Las Vegas - The Horseshoe Hotel and Casino in downtown Las Vegas has fallen behind in its ground lease rent and its yearly payment to the Fremont Street Experience Limited Liability Corporation according to reliable sources.
One of the landlords who owns the property under the casino told the Las Vegas Tribune that he has not received his rent payments from casino owner Becky Binion-Behnen for over a year. The amount owing is reportedly in excess of one million dollars. It is also reported that other Horseshoe landlords have not received their year 2000 rent payments indicating that the casino may be experiencing cash flow problems.
Other problems have also plagued the casino in recent years.
After a bitter legal battle, Becky Behnen gained control of the casino from her estranged brothers Jack and Ted Binion in 1998. The feuding siblings are the children of Horseshoe Club founder Benny Binion. Ted Binion permanently lost his gaming license in 1997 for narcotics violations.
Ted Binion died under questionable circumstances in 1998, shortly after witnesses reported that Binion ordered Nick Behnen and nephew Benny Binion Behnen off his Palomino Lane property at gunpoint. A drive-by shooting at Ted Binion's home occurred one week later. Police reports indicate Ted Binion accused his nephew Benny of being the shooter.
Just prior to Ted Binion's death it was rumored that the brothers were planning to repossess the casino from their sister and brother-in-law. If that were to occur, Ted Binion would need to have his gaming license reinstated in order to manage the casino.
On the day before his death, Ted Binion donated $50,000 to then gubernatorial candidate Jan Jones. It was speculated that Jones promised to reinstate Ted Binion's revoked gaming license in the event she was elected Governor.
In addition to the talk of unpaid rents, the Las Vegas Tribune has learned that Becky Behnen has reportedly stopped paying the one-million dollar per year association fee required of all casinos that are members of the Limited Liability Corporation that controls the Fremont Street Experience (FSE LLC). It is not yet known what effect the reported stoppage of fee payments by the casino has had on the operation of the FSE.
Since the construction of the FSE in 1993, downtown Las Vegas' gross gaming revenues have failed to keep pace with the Consumer Price Index or with other gaming areas in the state. One major downtown property, Fitzgerald's, has gone into Chapter Eleven-bankruptcy protection. Fitzgerald's' has since been sold to Don Barden of Detroit.
Prior to the construction of the canopy and the street's closure, Fremont Street casinos reported steady, but small increases in yearly gross gaming revenues in excess of the CPI. The canopy was the brainchild of former Mayor Jan Jones and former Golden Nugget owner Steve Wynn.
This was the second Fremont Street concept floated by Wynn. The first involved closing Fremont Street and digging canals that would be filled with water and gondolas featuring crooning gondoliers. The concept was nicknamed "Las Venice," and gained little support.
During City Council hearings leading up to the approval of the $75 million FSE LLC project, proponents promised that a contingency fund would be set up to protect the taxpayer's interests in the event the project failed and the canopy needed to be dismantled and the street reopened to traffic.
In the early 1990s, members of the public protested when they learned that the proposed project would not be put on a ballot for a public vote. They also objected to the transfer of ownership of four blocks of Fremont Street to private interests without a public vote.
Kenneth Wynn, brother of Steve Wynn, was put in charge of the FSE LLC construction project at the behest of former Mayor Jones and his brother. The City Council failed to put the project out to public bid as is always required.
Kenneth Wynn's gaming license at Mirage Resorts was suspended for a narcotics violation just prior to Jones appointing him as the project manager. When asked, Jones defended her decision and downplayed Wynn's narcotics problems and gaming license suspension. Wynn's gaming license was reinstated shortly following the completion of the FSE.
Though he does not hold a Nevada General Contractor's License, Kenneth Wynn was nonetheless allowed by the City Council to supervise the construction and appoint sub contractors.
After the FSE opened, Steve Wynn closed the main showroom at the Golden Nugget fueling speculation that he was disappointed with the results of the casino-mall project. He later sold the Golden Nugget to MGM Grand. In 1999, after she left office, Jones began promoting competitive-to-Las Vegas casinos in California for Harrah's Entertainment.
Bolstering speculation that Becky Behnen was in financial trouble, in 1998, the Horseshoe began refusing to cash its $5,000 chips. After several complaints the Nevada Gaming Control Board stepped in and ordered the casino to cash the chips. The casino complied with the state order on the day before a scheduled hearing to examine the reason for their refusal.
The Horseshoe casino also dismantled its famous Million-Dollar Display shortly after Becky Behnen and her husband took over causing further questions about the club's financial viability. The often-photographed glass booth in the hotel lobby that contained the million dollars in cash was a major tourist attraction.
The privately owned Fremont Street Experience receives $1 million tax dollars per year from the Las Vegas Convention and Visitors Authority. The fund was initially intended for parks. The FSE was designated as a public park by the City Council under Jones' stewardship so it could receive the funds though it is on private property. It is not yet known whether the FSE LLC partners will request additional tax funding to make up for their recently reported deficits.
Calls to Mark Paris, Executive Director of the FSE LLC were not returned. His assistant would nor confirm nor deny the stoppage of payment of association fees by the Horseshoe.
© Copyright Las Vegas Tribune, Inc.
Steve Miller is a former Las Vegas City Councilman and
writes a weekly column in the Las Vegas Tribune.