LV casino developer sued over real estate commissions

Grace Leong

Wednesday, Dec. 13, 2000 | 10:50 a.m.

Colliers International has sued to recover $709,280 in real estate commissions it claims to be owed from two companies belonging to Luke Brugnara, a San Francisco real estate magnate and owner of the closed Silver City Casino on the Las Vegas Strip.

In a Clark County District Court lawsuit, Colliers, which said it introduced Walgreen Drug Stores as a tenant to the defendants, Brugnara Corp. and Brugnara Properties V LLC, alleged the companies reneged on an agreement to pay Colliers after Walgreen entered into a multi-year retail lease on Nov. 19, 1999, for a 16,000-square-foot store at the Silver City site.

Walgreen, which has more than 30 stores in the Las Vegas Valley, opened the store at the Silver City property at 3025 Las Vegas Blvd. South on Nov. 29, said Robert Worth, the store manager.

Brugnara, who has said he paid "between $30 million and $40 million" to acquire Silver City from United Casino Holdings LLC and an adjoining shopping center called the Las Vegas Shopping Plaza, announced plans last year to construct a San Francisco-themed hotel-casino on the 8-acre property near the intersection of Convention Center Drive and Las Vegas Boulevard.

The Silver City purchase marks Brugnara's entry into the Las Vegas market. Brugnara's companies own more than 1 million square feet of commercial space in San Francisco, primarily in the city's downtown core.

Brugnara, who has indicated the new casino will be built "up and around" the Walgreen store, has said he intends to spend "millions" to upgrade Silver City and to have several leases with "upscale businesses" and "four-star companies." He has said he hopes to develop the property into a full-fledged hotel-casino by 2002.

Mandalay Resort Group closed Silver City on Oct 31, 1999. The company, formerly known as Circus Circus Enterprises Inc., leased the property 20 years ago from United Casino and opened the Silver City in 1981.

Brugnara has said the property had to close because he couldn't get a Nevada gaming license in time to prevent Silver City's closure.

Randall Sayre, the Nevada Gaming Control Board's investigations division chief, said Brugnara, who filed an application for a gaming license for Silver City in August 1999, is still undergoing a pre-licensing investigation.

"Silver City will be opened as a casino if Brugnara is successful in getting a gaming license," Sayre said. "As the investigation gets closer to completion, then we'll look at his casino business plans."

The defendants could not be reached for comment on the lawsuit.