On the eve of decision, golf plans have holes

On the eve of a critical vote, the on-again, off-again negotiations between the two top contenders for a new golf course on the Las Vegas Strip are off again.

And the last-minute addition of a popular local sports figure to an underdog third-party bid for the project has added a new wrinkle to the dilemma facing the Clark County Commission on Tuesday.

The commission's scheduled vote will be fraught with consequences, and not just for the winner and losers among the three competitors vying to build a golf and recreational facility on 160-odd acres of desert on Las Vegas Boulevard South, just south of the Mandalay Bay hotel-casino.

The vote could cost Southern Nevada a chance to host a Formula 1 championship race, run afoul of federal law governing the use of public lands, anger officials of a multi-billion-dollar casino company that's the state's biggest political contributor, and alienate thousands of avid local golfers hoping for relief from some of the highest greens fees in the nation.

All three proposals apparently fail to comply with laws that prohibit leasing public recreational land to for-profit companies.

In addition, their financial projections are based on a two-tiered greens-fee structure, with Clark County residents paying substantially less than tourists for a round of golf. And the bids all propose allocating about half the available tee times for use by local residents. But according to the Bureau of Land Management, such practices are prohibited because they treat some citizens more favorably than others. So, because their financial projections are based on an average of local and tourist greens fees, the three proposals would have to raise the proposed local rates to comply with federal law.

The BLM leases about two-thirds of the land to the county, and the remaining acreage is controlled by the Clark County Department of Aviation but subject to BLM guidelines.

Alternatively, the winning bidder might negotiate for a less expensive project, which would reduce the quality of the course. Or it may come up with an alternative that would subsidize lower greens fees.

One proposal does the latter. Yet it has generated fierce opposition not only from the competing bidders, but also from a handful of Southern Nevadans who have their own reasons for wanting to kill it.

That proposal calls for staging a once-a-year Formula 1 Grand Prix race on a 2.9-mile track that weaves through an 18-hole public golf course.

The plan by US/GP-LV Partnership proposes a $55 million investment in the golf course-racetrack complex, additional money for track setup and staging the race, a minimum annual lease payment to the county or the BLM, and an offer to rent at least 36,000 room nights from neighboring hotel-casinos at premium rates.

The US/GP partnership includes Las Vegas political consultant Sig Rogich; OB Sports of Nevada, which manages such local courses as The Legacy and Angel Park; and Tommy Baker, president of the partnership and a related company backed by a Canadian real estate investor. (The Greenspun family, which owns of the Las Vegas Sun, holds a minority stake in OB Sports.)

A second bid, by The Walters Group, which owns the Desert Pines and Stallion Mountain golf courses here, calls for spending $33 million to build an 18-hole, 7,000-yard course and a nine-hole, par-3 layout.

The company is controlled by Las Vegan Bill Walters, a heavy contributor to local political candidates and a successful gambler and businessman whose organization won County Commission approval to develop another BLM site off West Flamingo Road as its third Las Vegas golf course.

But development of that project is stalled as Walters negotiates with the BLM over interpretation of guidelines that prohibit using public recreation land to build courses charging higher fees than prevailing rates on other municipal courses and different fees for different categories of players.

The third bid is from Dallas-based Club Corporation of America, which has linked up with longtime touiring golf professional Gary Player and -- in a bid to drum up local support -- tennis star Andre Agassi of Las Vegas in proposing a $16.3 million development that would include an 18-hole golf course and tennis courts.

US/GP and Walters Group executives criticized the proposal by CCA/Player/Agassi because neither Player nor Agassi are investors in the plan. The critics also complain that CCA more than doubled its proposed investment, in violation of bidding rules, after it saw the size of the competing proposals.

"It's obvious to CCA their bid wasn't competitive," Walters said, "so they tried to align themselves with a prominent local sports figure. But no one was allowed to materially change their bid, and the County Commission shouldn't accept it."

Backers of the US/GP bid said it would generate worldwide exposure of Las Vegas to 500 million television viewers annually, draw tens of thousands of free-spending race fans to a city hungry for more visitors, pump more investment into Southern Nevada and guarantee greater annual revenue to Clark County than the other two proposals combined.

But some opponents have been lobbying for a delay of the vote, saying that more time is needed for clarification of BLM rules.

A delay would cause Formula 1 czar Bernie Ecclestone to select one of four other cities as the permanent site for a U.S. Grand Prix. That would cost Las Vegas a chance to host the annual event and cut the golf-course competition to just two entities, with Walters holding a decided edge because of his political connections here.

"This is a city that has prioritized Europe for its foreign marketing efforts," said Rogich, also well-connected politically. "Why wouldn't they want to seek out the biggest annual European spectator event?

"This is a sport that pays its top driver $125 million a year. That's how big it is. If there's a delay in the vote, we lose it. And once we lose it, it's gone forever."

US/GP officials said a delay would also benefit the developers of the Las Vegas Motor Speedway, which opposes a Grand Prix race here not only because Ecclestone considers LVMS unsuitable for a Formula 1 race but also because Indy Racing League President Tony George has promised a second IRL race to the local track if Indianapolis gets the F-1 race.

Indianapolis is considered the leading alternative site for the race, with Dallas, San Francisco and Atlanta the other contenders.

LVMS Chairman Richie Clyne said the US/GP allegations are "totally, totally false."

"Because I was one of the early supporters of IRL, I can have a second date in the future when the sport warrants it," he said.

"That's the first I've heard of those allegations," Indianapolis Motor Speedway spokesman Fred Nation said. "I know the owners of the Las Vegas Motor Speedway want more races, not just IRL races but others as well.

"There has been some consideration about a second IRL race in Las Vegas, but it will depend a lot on how we do there this year. We had a very good first year, not a very good second year, and we hope this year will be better."

Earlier this month, the Sun reported that advance ticket sales to the fall IRL race here are running behind those of previous races. An LVMS executive said the October event is expected to draw 30,000 to 40,000 spectators.

"We've been negotiating with Formula 1 and Mr. Ecclestone since last year, and all of those conversations have only involved the Indianapolis Motor Speedway," Nation said.

"He hasn't used any of the other potential sites as a lever in talks with us, and we haven't paid much attention to the other cities mentioned as alternatives to Indianapolis.

"Our goal has just been to go straight ahead with our talks with F-1 and we think we're very much in play."

Circus Circus Enterprises Inc. also appears ready to weigh in against the Grand Prix proposal even though US/GP has offered to pay "rack rates" for 12,000 rooms for a minimum of three nights at the company's Mandalay Bay, Luxor and Excalibur hotel-casinos just north of the proposed Grand Prix site.

The reason, US/GP officials said, is that Walters has promised priority tee times to Circus Circus, which long considered developing its own golf course on the property. At one time, in fact, Circus and OB Sports looked into jointly developing the land.

But when the casino company learned that the Recreation and Public Purposes Act required the course be open to the public and couldn't be used to provide select tee times to its customers, it decided not to proceed, according to US/ GP.

"We did look at the process and decided it would be best for the company not to file" its own bid for the land, Circus Circus spokeswoman Sarah Ralston said. But she denied that Walters had promised preferential tee times for Circus customers.

"There's no deal with anyone. We're not part of any deal for the property. The company can't make decisions based on personalities and conspiracy theories.

"All three groups have been in to see senior executives from the company within the past week," Ralston said. "We're not going to make our decision on which one to back based on friendships but on the most compatible use of the land. We'll come to a conclusion and communicate our views to the County Commission."

She indicated those views aren't likely to please the Grand Prix promoters.

"They made some overture about locking up some rooms, which we likely would not be interested in pursuing."

US/GP's Rogich and Baker said Circus executives were quite interested in such a proposal -- until they met privately with Walters last Tuesday. US/GP and Walters had discussed joining forces for several weeks, but those talks ended abruptly after the meeting with Circus.

Walters said the talks with US/GP group won't be resurrected.

"The chances of doing a deal with them are zero, zero and zero," he said.

Walters said he told Circus executive Mike Sloan that "I'm totally dedicated to working with our customers. If Circus and Mandalay Bay are next door, we'll try to make them happy.

"This will be the gateway to the Las Vegas Strip. If there's a racetrack on it, you'll have a Mickey Mouse golf course."

"A Mickey Mouse course?" Baker questioned. "It's better than a miniature golf course, which is all he can afford to build under the guidelines.

"Every one of the bidders has to cut 35 to 40 percent off the anticipated gross revenues that we put in our last proposals because of the BLM's recent clarification of the rules," he said.

"That murders the rate of return on investment and makes all the proposals unviable as a golf course alone. That's why nobody else in the golf course industry but Billy Walters bid on the West Flamingo site -- they couldn't make the numbers work.

"We can't, either -- as a golf course alone," Baker said. "But what we can do is build a $30 million golf course that all the public can use at municipal course rates for 50 weeks out of the year because we're subsidizing it with a race.

"The reality is, all he's trying to do is eliminate us by making promises to Circus Circus that he can't keep. Then he can come back a year from now and put in a $12 million golf course, because that's all the rates he'll be forced to charge can support."

Walters' $33 million bid doesn't call for any payments to the county for 10 years, but he said that doesn't mean his course would lose money for 10 years at the proposed rates.

"What we'd be doing is paying off our own investment and the debt service," Walters said. "If the county wants us to pay $500,000 a year like Tommy Baker has offered, we'll do it."

He also downplayed concerns about violating BLM guidelines.

"A lot of people really don't understand the process," he said. "Whoever gets selected by the county Tuesday still has to negotiate with the BLM. And if somebody were to enter into a lease directly with the BLM, the law Baker's talking about might apply.

"But if the lease is with the county, the county makes the rules," Walters said.

A July 27 letter from Nevada BLM Director Robert Abbey and conversations with public information officer Bob Stewart indicate that's not the case.

The letter said the law prohibits greens fees higher than those "charged at other comparable installations managed by state and local agencies," fees "based on other commercial golf courses in the same market" and "limitations placed on tee times to the general public due to 'complimentary passes' distributed by outside entities."

"The existing law precludes you from developing a project that's private," Steward said. "The county has to operate a public facility that's open to everyone."

"The BLM told us we could apply for a special-use permit once a year, which would allow us to fulfill the obligations of the act and still run a race that could subsidize a first-class golf course," Rogich said.

All three groups agreed that Tuesday's vote won't end the negotiating process with whatever public agency ultimately controls the project. And it'll be a long time before the first ball is struck.

"There's still hundreds of things to be resolved," Walters said. "I'd be shocked if whoever gets selected turns over any dirt on the site before two or more years passes."

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