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Planet Hollywood

Third time a charm for Prive?

Postponement of Privé appeal heralds a third attempt for the club to right itself. The Weekly makes some predictions about the outcome

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The party doesn’t live here anymore: Prive’s liquor license denial means the club is closing its doors for now.

What can be accomplished in two weeks that cannot be accomplished in one?

That was the question on deck immediately after it was announced on August 4 that Privé’s appeal of the July 23 denial of a permanent liquor license would be postponed until August 18. In a statement issued that morning, Clark County Director of Communication Erik Pappa said, "The owners of Privé and Living Room, along with their legal counsel, requested early this morning a hold of numbers 75 and 76 on this morning's County Commission agenda for two weeks due to new developments, which include continuing reorganization."

This will be the third attempt at reorganization since the Privé scandal broke.

The first go at it was on July 27, when Privé’s attorney Jay H. Brown submitted a letter stating Privé’s intention to appeal the decision, which was accompanied by a four-page document outlining changes the club had already made and further intended to make to comply with regulations, as well as a request for a temporary license to carry the club through until the appeal could be heard on August 4. At a meeting on July 28, Director of Business License Jacqueline Holloway denied both the temporary license and the corrective action plan, and removed club directors Greg Jarmolowich and Frank Tucker as key employees. “I believe we need a corrective action plan that includes a new management team and comprehensive management oversight that addresses all of our concerns,” she said.

Call it strike one.

Prive nightclub

Planet Hollywood’s attorney Frank Schreck spelled out the second attempt—complete with a new management team—at a July 29 meeting. Schreck proposed that his client absorb both Privé and the Living Room lounge’s bars into its own liquor license and, in effect, “lease” Privé’s staff from Privé Vegas LLC. His written proposal, dated July 30, arrived with a signed check to cover the $2,225 fees for filing the bars under Planet Hollywood. That same day, this proposal was turned down as “not sufficient,” with Holloway again emphasizing her need to see a staffing plan, new key employees and a proposal that would ensure “the proper level of protection for the public health, welfare and safety of guests.”

The check was returned. Strike two.

Following the postponement for Privé to mount its next attempt, Pappa elaborated on his earlier statement. While the Department of Business License did not go into Tuesday’s meeting having received any details on what this third attempt at reorganization might entail, he did say that Privé’s owners are continuing to work with the county's Department of Business License and Metro “to enhance Privé’s corrective action plan.”

Ball one.

So, what will it take to get Privé’s doors reopened? And what might be transpiring during this two-week span that will be revealed when Privé reps are given the floor on August 18?

August 18, 2009 - Decision Day

Come August 18 (or sooner, if a special meeting is called), Holloway will present a case before the County Commission which, acting in its capacity as the county Liquor and Gaming Board, will decide whether to give Privé a liquor license of any sort, temporary, permanent or none. Representatives for Privé will also have the opportunity to state a third plan for reorganization. As two such proposals have already been denied, there is some implied pressure on the seven-member commission to seriously consider the third. One might also speculate that there is considerable pressure on Privé‘s rep (probably attorney Jay Brown) to make this one stick.

Based on what is known up to this point, and on what is rumored to be in the pipeline, that meeting could go down something like this:

Through Brown, Privé Vegas LLC will address the complaints by showing the commission progress, compliance and a new corrective action plan.

There are a few such plans being spoken of within Privé’s closest circles. In one of the most plausible, a current Opium Group operator, Orlando Oquendo (formerly of Light Group), would be brought back to Vegas to run Privé. Oquendo has spent the last year running Opium Group’s Mansion Nightclub in Miami, but was just recently in Las Vegas, he says, for a vacation. Oquendo will not confirm whether or not he took any meetings while he was here but did say he could “very possibly” be returning soon.

Another name reportedly being tossed around is Jim Reding, Director of Retail at Cosmopolitan Resort & Casino as well as a developer who was at one point planning to open The Hive, a live music club and bar at the corner of Las Vegas Boulevard and Fremont East. The stalled project still bears signs that read “Coming soon.”

As attorney Brown did in proposal one, Privé might restate its new security plans. They might restate that former security director Ron Lyons is gone; former US Marshall David Hicks, Lyons’ former second in command is said to be Lyons replacement as director. They might recount how Holloway removed Jarmolowich and Tucker as key employees and further show that both have been since let go by Privé Vegas, LLC. They may even go so far as to voluntarily remove the third part of the management trinity, perhaps by announcing that Privé Vegas managing partner Justin Levine has offered to step back as an operator; rumor has it he already has.

At this point in the proceedings, they might then move forward with the proposal of Oquendo and Reding (and possibly Hicks) as Privé’s next key employee and rest their case with the assertion that all that was wrong has been righted.

If Oquendo and Reding are indeed the men for the job, and if Privé/Living Room are granted a liquor license on August 18, Pappa says Privé will have to turn in any applications for new key employee(s) by 5 p.m. on the date of the appeal or meeting. A key employee "application" consists of a letter of appointment by the employer that an individual will be the key employee and a completed personal history questionnaire, which is Metro's form to complete for background checks.

To wit, the department of business license confirms that a managing partner need not necessarily live in the state and not necessarily be a key employee, and that he or she may appoint managers as key employees to run the venue.

Again, this is just one possibility.

Other rumored corrective action plans hinge on a denial of the appeal. A denial is tantamount to a death sentence for Privé as we know it; with no business comes no money to pay bills and Privé likely has a great deal of those. Planet Hollywood just laid out $500,000 for Privé’s lack of oversight, so it’s reasonable to assume that the casino wishes to recoup its costs. And, one would imagine, so would the club’s investors.

Were Privé to also owe money elsewhere, such as to general contractors, any ensuing lien could have disastrous consequences to the host casino’s financial structure as any associated banks, federal agencies or hedge funds might then begin seizing funds.

If Privé proves unable to secure a liquor license on August 18, that alone might be enough for the casino to step in, evict their tenant and either run it themselves or get a new tenant. The club also could fall into the investors’ hands to run. Or, now that former employees such as former security director Ron Lyons—cited in two violations—are coming forward with stories alleging briefcases of cash leaving the property, any number of government agencies might step in with corrective action plans of their own.

Some fine print

In the moment after Privé presents its appeal, the commission will either see the holes in this third plan or approve it as is.

First, there is no longer an “Opium Group,” per se, not as a single business entity, anyway. There is, however, a massive tangle of LLCs, investors and partners collectively referred to as The Opium Group. As with Pure Management Group, each nightclub basically has its own LLC, if not a few, which function as payroll and management companies. There was historically an Opium Group, LLC in Florida, but the name was changed to Opium Vegas just prior to Privé nightclub’s one-year anniversary.

In addition to Privé Vegas and Opium Vegas LLCs, there are also Opium Vegas Partners (Levine, Jones); Opium International (Privé Vegas, LLC, Living Room Vegas, LLC); and Levine’s own JL Club Holdings.

Beyond that there is Roach Holdings, which Jones manages with Jaime Mitchell, daughter of Opium Group investor and group advisor Mitchell Rubinson; Opium Music, which Jones shares with nightlife magnate brothers Francis and Eric Milon; Opium Bruiser (Jones); and at least 13 other entities that list as managers one or more of the principal players: Jones, Levine, Mitchell Rubinson, Jaime Rubinson, Eric Milon, Francis Milon and some minor players.

With names such as Opium and Roach, one wonders if there ever was a theme.

In nearly every case, the LLCs’ registered agent is Alan W. Levine of Miami’s Levine law firm, who is understood to be of no relation to Justin Levine.

So when a rep for the group stated on Tuesday, August 4, that "Greg Jarmolowich and Frank Tucker are no longer employed by Privé Nightclub," and later added, nor Opium Group, there could be some room for creative interpretations. Jarmolowich and Tucker may have indeed been terminated by Privé Vegas, LLC (or whichever of the many entities employed them; Opium Group reps will not confirm), but that does not mean that one (or both) is not continuing his employment with the group via other channels.

Indeed, just days after the postponement of the Privé appeal, managing partner Justin Levine was allegedly overheard saying that he and Greg Jarmolowich were planning to leave for Miami to oversee the purchase, renovation, reopening and possible renaming of Cameo nightclub (neé Crobar, neé Cameo once before that) for the Opium Group family.

(A source close to the company’s principals confirmed that Levine is in Miami; Jarmolowich has been confirmed in attendance at Opium Group meetings on Tuesday, August 11, which included Oquendo and Roman Jones. Jarmolowich was allegedly seen working the door at Opium Group's Louis Bar on Tuesday as well.)

At Cameo, the source continues, Jarmolowich would bear the title of director of operations as well as initially replace Oquendo at Mansion, with Levine once again in the role of managing partner. No mention was made of Frank Tucker in that discussion, though the source now speculates that he might not be far behind. The Cameo nightclub website currently lists no future events, just the message “Thank you Miami. See you in September.” Levine furthermore allegedly outlined in this discussion his plans to spend two weeks in Miami minding the new shop and make a routine of commuting to Vegas for two weeks of running Privé from behind the scenes.

If this is true—and especially if Levine does take a step back in work at Privé; rumor has it he already has—that will probably not be the plan attorney Jay Brown will lay before the commission on August 18.

But is this all a smokescreen?

Interestingly enough, the sole membership of J. Levine Investments, LLC was transferred from Justin Levine on August 5, 2009, to Opium Group don Roman Jones. The entity was also then renamed Privé Vegas Investors, LLC. What was owned or operated by that LLC is not yet known.

At Cameo, Jarmolowich (and perhaps later Tucker) would likely be hired through one of Opium Group’s existing LLCs or—as it’s clearly not difficult to do—a new one will be formed.

Just this July 7, Roman Jones and senior Opium Group advisor and investor Mitchell Rubinson reinstated their dissolved Cameo Theater, LLC, which they have owned since 1998, and on July 24, 2009 created Cameo Management, LLC, as well as Cameo Holdings, LLC on July 29. It seems the two have some intentions toward Cameo, thought what those intentions may be we will simply have to wait and see.

Though the project is said to be long dead, Risqué Nightclub at Paris Las Vegas appears to have at one point been coveted by Opium Group, too. Since April 4, 2008, a Paris Vegas, LLC as well as a Paris Partners LV, LLC has been registered in Florida to Roman Jones, Mitchell Rubinson and Justin Levine. Inquiries made to Harrah’s representatives have yet to be returned.

Prognostications aside

There is no telling at this point how the Privé affair will actually play out, whether investors will step up or managers step down. But play out it will, and barring any further postponements, on or by August 18 we will see nightlife law written. The outcome and details of the Privé affair will set precedence for future such cases.

As the Weekly demonstrated in the August 6 cover feature “What Now?,” the nightlife and casino world has already begun to change in the wake of the case thus far. Dramatic changes and the future of such lucrative nightclub/casino relations hang in the balance.

UPDATE: A representative from Opium Group has since responded to the Weekly's request for comment saying, "Greg Jarmolowich is not employed by The Opium Group or any of its venues. He visited Louis Bar Lounge as a patron during his vacation, as well as several other non-Opium Group venues," and in regards to rumors of the intended purchase of Cameo nightclub by Opium Group, "Opium Group has not confirmed purchase of Cameo, and any rumors regarding this are purely speculation."

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