Casino operator Jacobs Entertainment agreed to purchase the Sands Regency Casino Hotel, two blocks of Fourth Street and the rest of the Gold Dust West Casino in downtown Reno.
Part of the purchases include $1 million of Reno Housing Authority land and an additional donation of $1.5 million worth of houses all over the city to the housing authority.
Jacobs Entertainment is a Colorado-based casino gaming company that has operated Gold Dust West Casino for more than 10 years and invested more than $50 million into the property over that time. It recently bought the last of that casino from the Piazzo family.
Jacobs Entertainment's two-part plan for west downtown includes long-term plans for transforming Fourth Street into an urban neighborhood while separately taking over the Sands operation.
The initial property purchases total about $10 million, according to Washoe County records, and $30 million for the purchase of the Sands, Jacobs Entertainment CEO Jeffrey Jacobs said. Future development costs were not disclosed.
Increasing affordable housing in Reno
The housing donation and purchase is a separate investment into Reno's affordable housing inventory since the Reno Housing Authority owned land in the area Jacobs wanted.
"We are excited about the plans of Jacobs Entertainment to create a vibrant new arts-oriented district along Fourth Street,” Mayor Hillary Schieve said in a news release. Schieve is on the housing authority board. “At the same time, the transaction provides a significant boost to the work of the Reno Housing Authority and its mission of providing decent and affordable housing to the community.”
The two blocks of Fourth Street that Jacobs Entertainment bought between Washington Street and Arlington Avenue include houses, two motels, empty land, a pawn shop and a wedding chapel.
The dilapidated Stained Glassed Pub, which the RGJ previously called the most blighted building in the city, was demolished and its land sold to Jacobs Entertainment at a profit.
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Two existing apartment complexes between Washington and Ralston streets, one owned by the Reno Housing Authority, are not part of the land acquisitions.
“I’m a strong believer that the motel slumlords shouldn’t be a provider for affordable housing," Jacobs said.
Reno's motels supply low-income weekly or monthly housing for more than 3,000 people, according to city of Reno's survey of the homeless and under housed. The city considers motel residents at high risk for homelessness. Many of the motels have also increased their rents, charging from $400 to $750 a month for people living below the poverty line, according to RGJ analysis.
"I think the federal government should be the housing provider of last resort," Jacobs added.
Instead, he said a public-private partnership and the local housing authority can make a bigger difference.
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The Reno Housing Authority will work with Jacobs to purchase $1.5 million worth of affordable housing units throughout the city. They will immediately take over the deeds to any houses or units Jacobs buys, said housing authority Executive Director Amy Jones.
The separate land sale, which was bought above market rate, also gives them another $1 million to use for updating current affordable housing, building new units or buying additional housing for low-income and homeless residents.
“From the authority's perspective, we looked into developing that lot and we wouldn’t have been able to get that many units into the lot because of parking restrictions and other requirements," Jones said. "So it’s a win-win for us. We can get the funds from that sale and put more units in another location instead of keeping this vacant land that isn’t doing anything for us.”
Jones said the housing authority is excited to see what Jacobs does to West Fourth Street.
New plans for West Fourth Street
Jacobs said most of the residents and business owners they bought property from wanted another two years before vacating. For now he's going to consider paving over the empty land on Fourth Street to make festival space. He talked about turning the area into green park space with large fountains in the short-term.
All of the businesses and houses will change over starting closer to 2019, he said.
“It’s a long-term commitment," he said. "My 11-year-old might finish this project.”
Many of the houses were purchased at or above market value, according to comments from the Washoe County Assessor's Office. Two weekly motels, the Donner Inn and Carriage Inn, were part of the deal. Both sold for about $2 million each.
Jacobs' team will start researching plans for a 125-unit market-rate housing tower somewhere on the two blocks. This would double the current housing capacity on these blocks, but at a higher price. Jacobs still needs to hire land-use planners and architects before starting.
“I don’t see massive buildings coming out of the ground right away,” Jacobs said. "For the housing piece, when you look at Arlington (Avenue), it feels like this should become an urban neighborhood."
In the 1990s, Jacobs helped revive the Cleveland, Ohio Cuyahoga riverfront with mixed-use housing and retail after a recession in the 1980s, according to Avenues magazine archives. He developed a vacant power plant into lofts housing and entertainment.
Sands Regency acquisition
Jacobs Entertainment also entered into an agreement to buy the Sands for $30 million once the Nevada Gaming Commission approves the purchase, Jacobs said. He said he thinks the commission will approve it in June or July.
In the last two decades, Jacobs owned shares in the Riviera Hotel and Casino in Las Vegas, before it was purchased and imploded by the Las Vegas Convention and Visitor Authority this year.
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He also invested in the Boardwalk Casino and Hotel, before it was imploded and turned into the Las Vegas at CityCenter.
Jacobs said he sees the gaming industry staying flat instead of declining, so now is a good time to invest in Reno. He would be following in the footsteps of Marnell Gaming's purchase of the Nugget, Eldorado Resort's purchase and investment in Circus Circus and Station Casino's announcement to build near the Reno-Sparks Convention Center.
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"We’ll come out in about 12 months with more plans for the Sands Regency,” Jacobs said. “Buying one of these is like turning around a battleship. It’s going to take a couple years to turn it around.”
He wants to focus on cleaning up the property, for example, by putting an end to events like the summer pool parties.
The Sands Regency Casino Hotel is one of Northern Nevada’s longest continuously operating casino properties with 833 rooms, a 30,000 square-foot casino and five restaurants.
“This will allow the storied history of the Sands Regency to continue to grow and for our wonderful patrons to be able to continue their strong relationship with our property and its dedicated employees,” Ferenc Szony, CEO of Trucking Gaming, LLC the operator of the Sands, said in a news release.
Jacobs bristled at the idea of taking ideas from Las Vegas to improve the Sands and downtown Reno. He wants to attract people from the surrounding cities and compete with California's gaming industry using a more local approach.
“You need some new Reno ideas," he said. "Hopefully when we hire our land planners, we can build off of the strengths and assets of Reno.”
Headline correction April 26 at 8:30 p.m.: An earlier version of the story's headline miscalculated the most recent property investment made in downtown Reno. Though the total investment over the last 10 years is closer to $90 million.
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