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Benjamin Spillman

Mayor calls Lady Luck casino 'carcass'

6 July 2009

LAS VEGAS, Nevada –- More than three years after it closed -- and two years after it was originally supposed to reopen -- the Lady Luck is still a dark, empty shell in downtown Las Vegas.

And city officials and nearby business owners are eager for changes. They're urging Hollywood, Calif.-based CIM Group to pick up trash and debris around the site, tear down a skeletal structure adjacent to the main buildings and possibly relinquish control of a nearby parking garage that has fallen into disrepair.

CIM has until late December to start a $100 million renovation of the Lady Luck or the company could lose out on the city's offer to hand over land around the proposed nearby Mob Museum.

"As far as I'm concerned, they've done nothing," Las Vegas Mayor Oscar Goodman said recently. "There will be a time of reckoning."

Goodman and other city officials say they appreciate that the recession threatens CIM's once-ambitious time line for the project and they won't penalize the company for economy-related delays.

But they're also exasperated by the continued presence of a concrete-and-steel skeleton that looms over Fourth Street at Stewart Avenue across from City Hall and the recently renovated Gold Spike.

They'd like CIM to remove the structure and pledge to do a better job keeping sidewalks and landscaping clean along Ogden and Stewart avenues and Fourth Street, the streets along vacant, unused portions of the Lady Luck site.

Goodman turned up the rhetoric over the issue during a recent City Council meeting.

"The Lady Luck is a disaster," he said.

He then called the skeletal structure a "carcass."

Goodman told city staff to check out the property for code violations, meaning the owners could face fines, civil penalties and a lien on the property if violations aren't fixed.

Third Street, which goes through the middle of the site, still has several active businesses and remains tidy.

"Certainly, we want to see some general sprucing up of the exterior of the building," said Scott Adams, chief urban redevelopment officer for the city.

CIM would not agree to an interview. The company sent only the following statement: "CIM Group is still working through the process on the Lady Luck. Market conditions obviously have changed and we're continuing to advance our plans in this new economic climate. CIM Group and its neighbors around the Lady Luck have been in discussions regarding a joint effort to address the aesthetic of the general area. There are no changes in our business arrangements with the city on any of the properties. When there is new information we will provide an update."

The best-maintained portion of the property is along Third Street, where two bars, a restaurant and a pawn shop generate foot traffic. The street is closed to vehicles but serves as a valet-parking area and special-events gathering spot for the businesses.

A pedestrian bridge crosses over Third Street between the two mostly empty Lady Luck towers. Some time-share owners still occupy the west tower off Stewart Avenue.

East of Third Street is the casino, which has a stripped-down façade facing Ogden Avenue, the four-story skeletal structure with a broken satellite dish hanging on the roof and a large graded area.

The graded area is fenced, but also strewn with beer bottles and assorted trash, especially at the fence line along Fourth Street.

There, behind ripped screens meant to block sight lines, trash, old clothes, and landscaping debris pile up in the lot.

On the public's side of the fence, the landscaping is untamed and empty booze bottles litter the ground.

"I think it is very important to make sure the neighborhood is cleaned up and safe for people," said Stephen Siegel, owner of the Gold Spike, across Fourth Street from Lady Luck.

Goodman said he's discussed the possibility of having Siegel, who has spent more than $20 million acquiring and refurbishing the Gold Spike, clean and operate the Lady Luck parking garage on the southwest corner of Fourth and Ogden.

CIM leases the garage from the city for about $550,000 annually, Adams said. CIM has a long-term lease and would need to agree to any arrangement for Siegel to participate, he said.

Siegel said he's willing to clean up and refurbish the garage with a decorative, well-lit façade.

Although there are hundreds of spaces in the garage, only about a dozen or so were in use on a recent weekday. Spaces on the third floor and above are blocked off.

"Even if it was free, people are not going to park there," Siegel said of the current condition of the garage, which has a pay kiosk and sometimes charges for parking.

The 743-room Lady Luck closed in February 2006. Then-owner Andrew Donner told the Nevada Gaming Control Board in November 2006 that the property could be reopened as early as 2007.

In 2007, CIM acquired the property. On July 2 last year, the City Council approved a development agreement with the company.

The agreement called for a mixed-use project that would incorporate the hotel-casino along with land around the Mob Museum.

CIM's access to the city-owned land is contingent on beginning renovation on the hotel by the end of December, or extending the agreement with the city, Adams said.

Adams said CIM has committed plenty of time and money to the project, including assisting the formation of a tourism improvement district, to demonstrate that they are still actively pursuing the renovation.

And as long as the company keeps committing resources to the project, city officials are inclined to give the developers extra time to find financing.

"There is no real large-scale real estate financing market right now in America," Adams said. "What we are all trying to do is hunker down and wait for recovery. When that happens we are all going to expect some performance."