaks haven’t been enough for the arts district nightlife scene to break through.

Cindy Funkhouser, founder of the First Friday monthly arts district celebrations, said she’s in favor of the effort to lower or eliminate the licensing fees for urban lounges. If such lounges open, she said, it will spur galleries to stay open later, and will prompt additional new businesses like cafes and coffee houses to move in.

“We really need to start energizing the evening business down here,” Funkhouser said.