Las Vegas Review-Journal (Sunday)
Agency again eyes Moulin Rouge land
Investment firm’s deal may be sealed Nov. 9, though
The Southern Nevada Regional Housing Authority stepped forward as an unlikely candidate last year to buy the site of the old Moulin Rouge hotel, intending to construct a tavern-style casino and, as a public agency with no experience in gaming, find a partner to manage it.
But the state’s largest public housing authority abandoned its plans in October 2019, when Executive Director Chad Williams said that purchasing the land that once held the first racially integrated casino in Las Vegas was no longer in the agency’s best interest.
Now a potential deal is back on the table: The authority’s board on Oct. 15 approved purchasing the 15-acre plot downtown for $3.9 million, much less than a 2019 appraisal of $6.5 million.
“If you think about it, this is the best opportunity for we, the people, to even have a voice for what goes on on that site,” said John Johnson, the executive director of a social services nonprofit, Empowerment Through Training and Education, who is handling community outreach and marketing for the proposed acquisition.
Project faces competition
Still, the proposed deal is not preferred over an offer made by an Australia-based private investment firm that could be finalized Nov. 9, according to Kevin Hanchett, the court-appointed receiver for the property.
The firm, BBC Capital, is proposing $3.1 million for just three of the four parcels that comprise the site, with an option to buy the fourth. Its offer includes taking on nearly $2 million plus interest in liens that stem from demolition and other
work directed by the city of Las Vegas, and it proposes to close the deal more quickly than the authority.
Hanchett said Thursday that the authority’s proposal is problematic for two key reasons: The seller will be expected to assume more than $2.8 million in hard costs and the 180-day window to close a deal is too long.
Investors are unlikely to recover any money if the seller assumes the hard costs in the deal, according to Hanchett. Since an effort to redevelop the site failed in 2004, approximately 300 investors represented by the receivership have been waiting to be repaid.
“At the end of the day, it’s up to the judge,” Williams said. “Our position is we’re offering to purchase it obviously in the best interest of the community.”
Hopes of revitalization
Over the years, seemingly promising bids to purchase the site have foundered, mostly due to financial hiccups from would-be buyers. Clark County opted not to buy the site three years ago after community criticisms over its plans. The property, on Bonanza Road and east of Martin Luther King Jr. Boulevard, is now mostly a vacant plot and a razed remnant of the casino’s heyday in 1955.
It was not clear what exactly BBC Capital’s plans for the land would be, and an email sent to a firm representative was not immediately returned. One of the parcels it proposes to acquire is attached to an active non-restricted gaming license.
According to Williams, the housing authority’s plan is that the four-parcel site will house three main components: a small casino and museum that pays homage to the rich history of the Moulin Rouge; the authority’s relocated headquarters; and new affordable housing properties. The agency owns the Marble Manor public housing development adjacent to the Moulin Rouge property.
The reasoning: Williams sees it as an outside-the-box approach to drawing in revenue for the housing authority while reducing both the agency’s reliance on federal dollars and its roughly $150 million maintenance deficit.
City, housing authority talks
In the past year, two critical changes renewed the housing authority’s pursuit of the land: The price potentially dropped and the agency engaged the city as a collaborator.
Williams said that the price tag a year ago would have been close to $8 million, including civil fines and other costs attached to the property in connection to city abatement efforts. Now the authority is prepared to pay half that price, in part due to the possibility that the city might waive nearly $2 million in fines, described as soft costs.
During the Oct. 15 board meeting, the agency board approved a memorandum of understanding with the city. It gives both sides 90 days to agree on a site development plan and to work out terms and conditions for the city to forgive the fines.
The City Council is expected to consider the memorandum on Wednesday. It is not a party in the purchase and sale agreement, however, which would involve only the housing authority and the property’s court-appointed guardian.
Unprecedented, but low risk
If the housing authority is successful in acquiring the site, the land will actually be owned by its nonprofit arm, Affordable Housing Program Inc.
But Williams said even using nearly $4 million in reserves for a real estate deal tied to a casino project would not at all affect the authority’s ability to continue to develop affordable housing.
The only risk to the authority, he added, is a $39,000 earnest money deposit, which is refundable.
Town hall scheduled in November
A town hall meeting on the proposed project is scheduled for 1 p.m. Nov. 14 — five days after the expected court hearing on the site’s future — in housing authority commission chambers, 340 N. 11th St. in Las Vegas. Seating is limited due to the pandemic, and the session will be carried live via Webex at SNVRHATownHall.info.
To RSVP or for more information about how to watch online, call 702-723-2955 or email Info@EmpowermentNow.com.