THE NEW YORK TIMES MONDAY, APRIL 12, 1999 Las Vegas Journal: Casino Seeks Tax Break for Art's Sake By EVELYN NIEVES LAS VEGAS, Nev., April 10 -- Like braving the Batman ride at Six Flags Great Adventure or eating at the Hard Rock Cafe in its first heady months, visiting the Bellagio Gallery of Fine Art means enduring an almost stunning wait. The line to enter the gallery, the latest attraction in this vast casino, never seems to disappear. There is a line when the ticket booth opens at 9 a.m. and there is still one when it closes at midnight. High noon has to be the worst. On Friday at noon, the wait for tickets was 40 minutes, and that was to enter the gallery at 3:30. On Saturday, the wait at noon was nearly an hour, and that was to get in at 5:50. People were even waiting to wait. In front of the spectacular array of spring flowers in the hotel's conservatory, potential patrons milled about the gallery line, debating whether it would be better to wait then, or later, or another day. So it seems that the gamble by the Bellagio's owner, Steven Wynn, is paying off in spades: the same crowd that clamors for Siegfried and Roy is also attracted to a $300 million collection of Van Goghs, Picassos and Monets. This even though it costs more -- $12 -- to enter the two-room gallery than it does New York's Metropolitan Museum of Art or Museum of Modern Art or just about any other major art museum in the country. Still, Wynn is hedging his bets. He is lobbying the Nevada Legislature to pass a bill granting tax exemptions on the collection that would amount to a one-time sales-tax break of $18 million on the purchase of the art and $2.7 million each year in property taxes. This rankles State Sen. Joe Neal, a Democrat from North Las Vegas who is considered one of the most vocal critics of the casino industry. "There's a lot of people who think the casinos get too many breaks as it is," he said. "Why are we going to go and give Wynn another one?" But odds are that the bill, which may be voted on this week, will pass. While Nevada is cash-strapped, casinos are its number-one industry and Wynn, chairman of Mirage Resorts Inc., is the industry ace. This is the man, after all, who persuaded local lawmakers to approve a nine-acre lake in front of the Bellagio despite an ordinance banning new artificial lakes in water-starved Las Vegas. This tax battle is one that Wynn has fought before, to a frustrating end. Well before the October opening of the $1.5 billion Bellagio -- his effort give some snob appeal to the kitschy theme-park world of the casino strip -- Wynn lobbied for a bill that would exempt art collectors from property and sales tax on art worth more than $25,000 if they publicly displayed their art 20 hours a week for 35 weeks a year. The bill, which critics said Wynn practically wrote himself, was passed by the 1997 Legislature, but because it charges admission to its gallery, the Bellagio was denied the property tax exemptions by the state tax commission. Harvey Whittemore, a lobbyist for Mirage Resorts, said Wynn was not trying to wriggle out of paying taxes on the Bellagio collection. The collection, which includes works owned personally by Wynn (which he leases to the hotel) and others owned by his corporation, is classified as inventory because the works in it are for sale. As such, Whittemore said, it would already be exempt from sales tax. The interest in passing the law is altruism, Whittemore said: so that those who buy art will want to show it for the property tax breaks they will get. "You're trying to encourage the public display of art." In December Wynn sued the tax commission on the ground that it had never mentioned that public displays must be free. The lawsuit would become moot if the bill passes. The legislation says galleries that charge admission can still claim exemptions if they donate their profits to charity. Wynn offered to halve the gallery admission for residents of Nevada and to let schoolchildren in free during a 20-day per year art appreciation program if the bill passed. The bill passed the Senate Taxation Committee last week, 6 to 1, with only Neal voting against it. His competing bill, to repeal art tax exemptions, died a quick death. Sen. Mike McGinness, a Republican from Fallon who wrote the current bill, said that the Bellagio gallery would more than make up for the taxes lost by luring tourists to the state. "It's already a major attraction," he said. This cannot be denied. But Neal, who is getting a reputation for fencing with windmills -- he recently also proposed bills that would ban campaign contributions from the casino industry and raise the industry's taxes -- is not impressed. People in Nevada, he said, just hate laws tailor-made to benefit the casinos. "How many other people do you think can buy a piece of art for at least $25,000 and put it on public display?" Monday, April 12, 1999 Copyright 1999 The New York Times -30- Read about SB 521 Barbwire: Casino alchemist Wynn turns high art into low taxes More about Sen. Neal