August 2, 2012 - 12:14 pm
The financier behind redevelopment of Wayne Newton’s Casa de Shenandoah estate as a “Graceland West” to honor the Las Vegas entertainer surprised many on Thursday by asking a judge’s approval to kill the project.
Charles McCrea, the attorney representing CSD LLC, which owns the property and has been converting it into a tourist attraction based on Newton’s life and career, opened the third day of a hearing on disputes surrounding the project by asking Clark County District Judge Elizabeth Gonzalez to validate the dissolution of the company.
She set the matter for an Aug. 28 hearing.
McCrea said Texas investors Lacy and Dorothy Harber, who own 70 percent of CSD and who have so far put about $50 million into the project, no longer want to proceed. In particular, McCrea said, the Harbers recoiled at testimony by the entertainer’s wife, Kathleen, who said there was no cap on the Harbers’ obligation to put money into the troubled project.
“The Harbers never agreed to this and never imagined they would be in this position,” McCrea said. “It is not possible for them to deal with the Newtons in any business setting whatsoever.”
“I’ve had enough,” Lacy Harber said during a break. He added that he has no post-dissolution plan for the property.
The initial plan was to give tours of the estate, including animal exhibits, a large garage with Newton’s classic and exotic cars, the main house and a museum for show business memorabilia to be built across the street.
Harber, who has built or owned companies in banking, oil, aviation and marinas, now splits his time between Las Vegas and his longtime home of Denison, Texas. One letter from a senior vice president of American Bank of Texas, introduced into the case, certified his net worth as exceeding $300 million. Elsewhere he’s been called a billionaire.
While the Newtons anticipated a dissolution attempt, they did not expect it this soon or without written notice. They expect to challenge the move as out of compliance with CSD’s corporate bylaws.
Dissolution, Kathleen Newton said at the end of two days on the witness stand, “would be very unfair to us. We have worked very hard and spent a lot of time and effort to make this (attraction) what it should be.”
The Newtons, who own 20 percent of CSD, would have to leave their current home within a year. They would receive $2 million to buy a house somewhere else or build a new one on the southwest corner of Casa de Shenandoah’s 41 acres, according to the terms announced by McCrea. In addition, they would have two months to remove all their animals, including birds, a herd of Arabian horses, lemurs and rescue pets, from the property at the southwest corner of East Sunset and South Pecos roads.
Kathleen Newton’s testimony covered the history of the project, taking so long that CSD had no time for cross-examination. That phase of the case is scheduled to resume in September.
She recounted in detail how the two-year business relationship deteriorated, with her and her husband opposing the Harbers and Steve Kennedy, the project manager who owns 10 percent of CSD.
The Newtons sent a 17-point letter to Harber on Oct. 26, 2011, detailing specific complaints about the project’s direction and Kennedy’s management, including disagreements about proposed ticket prices, a lawsuit against a neighbor and the design of animal enclosures.
One point of contention was Kennedy’s acquisition of a red Ferrari for the car collection. Wayne Newton objected, citing his a well-publicized recurring dream that he would die in a red sports car.
Kathleen Newton said she and her husband wanted to go ahead with the project, but CSD launched the lawsuit in May, claiming the Newtons had refused to leave their mansion to make way for conversion and had failed to produce an inventory of memorabilia to be put on display.
Contact reporter Tim O’Reiley at toreiley@review
journal.com or 702-387-5290.