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The Neverending Story

Like a blockbuster franchise, the tale of Neonopolis just keeps going on and on…

John Katsilometes

The movies at Galaxy Theatres at Neonopolis come and go. But the one lasting feature presentation is the madcap Rohit Joshi Story.

Sunday, July 1, 2007 at 11am  Photo by: Iris Dumuk

 

The Maharishi of Downtown development occupies the second floor of the largely moribund theater complex just off the eastern cusp of the Fremont Street Experience. Amid 6-foot-high cardboard cutouts of such summer blockbusters as Transformers and Shrek 3 is a colorful character who, despite his diminutive frame, is this production’s biggest star.

Joshi is the front man for the development team that owns Neonopolis (or Fremont Square, a temporary title whose slapstick history would also work well on the big screen). The Bombay-born wheeler-dealer entertains visitors in a conference room at the entrance of his Vegas headquarters. Displayed around the room like movie posters is a series of stunning renderings, created over the past year, of what Neonopolis, which today is home only to the theaters, Jillian’s and Del Prado Jewelers, might have been.

Sunday, July 1, 2007 at 2pm  Photo by: Iris Dumuk

There’s the festival-themed entertainment project whose centerpiece is a Ferris wheel (the structural issues and financing were deemed insurmountable).

There’s the residential towers project (the developer never could get proper financing for that one).

There’s the ship-shaped oceanic project encompassing shops and restaurants and a Disney-like theme (the major tenant interested in anchoring the project tanked, so to speak).

Sunday, July 1, 2007 at 5pm  Photo by: Iris Dumuk

There’s the full-fledged hotel-casino development (problematic because the Neonopolis parcel is not zoned for gaming, which would require approval from the state Legislature, which Joshi was unable to pursue because he ran out of time).

And there’s the Times Square-modeled complex with a scaled-down Broadway theater district (the concept fizzled as the Smith Center for the Performing Arts at the nearby Union Park project was announced).

Joshi wheels around, happily describing the various concepts, renderings and (some experts claim) abject pipe dreams. “All of these projects came and went, three, four months at a time. The city has asked, ‘What is he up to?’ I am still gathering marbles here. I am not ready to play yet. I have no plan of action. This is what a developer does.” As Joshi rattles off the reasons for Neonopolis’ struggles and his often far-flung and vague plans of action, it is clear that for all of Mayor Oscar Goodman’s caterwauling and prodding for him to sell Neonopolis to a more aggressive developer, Joshi is in Vegas for an extended engagement. This flick seems like a franchise, primed for several sequels.

Sunday, July 1, 2007  Photo by: Iris Dumuk

“You don’t invest the kind of money we did to stay for a short time,” he says.

Curiously, placed in front of Joshi on the glass-topped table is a little leather-lined box full of eyeglasses, a half-dozen pairs packed in a tight cluster. But Joshi himself is not wearing glasses.

“Those are for reading,” he says, nodding toward the box. Moments later his cell phone rings. He pulls it close to his eyes, squinting at the number, ignoring all those glasses.

He answers, “This is Joshi.”

Yes, this is Joshi. Such a character.

Neonoplis' Rohit Joshi with his dream renderings  Photo by: Iris Dumuk 

FROM HERE TO ETERNITY

A bit of plot synopsis is required to understand how Rohit Joshi came to embody the mired mall project on the northwest corner of Fremont Street and Las Vegas Boulevard. The checkered history of the 300,000-square-foot center actually precedes Joshi’s involvement by nearly a decade and straddles the terms of two Las Vegas mayors. The project, originally the vision of Jan Jones, was made public in 1997. At the time the concept was to build a complex that would remind visitors of the CocoWalk entertainment-shopping center in Miami’s Coconut Grove region, but “Vegas-ized” with vintage neon signs placed in the open promenade. Another comparison was the pedestrian-friendly Horton Plaza in downtown San Diego.

But trouble began percolating soon after Neonopolis was announced; the city had to shoo businesses out by filing eminent domain lawsuits against owners refusing to move to make way for the project. In 1999, Mann Theaters—the planned anchor tenant—filed for bankruptcy. Crown Theatres later stepped in, only to eventually be replaced by Galaxy. Because of construction delays, the opening of Neonopolis was repeatedly pushed back, from November 2000 to May 2003. At the opening party, which featured the requisite fanfare, martinis and showgirls, Goodman told the Las Vegas Sun that Neonopolis would “dwarf” Horton Plaza and that “... all of Southern California is going to come down here to check out this place.” But, in a statement that would be repeated in spirit over the next five years, he said of the project, “It wasn’t a love affair, folks.”

Soon after opening, Neonopolis’ original tenants—such businesses as La Salsa restaurant, Frederick’s of Hollywood and the Saloon bar and restaurant—began peeling off. Those who tried to move in were often turned back for curious reasons; Ohio nightclub owner Donald Troxel attempted to bring an alternative-themed club into the project and was thwarted, he says, because developer Prudential Real Estate Holdings had a problem with a business targeting a primarily gay clientele.

As Neonopolis continued to sag, Prudential became increasingly eager to sell and had the project on the market for about two years. It finally found a buyer, in 2006, in a group of investors (most of them reportedly multimillionaires based in India) who make up the development company Wirrulla Hayward, whose front man is Joshi. Prudential had invested approximately $160 million in the project; Wirrulla purchased it for $25 million. Aside from presiding over the launch and departure of Poker Dome, the Fox Sports Network poker series that for a year filmed from the third floor of Neonopolis, Joshi has mostly reviewed proposals for renovating Neonopolis. He regularly appears before the City Council to be beaten up by Goodman, who has dismissively described his plans as “gobbledygook” and has made it clear he wants someone to buy Neonopolis out from under Wirrulla, or at least be rid of Joshi.

The mayor smiles and shakes his head when asked about the real-estate magnate.

“What do I think of Joshi? I think he’s a cad. I think he’s a scoundrel,” Goodman says. “And I love him. ... Joshi is what he is.”

This mayor might take time to joke about Neonopolis’ plight, but his predecessor is serious when defending her role in the project.

HIGH NOON

Today, former Las Vegas mayor Jones is an executive for Harrah’s. Her office is at the top of the Palace Tower at Caesars Palace, through a pair of glass doors and down a hallway no wider than the width of a couple of bowling lanes and longer than three football fields. One of the photos on her office walls is an election-night shot, showing the new mayor behind a podium at the Golden Nugget, flashing her winning smile.

But Jones is still frequently linked to the faltering Neonopolis project—a failure, in retrospect. Goodman often says he inherited the problematic mall, reminding his constituents that the project he frequently calls “an albatross” was not his idea.

Meaning, of course, that it was Jones’. And she is tired of that.

“It’s ridiculous,” she says. “The whole focus of Downtown redevelopment was to stabilize the core, which was Fremont Street. Bring in retail, centralize the government offices, then build out the rest of Fremont Street. Hopefully then—hopefully—you go out to the area beyond, to Union Park. But you have to have an anchor at the end of Fremont Street.”

Jones reminds people that in her tenure as mayor, the chief city project was the underground garage at Fremont Street and Las Vegas Boulevard that is leased by Neonopolis. The city initially purchased the site of Neonopolis and sold the rights to the property, and in return the city receives a share of the complex’s profits through 2024. But Jones emphasized that neither she nor the City Council during her two-term tenure ever determined what should be placed on the land atop the garage.

“Looking back, maybe we just would have built the parking garage,” Jones says. “But it’s not like we gave a lot of incentives to build Neonopolis. We had land. We could have left it vacant, but we built a garage at the end of Fremont Street to draw people. Was that a bad idea? No. They made a decision to come down to Fremont Street, and that turned out not to be a good decision.”

Jones contends that problems with Neonopolis are less about the closed-off design of the facility—something Joshi has long complained about—and more about personal safety. “Frankly, dismantling all the homeless programs so that the minute you walk out of the Fremont Street Experience you feel vulnerable, is really not conducive to generating long-term successful retail business.” She suggests that extending the Fremont Street Experience canopy to Las Vegas Boulevard might make the area safer; the problem is, such a project would likely cost around $25 million.

Jones most recently walked through Neonopolis about seven months ago.

“That’s when I really noticed that when you walk out of the enclosed mall area, it’s like a war zone,” she says. “... It really hit me. All of a sudden, you stop, and you’re in a scary space.”

When discussing Goodman, Jones’ voice dips to something of an impression of the mayor. “I was laughing when the mayor said [voice drops], ‘You gotta bring supermarkets into urban areas.’ We did that. We brought Vons to the west side [that store has since gone out of business]. I could ask the mayor, ‘What have you done to clean up Downtown, to make it safe so people want to go Downtown?’ The panhandlers, the criminal element down there, that is a problem. What else has prevented people from watching a movie down there? It’s much easier than going to a movie in a casino.”

She continues, “The mayor has been a great spokesman for the city, but what would you have done differently, mayor? Would you have not built the parking garage? Would you have not told retailers, ‘Don’t come down here.’?”

Goodman declines to engage Jones in a specific give-and-take about Neonopolis, saying, “I think she’s a great mayor and a lovely lady.” But he does defend the security at the eastern end of Fremont Street. “Twenty million people come down here [annually], and Metro tells me it’s the safest part of the city. There is a homeless corridor four or five blocks from there, but they seem to be a harmless lot in terms of causing people trouble.” And he reiterates, “I’m not blaming anybody, but I inherited the problem area here. The solutions are not easy solutions.”

If Goodman had it his way, he’d level Neonopolis and build a high-rise resort on that parcel. “It’s a very valuable piece of land, and I would build a sky-rise, an iconic building, high in the sky, like the Arc de Triumph.” Jones disagrees. “A hotel is never going to work there. No way. Downtown can barely keep the hotels they have afloat.”

The man in charge of the project offers his opinion. As Joshi says, “I doubt the city would want to take down Neonopolis and have a hole there for three years.”

And amid the difference of opinion of two Las Vegas mayors, Joshi remains the most important figure in Neonopolis’ future.

REBEL WITH A CAUSE

Rohit Joshi slips in and out of the third-person reference often favored by superstar athletes. “Nobody is betters suited than Joshi to deal with this saga,” he says, “because I knew every little detail of this—every word of every document. I know and understand.” What he understands most is that Neonopolis came at a bargain. It is a 2.3-acre parcel with a three-story, 300,000-square-foot building and 227 leasable spaces in that building. Wirrulla paid $25 million in cash and is spending up to $5 million a year in upkeep and interest to keep the project alive.

“How can you find that for the price we paid? It’s impossible, anywhere in the world,” he says. Goodman has tried to entice developers to purchase Neonopolis, most recently in May at the International Council of Shopping Centers convention.

“All I can tell you is, there is no angel out there with zillions of dollars saying, ‘My life is not complete without Neonopolis,’” Joshi says, smiling. “That is my feeling, but you know, in this city, miracles always happen.”

What would the selling price be? The number that would grant Goodman’s wishes and remove Joshi and his investors? Joshi muses a bit, rolling that thought through his head.

There is a number. But he’s not saying what that number is.

“Of course there is a number,” he says. “I say, ‘Offer me a price.’ But I’m not here just to get rid of Neonopolis.” He’s asked if that number would be, say, $40 million? Joshi laughs. “I don’t know the figure. I think that many people have interest in Neonopolis, but that doesn’t mean they are ready to buy it. There are those who kick the tires, the lookie-loos who say, ‘Maybe I can get this for a song.’ But right now I am working on a solution to my problem.”

Goodman offers his assessment of how much it would take to wrest Neonopolis free. “You’d have to get about $30 million, but as soon as I start talking about $30 million there’s a rumor that he wants $60 million,” he says. “But this changes daily. [Wirrulla] is not in a hurry. They have deep pockets. Joshi is no dummy. He’s a lot of things, but he’s no dummy.”

What Joshi says he is looking for, the solution to his problem, is a short list of what he describes as “internationally recognized, branded tenants.” The tenants would specialize in one or more of three categories: retail, dining and entertainment. He says he has made agreements with such tenants but is not yet prepared to announce specifics (such as who they might be) and won’t be able to for months. But he says they will be the type of tenants—and he does say a major hotel-casino or department store are in his plans—with the financial muscle to withstand short-term losses to make a long-term project work.

“The tenants have to be operators of multiple stores and financially so well-capitalized they can stay in business even if they don’t make it right away,” he says. “They should have thousands of stores, so if one doesn’t make it, they won’t close it down. Don’t bring in every business owned by a Tom, Dick or Harry, or someone who says, ‘I just borrowed $200,000 to create a business,’ and expect them to be a long-term tenant.” Joshi’s unwillingness to sign businesses to what he deems risky long-term leases is one of the chief reasons Neonopolis sits almost empty; critics counter that any reputable business is going to want a lease of longer than, say, a year to measure Wirrulla’s commitment to the project.

The other significant problem with the project is that the design of the Neonopolis building is largely closed off to Fremont Street. Joshi says that once his major tenants are committed, such problems can be “resolved,” which means we might see the rubble of renovation on that corner after all.

THE SOUND OF MUSIC

Joshi is an energetic 60 years old. He says he has a “very short and interesting story.” He was born in Bombay and has lived in the U.S. since age 18, when he emigrated to attend the University of Akron in Ohio. He majored in business and also learned to play most musical instruments (he favors the sitar). He merged those passions and built a small empire of music stores in Ohio. The company grew to 160 across the country. He shifted his energy into land development and began investing in shopping malls across the country. He moved to Chicago, Los Angeles and, a little more than 10 years ago, to Las Vegas.

He says he has developed a “very thick skin” in his business career, which in the past several months has been heavily scrutinized by local journalists and the city of Las Vegas itself. The Las Vegas Sun reported in January that there are more than $750,000 in judgments against him from previous failed development projects (including a deal in Florida that saw a rep for former Major Leaguer Darren Daulton show up at Neonopolis seeking $160,000 allegedly owed to the onetime Phillies catcher). Joshi counters that he has not paid or settled because he is attempting to have the rulings overturned. Failed dealings have been detailed in published reports, including a movie studio in Pahrump that never panned out and an attempt to build a campus for Touro University at Cashman Center (Touro wound up setting up in Henderson).

Also, Joshi’s past business relationship with Hong Kong billionaire Stanley Ho was questioned by the City Council when documents dating to 1999 suggested Joshi was pursuing deals in the U.S. on behalf of Ho’s Shun Tak Holdings without the permission of Ho or the company. Joshi, who claims to be living off his personal savings until Neonopolis becomes a money-maker, has denied wrongdoing in every instance. And from the city’s perspective, no allegations against the Wirrulla front man have extended beyond investigations.

Goodman grudgingly accepts that he might have to deal with Joshi for the foreseeable future. “But I hope not. I told his lady friend I hoped he would sell it so I could get him out of here, but he meets his obligations to the city. If he stops doing that I will go in there and kick them out. But he has not done that.”

The lady friend, Loraine Kusuhara, is the owner—or “silent owner,” as Joshi says—of Jillian’s. That spot, and Del Prado Jewelers, have been given quite a bit of leeway to remain in operation. Jillian’s has been given a temporary 90-day liquor license to remain in business even as Dharmesh Bhanabhai, a partner in both the restaurant and Wirrulla Hayward, refused without explanation to submit to a background check, which is usually mandatory for any business partner seeking a liquor license. But the City Council granted the license anyway, as Goodman reasoned it is far more favorable to the city to have Jillian’s in operation than not.

As for Del Prado, Joshi is cutting a break rather than receiving one. The longtime family-owned jewelry store moved into Neonopolis in September. Business has been stagnant, but the loyal Del Prado customers know where to find the store, even on the second floor of Neonopolis. Owner John Del Prado says he makes enough to pay his bills. And Joshi is allowing him to operate rent-free. “It’s a good thing to do, and it’s a hard-working family,” Joshi says. “He has been the only tenant that has his own following. No other tenant is bringing that foot traffic. He has a good core business.” Joshi does not see that arrangement as losing money. Having purchased Neonopolis at a good deal, it is all part of the investment.

“It’s not going to fill up any time soon,” Joshi says. “You have to have a certain amount of locals who know we are still doing business here.”

ROCKY

Perhaps no episode better underscores the fragmented relationship between Joshi and the City Council than the attempt to change the name of Neonopolis to Fremont Square. It should have been a seamless maneuver. Instead it was a mess, with none of the people involved in the decision quite able or willing to explain how the name was determined.

During a City Council meeting in May, Joshi and PR rep Bill Marion announced that Neonopolis would be called Fremont Square. The explanation was that the name would reflect the mall’s link to the burgeoning Fremont East entertainment district (where such clubs as Beauty Bar, the Griffin and Downtown Cocktail Room are drawing locals to the region) and the hotels under the Fremont Street Experience to the west. Makes sense—except that when Goodman heard the name he braced.

“I hate the name,” he says. “If I ever call that Fremont Square, it will be with somebody else owning it.” But Joshi says the name was formed by a consensus of city planners, himself and Marion. “In the defense of everyone, the name Neonopolis has carried a lot of baggage. People can’t say the word very easily. They say, ‘The flop of Neonopolis,’ and it has also outlived its usefulness. Neon is no longer a prevalent part of the plan. So we asked the city for some suggestions nine, 10 months ago, and we selected, together, Fremont Square.”

Says Goodman, “That [name] comes from his own vivid imagination, and that of Bill Marion. It came from the city? It was never represented that way. I think the name stinks. If that’s the best he’s got, I’m going down the street.”

But the name is a mere placeholder for something bigger for the staggering project. “I’m not much into names, I’m more into tenants. The mayor is totally right. The project makes the name. We have to go beyond that, get a name sponsor — something that will go with Fremont Square.”

And Joshi cannot resist another tantalizing promise.

“I have a very, very good brand name coming, one that once it comes on, people will be scratching their heads and wondering why it wasn’t called this originally. I’ve got it in my hip pocket.” Joshi then gestures to a briefcase sitting, closed and locked, in a chair at the end of the table. “In this briefcase lie my answers. But I am not ready to give them out.”

In the briefcase, Joshi’s script awaits a final read. It’ll be a blockbuster, for sure. Trust him on that.

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