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Arnold M. Knightly

Mandalay Bay nightclub under scrutiny

16 December 2009

LAS VEGAS, Nevada -- The owners of the embattled Privé nightclub at Planet Hollywood Resort will ask a judge today to enforce a lease agreement for a new nightclub in Mandalay Bay's retail center, Mandalay Place.

Owners of The Rose Cocktail Lounge claim in a lawsuit filed Dec. 3 in Clark County district court that Mandalay Place has refused to confirm to the county's Business License Department that the center has a lease agreement to let the nightclub open next month.

Mandalay Place said in court filings that it declined to confirm the lease because the club's original managers are no longer involved with the nightclub.

The Rose's owners claim in its lawsuits that it is willing to submit new names, but Mandalay Place wants to rework the terms of lease.

Mandalay Bay wants to change the five-year lease agreement to a month-to-month lease and take out language that would allow the club's owners to recover part of its investment if the lease is terminated early, according to the lawsuit.

Clark County spokesman Dan Kulin said a business can't obtain a business license for a space without a proof of a lease or ownership.

The Rose is owned by Vegas South Partners, a limited liability corporation owned by new Privé principals Roman Jones and Mitchell Rubinson.

Jones said Tuesday he still hopes to reach an "amicable solution" that will allow the Rose to open for the holidays. In the lawsuit, the club owners claim to have raised $1 million to build the club, hired staff and entertainers and hired a public relations firm to promote a holiday season opening.

Mandalay Place, however, said in a court filing that the Rose's owners owe $200,000 in rent and that the lawsuit fails to disclose "the real reason why Vegas South" has not obtained a license.

"What Vegas South does not want this court to know is that these are the same individuals who were involved in the Privé nightclub at Planet Hollywood which, as public records reveal, lost its liquor license because of their involvement," the Dec. 4 filing said.

The original lease signed March 19 listed then Privé co-managers Greg Jarmolowich, Frank Tucker and Justin Levin, as full-time operators and managers of the Rose.

All three were removed, however, from Privé's operations in August when the county pulled the club's liquor license after a series of violations and what the county viewed as poor oversight by the club's management.

Jones and Rubinson are seeking licensing by the county for Privé and its sister ultralounge, The Living Room. Those nightclubs are open under a 90-day liquor license set to expire in January while the Metropolitan Police Department continues background checks on Jones, Rubinson and the management team.

Privé filed for Chapter 11 bankruptcy in Miami last month.