Struggling Comstock to close in downtown Reno

Tuesday, Nov. 14, 2000 | 10:23 a.m.

But the Reno Gazette-Journal said a Miami investment group has agreed to purchase the 308-room property for $6 million and plans to turn it into an apartment building and condominium complex.

"We're going full-speed ahead in starting our renovations," said Joel Gamel of Miami, whose group specializes in apartment and condominium conversions. He expects to spend $600,000 to convert the Comstock into about 200 studio and one-bedroom condominiums that could go on the market as early as spring with an average selling price of about $50,000.

Gamel, who hopes to capitalize on nearby redevelopment along the Truckee River and proposed revitalization in the city's casino core, said uses for the casino space could include retail stores or a supermarket.

"It is on a main street and it does attract a lot of attention, so it could be suitable for any number of purposes," he said.

Gamel said the hotel might remain open during the interim period.

John Douglass, chief executive officer at the Comstock, said he and his operating partners in the Comstock's limited partnership could not afford to keep operating the casino. He said it was not feasible to invest in making the business competitive, since their management contract expires in 18 months.

"Our business has been falling off for the last three or four years," Douglass said, estimating that the Comstock has lost about $600,000 to $700,000 a year over that period.

"You can't keep going that direction."

Douglass said the Comstock could close in less than 60 days if winter business conditions deteriorate.

The partnership sold the Comstock's real estate for $5 million to an affiliate of the Los Angeles-based Hertz Group in May 1999. Under the deal, the partners were to manage the property while Hertz sought a Nevada gaming license.

The partners have rented the Comstock from Hertz for $50,000 a month and kept the gambling and hotel revenues but could not afford to buy the equipment and capital improvements necessary to compete knowing that they would eventually have to leave the business, Douglass said.

Hertz, meanwhile, apparently has decided to give up on getting a Nevada license.