Ellis Island, Tuscany in deal

Monday, April 12, 2004 | 10:39 a.m.

The Ellis Island Casino & Brewery in Las Vegas has agreed to invest in its around-the-corner neighbor, the Tuscany Suites and Casino Resort, and plans to take over management of the Tuscany's casino after getting an OK from Nevada gaming regulators, Ellis Island's lawyer said Friday.

Responding to a Las Vegas Sun query to Ellis Island owner Gary Ellis about the deal, lawyer Frank Ellis III, Gary's brother, issued a statement acknowledging that a transfer has been agreed to, subject to regulatory approval.

"Ellis Island Casino & Brewery has entered into an exclusive letter of intent with the Tuscany Casino," the statement noted. "The agreement is subject to the approval of all regulatory agencies, including the Nevada Gaming Control Board. Upon approval Ellis Island will have joint ownership in the business and real property, and will manage the casino."

Ellis Island executives declined to say when they expect the casino change of control to take place, to estimate the cost of the transaction or comment on whether it would affect operations at Ellis Island.

Ellis Island President Karen Dorsey said that lawyer Ellis' statement was all the property was willing to disclose.

Industry observers have long noted the lack of casino customers, particularly midweek, at the Tuscany.

The East Flamingo Road casino opened in January 2003, but never was able to attract the customers it courted: Strip workers, other locals and convention visitors.

One of the big reasons has been competition from Ellis Island and other nearby properties with established local customer bases, Las Vegas Advisor publisher Anthony Curtis said.

Ellis Island captures Strip workers on their way to and from work at its Koval Lane spot just south of Flamingo Road, offering better food specials and cheaper drinks than properties owned by Station Casinos, Coast Casinos and others, Curtis said.

The Tuscany hasn't been able to steal much of that market.

Ellis Island is well-known for its popular, every-night-of-the-week karaoke lounge, for offering free drinks to casino workers and for its steak specials -- under $4 on Thursdays, under $5 the rest of the week.

Curtis' Advisor regularly lists the Ellis Island steak special among the top values in the city.

Ellis' planned investment in the property requires approval from Nevada gaming regulators.

The Control Board would have to vote to recommend Ellis' purchase of an ownership share and operation of the casino, which would then need final approval from the Nevada Gaming Commission.

Tuscany General Manager Tom Guth said Friday that property co-owner Charles Heers was in San Diego and wasn't available to comment. He said Heers would be in Las Vegas this week and would issue a statement.

"The story's premature," said Guth, who replaced former GM Bruce Fraser, who opened the Tuscany's casino early last year after the property opened its 716 suites in December 2001.

Heers and Arizona-based contractor Bob Yost own the Tuscany, which has a 60,000-square-foot casino, about 660 slots and a 14-table game pit.

Heers bought the property from the Howard Hughes estate in 1988, but struggled to line up financing for a proposed Caribbean casino resort, leaving only a big wooden ship-shaped sign advertising the never-built property.

Instead, he and builder Yost developed and built the Tuscany.

Yost said this morning that the owners expected the property's first year to be slow.

"We anticipated that it would take a year to build up the business," Yost said. "But we've been doing better than expected since the first of the year."

Ellis Island was opened in 1967 as the Village Pub by Frank Ellis Jr., father of current Ellis Island owner Gary Ellis, who also owns the Las Vegas-area chain of Village Pubs, and of Frank Ellis III, the lawyer said.

The family changed the name to Ellis Island about 18 years ago.