Tuesday, Nov. 21, 2000 | 11:20 a.m.
Steve Wynn will be able to take over the Desert Inn homeowners' association and continue developing a new casino megaresort at the historic site on the Las Vegas Strip under a court ruling issued Monday.
The 12 Desert Inn Estates homeowners who spurned Wynn's offer to buy out their homes for his resort casino project did win an order in Monday's ruling to temporarily invalidate Wynn's newly elected homeowner association board.
But the homeowners failed to stop Wynn from developing the Desert Inn Golf Course for his new casino, which was the ultimate goal of a lawsuit filed Oct. 30 by Stephanie Swain, one of the 12 homeowners.
Swain sued Wynn, his wife Elaine and Desert Inn attorney Marc Rubenstein -- all of whom are members of what she called an "illegally constituted" board -- to stop them from taking over the association and redeveloping the neigborhood for Wynn's new resort.
Wynn, through his company, Valvino Lamore LLC, has acquired 41 lots at the Desert Inn Country Club Estates to make room for his project -- converting the Desert Inn hotel-casino and much of its country club golf course community into a giant casino resort.
Wynn filed a countersuit on Nov. 2 to stop the former board from disrupting the association's operations. Wynn also claimed Swain is fighting Valvino's development plans because it refused to pay her an exorbitant price for her residence.
Wynn attorney James Pisanelli said Swain was told in April that two appraisals would be obtained for each residential lot, and that a price 10 percent higher than the highest appraisal would be offered to each homeowner.
But negotiations broke down allegedly because Swain allegedly insisted her property was worth $8 million per acre, several times the appraised value. Pisanelli said the Desert Inn homeowners were each offered around $800,000 to $900,000 for their homes.
Swain denied the allegations. "That's incorrect. It's entirely misconstrued. I was told by one of the employees at the AM-PM Turtle Stop across the street on Paradise Road that (the AM-PM's) developers paid $8 million. I thought we should have our attorneys check into that since we're getting appraisals for our homes."
Nonetheless, the dissident homeowners, who insisted there were express restrictions on whether the golf course could be developed, won a right to "enjoy their homes as golf course 'country club' homes for as long as the golf course exists," Clark County District Judge Mark Denton said in Monday's order.
This means Valvino is prohibited from "building fences or other obstructions" that "deprive homeowners of benefits they have historically enjoyed." And fences that are erected around Valvino's houses to be demolished but that obstruct the homeowners' views will have to come down once they are no longer required, he said.
Swain won an order on Nov. 7 to stop Wynn from building an eight-foot chain-link fence. She said Wynn, who allegedly erected fences in the homeowners' backyards to protect pedestrians from debris, removed the fences on Nov. 16.
Denton also said the "activities on the golf course property cannot interfere with whatever easements and rights may exist relative to ingress and egress and use of and access to ... water, power, etc." by the homeowners.
He invalidated an Oct. 6 meeting at which the new board was elected, because it violated Nevada laws that say an election meeting requires at least 30 days notice and compliance with form requirements.
The new board notified D-I homeowners on Nov. 6 of a special membership meeting scheduled Dec. 7, when a new board of directors will likely be elected.
"It may very well be that a properly noticed meeting will result in installation of some or all of the new board members, but at this time, the former board and officers have not effectively been replaced by the new board and officers," Denton said.
While the homeowners are ordered to recognize Valvino's "voting interests and representative appointments" and cooperate with them in the scheduling and the conduct of meetings, Denton stressed the law requires Valvino and its representatives -- if they are elected board members on Dec. 7 -- to "put the interests of the association ahead of their own."
Denton said the homeowners association is still designed to "provide for the general welfare of its members," even though the interests of the remaining homeowners and those of the operators of the golf course have now become "divergent."
Denton noted the homeowners' desire to retain the Desert Inn golf course -- which he said "has come to be known as one of the finest in the world" and is an "eternal landmark." He acknowledged the golf course is "under private ownership, and under our system of laws, property owners, subject to reasonable restraints and regulation, are permitted to do what they please with their property."
"It is a historical fact that the history of the Las Vegas Valley is one of growth and change, and Las Vegas has continually re-invented itself. This might disappoint some, but there is no law that everybody must share the same feelings about what should be maintained," he said.
Denton granted Valvino's request to stop the former board from removing and misusing association funds and from assessing fines and "liening Valvino Lamore's and its affiliates' properties and seeking to enforce any liens that have already been processed."
Valvino alleged the former board withdrew more than $24,000 from the association's bank account and allegedly threatened to assess $4,100 in fines for unspecified violations.
Pisanelli said: "We're not forcing homeowners to leave but Valvino wants the same rights to develop the property. Valvino has spent $270 million acquiring the golf course and an additional $50 million to acquire the residential lots. We paid those homeowners for their voting rights."
"If the homeowners reject our offer, we could build around their property. It'll be like the situation with Villa De Flores apartment complex, which is located in the middle of the back parking lot between Mirage and Treasure Island."
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