Sunday, Feb. 20, 2000 | 9:38 a.m.
A secretive and powerful family that controls a worldwide development empire, including some of the largest and most well-known malls in North America, has quietly been acquiring an extensive real estate portfolio in the Las Vegas Valley.
Beginning nearly 15 years ago, when they played a key role in developing Peccole Ranch, a quartet of Iranian-born Canadian brothers has quietly amassed some high-profile Las Vegas properties while steadfastly avoiding publicity themselves.
If not for a controversial plan to develop a neighborhood casino in Spring Valley, the family probably could have kept out of the public eye. But their effort to establish a 300-room, eight-story casino in the heart of a residentially zoned area sparked protests from hundreds of nearby residents, a controversial Clark County Commission vote, a lawsuit and a state appeal panel to review that vote.
Citing the family's penchant for privacy, representatives of the Ghermezians' business interests here and in Canada emphatically declined to answer any questions about the family or their businesses.
Keeping the Ghermezian name out of the newspapers has been a goal of the family for two decades; only a handful of reporters have gotten access to the family. But a few facts about the family have come to light.
Brothers Nader, Eskander, Raphael and Bahman Ghermezian are the heart of the family's business interests. And the family's development efforts frequently land them in court.
The family arrived in Canada in the late 1950s from Iran, which was then experiencing political turmoil. The family patriarch, Jacob Ghermezian, built a chain of Persian rug stores and remained an important figure within the family until his death earlier this year.
The family moved to Edmonton, Alberta, in the 1970s, and began amassing their source of wealth and legal troubles -- land. The family, living behind a walled compound, turned residential scrubland on the city's west side into the world's largest shopping center.
Since then, the Ghermezians helped build and still retain about one-quarter interest of the Mall of America in Minneapolis, the largest mall in the United States.
By the 1980s, the family was looking for new places to invest.
While some of those other investment opportunities went sour, notably a large mall outside Washington, D.C., the family has done very well in Las Vegas.
A search of the Nevada secretary of state website shows that the Ghermezians and their close business associates are principals in at least 34 companies registered in the state.
Among them: Triple Five Nevada Development Corp. and other Triple Five incarnations, Village Square-Dana Park, San Vincente Estates, Santa Teresa Estates, Malone Manor, Silverado Ranch, Maryland Hills, Pebble Commercial Center, Wellington Homes and numerous others.
Besides the Spring Valley development, of which the controversial casino would be just a part of a 110-acre mall, the Ghermezians have or had financial interest in Boca Park, a sprawling commercial development in Summerlin; Village Square; Colonnade Square; and the original 600 acres developed at Peccole Ranch.
Even those who know the Orthodox Jewish family -- such as Clark County Commissioner Mary Kincaid -- are surprised by the level of the brothers' investment in the Las Vegas Valley.
All of those who have dealt with the family describe them as deeply private, but also intensely combative. They also are described by journalists and politicians who have dealt with the family as hard-as-nails political and legal operators.
The family has been dogged by lawsuits and charges of improper influence over public officials since the 1970s, when the Canadian government called a Royal Commission -- a court of judicial inquiry -- to investigate allegations of bribes paid to Edmonton City Councilors.
The City Council had changed residential zoning to allow the family to develop the sprawling West Edmonton Mall.
The commission found that "gifts," including $40,000 to one councilman, had been offered -- but also found that no laws had been broken.
The family is often lavish with political contributions, in the United States and in Canada, to local officials who control land-use decisions, reporters familiar with the Ghermezians' business practice agree.
That was true in the Spring Valley casino approval. Above the protests of nearby residents, County Commissioner Lance Malone swung his vote to "yes" to allow the controversial proposal to move forward.
Election documents show that Malone received more than $22,000 in campaign contributions last year alone from companies controlled by the Ghermezians, company principals or their family members.
The two other "yes" votes on the County Commission for the casino also received sizable contributions from the Ghermezians and their associates last year. According to campaign finance reports, Kincaid received more than $35,000 from them in 1999 and Commissioner Erin Kenny more than $13,500.
Commissioner Yvonne Atkinson Gates, who abstained on the vote, received $21,000. Commissioners Myrna Williams and Bruce Woodbury, who also did not vote on the issue, did not get any campaign contributions from the family in 1999.
Commissioner Dario Herrera, the lone vote against the casino, also did not receive anything from the Ghermezians.
Opponents have turned to the courts and a Nevada state appeal process to block the casino.
Reporters in Canada -- who universally declined to use their names for fear of losing all access to the family and their businesses -- point out that the Ghermezians are respected for their political acumen. Some charge that the family goes over the legal line, but no accusations have been proven in court.
Said one Edmonton reporter, "They're like Teflon. Nothing sticks."
The family is currently embroiled in a legal battle with the government-owned Alberta Treasury Branches, a public finance company, over refinancing of the family's West Edmonton Mall.
Since it opened in the late 1980s, the mall has been plagued with reports of financial problems.
Among the charges that have surfaced in the Canadian trial are allegations of bribery of public officials to receive the necessary zoning -- the land the mall sits on was residential prior to the Ghermezians' investment -- and get the public financial backing to build and hold on to the shopping center.
In October 1994, Alberta Treasury Branches increased its loans to the troubled mall by five fold, from 75 million to 440 million Canadian dollars. Allegations of improper dealings with a former executive of the finance agency form the core of a government lawsuit to gain control of the mall and of countersuits by the Ghermezians.
One charge leveled by attorneys for the provincial government of Alberta is that the family used rabbis to illegally shuttle money around the globe and into the bank account of the former Alberta Treasury Branches executive who granted the $440 million cash infusion.
Government attorneys charge that the former executive accepted bribes from the Ghermezians in return for approving the refinancing package.
In a Canadian national newspaper, the Globe and Mail, the family called the charges "misleading and reckless."
In countersuits by the family, the Ghermezians have charged that the Alberta Treasury Branches suit has hurt their ability to do business in the United States.
The suit is only the latest affecting the giant Canadian mall. The family has lost several civil suits involving various business deals at the mall, but according to Canadian newspapers, the Ghermezians have so far avoided paying the judgments in those cases, which total $2 million.
Like many of their other projects from London to Edmonton, the Peccole Ranch investment -- an early foray by the Ghermezians' into residential development in the Las Vegas Valley -- landed their representatives in court.
According to the Calgary Herald, the family made a pitch to develop the 1,700 acres owned by the late William Peccole.
Peccole agreed to work with the Ghermezians to develop 600 acres of what is now Peccole Ranch, but within a few years Peccole was suing the family while the Ghermezians charged Peccole with reneging on the deal.
Peccole accused the Ghermezians of racketeering, shoddy workmanship and misappropriation of funds.
The local developer -- himself long considered a shrewd political and financial operator -- reached an out-of-court settlement to end the legal battle in December 1995.
Despite the legal battles, the Ghermezians have allies worldwide. The death of the family patriarch in January brought many of those allies together in Edmonton.
One of those attending was Jim Edwards, president of Economic Development Edmonton, a nonprofit organization that seeks to promote business interests in the Alberta capital.
Edwards echoed other business leaders from Edmonton: The Ghermezians have been good to Edmonton and to Alberta, they insist. The criticism that they receive is because they are involved in very large business deals, which tend to attract critics.
"They have a remarkable business vision, particularly in the retail field, though they are no slouch as developers either," Edwards said.
"Of course, they're controversial," he said. "People who are mysterious are always controversial. But their mystery is that they are private people and very much family oriented."
Launce Rake covers growth issues for the Sun. He can be reached at (702) 259-4127 or by e-mail at [email protected].
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