As downtown changes, the Attic prepares to shut down

The Attic was an Arts District staple before an Arts District existed in downtown Las Vegas.

Owner Mayra Politis can see the new City Hall gleaming a few blocks down from her Main Street vintage shop, which opened in 1992 when downtown teemed with mechanics and bail bondsmen, not artists.

Now, the downtown landscape is filling with art galleries, restaurants, bars and government buildings, Zappos is preparing to move into the former City Hall building and The Attic is closing its doors.

"All of this growth I should be experiencing right now along with the city and the Arts District, I haven't been able to," Politis said.

The steady march to The Attic's Feb. 29 expected closing date began July 11, 2010. It was a Sunday morning, Politis' one day off, and the store at 1018 S. Main St. was closed. Politis was sleeping when the NV Energy substation next door to The Attic exploded, causing $1.1 million in damage to the vintage-clothing store .

For the last year and half, Politis has been waiting. Waiting to find out what caused the explosion, who is responsible, how she can pay for her damaged building. She moved across Main Street to a 3,000-square-foot shop, losing 7,000 square feet of space for her inventory. For a vintage store, the less space, the less opportunity for buyers to find one-of-a-kind pieces.

"The only way you can make money in this type of business is to have enough inventory or a lot of inventory so you can offer those choices," Politis said.

The recession had hit The Attic hard, like most other businesses, but Politis was toughing it out. She reduced her staff from 20 to seven. Now she has two employees. Soon she will have none.

OUT OF MONEY

After waging an 18-month public relations war against NV Energy, which included a five-day hunger strike last month and anti-NV Energy comic strip plastered across her old storefront, Politis has run out of money. She is having a half-off, cash-only liquidation sale during the last week of February before closing the doors .

"I need to step back just a couple months, take a breather and really see the big picture," Politis said. "My ultimate goal is to rebuild and reopen The Attic."

Politis will spend March packing up and moving out of her rented space. She owns a warehouse on Main Street and Washington Avenue where she plans to store inventory and possibly turn part of the facility into a version of The Attic.

She is, however, continuing with the lawsuit she filed in December against NV Energy and Southwest Gas Corp. after a mediation meeting among the parties solved nothing.

NV Energy's investigators and a third-party investigator determined that the utility was not at fault for the explosion, citing a gas leak as the cause. Southwest Gas is still investigating the case, but determined that an excavator hit a gas pipe, causing the leak.

"We are looking into the cause of the explosion and we do not know the identity of the excavator. The investigation is ongoing," Southwest Gas spokeswoman Cynthia Messina told the Las Vegas Review-Journal.

NV Energy spokeswoman Jennifer Schuricht said in an emailed statement that Politis "has received a substantial payout from her insurance company addressing her damaged building and lost business revenue" and that Politis' insurance company "did not assert claims against NV Energy."

NV Energy gave Politis nearly $15,000 to cover two months of rent and mortgage payments. Politis pays $3,700 a month for her damaged, unused building, and $3,500 for her current space. Messina said Southwest Gas also provided Politis with financial assistance, though she could not say how much. But Politis said she has never spoken to or received money from Southwest Gas.

A PAINFUL LESSON

Politis said her $640,000 insurance policy does not even come close to covering the $1.1 million repair bill. Her insurance company sent some $400,000 to her mortgage lender to pay down the balance of her note; the rest is being held to repair the building when Politis has the money to move forward. Her mortgage is nearly paid off, Politis said, but her building is uninhabitable.

Many insurance policies mandate paying mortgage companies before paying for damages, said Robert Aalberts, professor of legal studies in the University of Nevada, Las Vegas' Lee School of Business. If there's a lesson to be learned from The Attic's misfortune, it's to buy more insurance, he said.

"Get better insurance or get higher coverage ... because you never know what's going to happen," Aalberts said.

Small businesses who take on corporations usually lose, he said, because giant companies have the money to drag out litigation.

"Civil litigation all comes down to economics," he said. "They have more money than you do."

Contact reporter Caitlin McGarry at cmcgarry@reviewjournal.com or 702-387-5273.