Station purchases another Reno site for development

By Liz Benston (contact)

Friday, July 1, 2005 | 11:15 a.m.

Station Casinos Inc. has struck a third deal to buy land in Reno, taking a gamble that the market is ripe for locals casinos of the type the company has built across Las Vegas.

The company has entered into an agreement to lease, with an option to purchase, eight acres of gaming-entitled land across from the Reno-Sparks Convention Center. The company expects to develop a boutique hotel and casino with entertainment venues and restaurants.

The agreement marks the third parcel of land Station has obtained in Reno for development. In May the company bought 50 acres south of Reno near U.S. Highway 395 and Mt. Rose Parkway, which is near 96 acres of land the company picked up for $15 million in March at the intersection of Geiger Grade Road and South Virginia Street. The company declined to reveal the purchase price for the other two deals.

Station Casinos Executive Vice President and Chief Development Officer Scott Nielson said the company has more recently been impressed with Reno's population growth and favorable demographics, particularly in the suburbs.

"Obviously the downtown Reno market has been impacted by gaming in Northern California," Nielson said. "There is a good regional local market up there that we think our product will do well appealing to."

"I think Northern California is a very deep market and I think we can build a Green Valley Ranch-type project" in Reno, he said.

Station expects to begin developing the 50-acre parcel first and has begun the process of obtaining casino entitlements for the land, a process that will likely take until the end of the year, Nielson said. Construction on a casino could take place as soon as next year, he said.

That casino would be part of a 110-acre mixed-use site under development called Summit Sierra.

The casino projects aren't likely to have any effect on business at Thunder Valley Casino in Northern California and vice versa, he said. Thunder Valley, managed by Station Casinos, has become one of the most profitable tribal casinos in California in part because of its proximity to the San Francisco Bay Area and other population centers.

The eight acre site "presents some challenges" because it is small "but we think we can develop a nice boutique casino there," Nielson said. The location is close to downtown but appealed to Station because of its proximity to the convention center, he said.