Las Vegas Sun

March 29, 2024

Mayor questions focus of center

Las Vegas Mayor Oscar Goodman says he is concerned about the apparent shift in objectives of the downtown Neonopolis development from entertainment to a provider of office space.

However, the general manager of the 227,000-square-foot facility that features two restaurants, a 14-screen theater, retail shops and a family-oriented night spot says that while 5 percent of the project's space has been leased as office use to one company, the focus is still entertainment, food and retail.

At his weekly news conference Thursday, Goodman said he was exploring the whether the city could take action against Neonopolis if it is changing its "objective and goal" from entertainment to office rentals.

Goodman said he is concerned because the $99 million non-gaming project adjacent to the Fremont Street Experience was pitched to the city as an entertainment attraction that would bring thousands of tourists to the downtown area.

Also, Goodman noted, the city has "$23 million in taxpayer liability" sunk into the project, which has been touted as the cornerstone in the city's redevelopment efforts. Goodman later corrected himself to say the figure was $32 million.

The city invested $40.5 million in the project, including $23 million for the land at the corner of Fremont Street and Las Vegas Boulevard and $15 million for construction of an underground parking garage. However, the city received $8 million back from the developer for land rights to Neonopolis.

"If the city's money was not in it, they could do what they please," Goodman said.

The city expects it will take 20 years to recoup taxpayers' investment via revenue from the 600-space parking garage and property taxes.

"If the city's money was not in it, they could do what they please," Goodman said.

Neonopolis currently features the 40,000-square-foot Jillian's family-oriented nightclub that opened in October, the 71,000-square-foot Crown theater complex that opened in May 2002, two restaurants -- The Saloon and La Salsa Cantina -- and several retail shops.

Frank Wheat, general manager of the property for World Entertainment Centers, the company that runs Neonopolis, said the project's direction is the same as it always has been. But with just 68 percent of the complex leased out, it's better to have some rent money coming in than vacancies.

"I could see there being concern if we shut down Jillian's and was renting it out for office space, but that's not what's happening," Wheat said.

"This whole thing doesn't make any sense. There must be a miscommunication or misunderstanding. Our goal is still having an entertainment-food-retail center."

Wheat said the controversy arose over Neonopolis recently leasing 11,000 square feet of space to Resort Gaming Corp., for its corporate offices on the third floor of the complex. The company, which owns Timbers restaurants, has set up its human resources center at Neonopolis.

Wheat says Resort Gaming employs 35 people at the site -- all of whom have to use the city's parking garage and pay to do so.

Also, he said, there is a flow of waitresses, bartenders and others coming to Resort Gaming to apply for work as well as vendors and potential future proprietors, all of whom pay to use the city's parking garage.

"Yes we would have liked to have been stronger with occupancy by this time, but if someone comes to us tomorrow and wants to rent 1,000 square feet for office space, we wouldn't talk to him," Wheat said. "But we would consider one more company renting another 11,000 square feet" for office space.

Wheat said that would tie up less than 10 percent of the property, indicating that is not enough to support a theory that the project is changing direction.

Wheat said Resort Gaming was given a three-year lease, which means the site in the not-too-distant future could be rented to another company -- perhaps an entertainment, food or retail business.

Wheat said it is not uncommon for entertainment projects to have mixed use with offices.

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