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The Gold Spike casino and hotel, seen from Fourth and Ogden streets, in downtown Las Vegas.
Tuesday, Aug. 18, 2009 | 2 a.m.
The Gold Spike
Sun Archives
- Mob museum contractor at odds with city (8-8-09)
- The transformation of downtown's Gold Spike (2-13-2009)
- Worn but hanging in there (2-11-2008)
- Lady's luck is changing (6-22-2007)
- Own your own casino (6-17-2007)
Sun Coverage
In some of Las Vegas’ grittiest dive bars, stale cigarette smoke hangs in the air, fixtures are coated with ’70s-era grime and the clientele often includes sex and drug peddlers.
The Gold Spike used to be something close — a dive casino.
“Before we bought the place, people were scared to come down here,” said Michael Crandall, business affairs director for the Siegel Group, which purchased the property early last year.
In an impressive display in such a down economy, the ambitious Siegel Group is finishing top-to-bottom renovations at the Gold Spike and the adjacent Travel Inn. The casino’s rebirth, while welcomed by Las Vegas officials, is also serving as a reminder of how difficult the recession has made their task of redeveloping the area.
The section of downtown that includes the Gold Spike remains in disrepair — in no small part because of the larger, empty casino across the street. The owners of the Lady Luck, which shut its doors in 2006, haven’t so much as put shovel to ground despite numerous city incentives to rebuild.
In July of last year, CIM Group in Los Angeles, which owns the Lady Luck, signed a draft development agreement with the city. The agreement was for a mixed-use project, which included not just the renovations of the Lady Luck, but also a $291 million retail center and possibly a gaming hotel to be built on several acres surrounding the old post office across Stewart Avenue from the Lady Luck.
That building, also a former federal courthouse, is slated to become the home of the mob museum.
The delay in the project could be, in part, due to the size differences between the properties. The Gold Spike and Travel Inn combined have 170 rooms; the Lady Luck has 743 rooms in two towers.
In other words: a lesson from this recession may be that with modest goals, achievements are still possible. Overreach, and plans can be slowed by their sheer scope.
Such appears to be the case with other big redevelopment projects slated for downtown that are facing delays or might be scaled back — a new city hall, the World Jewelry Center and residential development in Symphony Park.
The Lady Luck’s troubles aren’t for a lack of city support.
CIM may soon be the beneficiary of the city’s ongoing efforts to designate the 4.5 acres surrounding the mob museum as a Tourism Improvement District.
If the improvement district is approved, as much as $3 million annually in sales tax revenue will be put back into the project to finance a public plaza and parking garage. In return, city officials say, the deal locks CIM into making $100 million worth of improvements to the Lady Luck.
CIM also appears to have gotten a good deal on its Lady Luck purchase price of $25 million. Appraisals commissioned by the city showed the property to be worth as much as $60 million.
By comparison, the Siegel Group has received only a small amount of city assistance — about $88,000 for exterior visual improvements — for the Gold Spike and Travel Inn.
Those properties cost $21 million and $5 million respectively. According to Crandall, the Siegel Group secured most of the financing for the deal, including the additional $5 million for renovations, through a bank loan.
Crandall said he’s confident they’ll be able to pay it back. In the past six weeks, room occupancy rates have skyrocketed, he said, to 93 percent to 100 percent. That compares with less than 50 percent before the casino was remodeled. And the renovated rooms haven’t debuted yet.
What was once a dump is now a respectable-looking mini-casino with bolstered security and new everything, from major kitchen appliances and gaming tables to the aqua/white paint schemes in the rooms.
“Everyone told us, ‘You’re crazy, you can’t get it done,’ ” Crandall said. “But that was just like medicine, helping us succeed.”
When they reopened their casino with the new slots, I was surprised that all slots (videopoker) were hand-pay modus. No ticket-out, but hand pay. Looks like a great service once, but keeps you waiting for your money at busy times. I tried to find good machines but they were hard to find because of the super low denominations. I think most players of the Gold Spike are nickel players, and videopoker with 99.50 per cent pay back on nickel is a zero profit game for the operator. I take it that's the reason. On the other hand, it would be nice to see great room rates , even during the weekends, which would certainly attract the gamblers.
From Switzerland
Congrats to the Siegel group.
I wish the Sun article would have posted pictures of the remodel inside.
BorisR are you kidding me? You'll fly from Switzerland to go to the Gold Spike? It's a dump in a bigger dump. The Sun has tried like hell to promote the dump that is the downtown and the Gold Spike....But wait, I see..Now I get it...Switzerland may have many fewer bums and crack heads. You like the "gritty" ambiance you can only get from the feeling that you could get accosted for the change in your pocket. You should be careful to only carry American coins. If they find some Swiss coinage, you could find yourself in a more difficult spot. Enjoy!
Downtown Las Vegas is fantastic for the budget traveller. I have stayed at the Gold Spike several times before the renovations, and it is great that the new owners have refurbished it. Everything is less expensive downtown, hotels, meals, entertainment, plus all the casinos are within very easy walking distance. In my opinion, downtown Las is the best part of Las Vegas. The slots do seem to pay back much better than the Strip, although nowhere is loose anymore. Congratulations on the Gold Spike also for keeping low denomination machines for dedicated "low-rollers" like myself.
The financial equation is a stretch (like everyone's these days) but I have been watching the development at the Gold Spike and I am impressed. The property has done an excellent design job despite a limited budget and by all accounts management "gets it". Obviously the Gold Spike is not going to be the employer of choice and the property is a likely training ground with a turnover. Regardless of these challenges, the attitude of staff and management from the pit to the bar, cage, and restaurant have been excellent on repeated visits. Amenities are limited but the property is fresh, clean, and trendy. The food is good!.
I haven't been in this place in 25 years it was such a hole. After reading this I am calling some friends and were gonna go check it out. I love it when a little place like this can show the big boys hows it's done and make it especially in this tough economy.
Congrats. I hope they succeed! Great story.
I've been coming to Las Vegas for vacation every year for the past 14 years. We stay on the strip because we get the rooms comped most of the time, but always go downtown several times per trip. Been to the Gold Spike many times as well as the El Cortez. Used to be the first thing when you went in was the clowd of smoke hitting you and once you got past that you had to deal with the vagrants and hookers. Reasons we visit either place is the small size, the "old vegas" atmosphere and of course the lower limits games. Happy to hear that both places have been upgraded and I'm looking forward to seeing both when I go in feb. May even book a night at the El Cortez. Best of luck to both propertys!
Yet another property downtown that "gets it". Until recently, I had only been to the Gold Spike once. Nine years ago I got an offer in the mail for 2 free meals. I walked in that place for the first time ever with a friend of mine from out of town. I knew the place was a dive. We looked at the place serving the food, and just walked out. I don't mind eating at dives, but that place was disgusting. Today, Gold Spike is fresh and clean...nice to see. They, along with El Cortez, El Cortez Cabana Suites, Golden Nugget, among others are making improvements. The caliber of people walking the streets is improving, good change is happening downtown everyday. The MOB Museum is taking shape, there is new construction in the Arts District with the new Brett Wesley Gallery, Symphony Park is seeing The Smith Center for the Performing Arts going up, and the Cleveland Clinic Lou Ruvo Brain Center is nearing completion. Four new restaurants have sprung up in the past several months. Downtown Las Vegas continues to get down...even in a down economy.
"Ambience free?"
The old-time, "real" feel to Downtown IS exactly what the area has going for it. I, for one, have never gotten why people come from all over the country, just to pay through the nose for the same restaurant chains and mall shopping experience on the strip, that they can get back home. Oh, I suppose if somebody came in from, say, Eastern Oregon, they might not have The Gap, or one of those supposedly upscale franchised restaurants found in the major casinos. But most of the rest of the country does. The only real difference between what's on the Sterile Strip, and the rest of America, is the over-priced snob appeal aimed at the hoi polloi.
The food, gambling, AND ambience of downtown is a superior bargain. Take the Duce down the Strip if you must see Carlos Santana. Personally, I'd prefer to see him when he's playing at the Santa Clara County Fairgrounds. Like everything else, you can get the same Carlos far cheaper, when he's not on the strip.
If a person goes downtown will their HOA fine them for that?
Good job for the Siegel Group for making Odgen Ave a better place. Let's hope the City Council will make them part owners of the Lady Luck. Maybe they could make them into Weekly room rental properties like they have all around town. Maybe they can also buy Neonopolis and implode it. Make it a Hotel/Casino that caters to the same weekly rental guest that made them famous. I want to sign up for a Siegel Card so I don't have to pay for my morgage and have someone clean up my mess everyday while I gamble downstair with my kids college funds.
I also hear rumors that there is no Olive Garden downtown. How could this be true?
hey, test12, yes, I fly from Switzerland to good old Downtown, Las Vegas, because that's where it all started, and because it has the old "charme" of something that's hard to find elsewhere. I would never want to fly 16 hours and then check-into a hotel a la "MGM Grand or Planet Hollywood". These noise factories are not what I am looking for.
To tell you the truth, it's the old school casinos of Las Vegas that probably will go through this recession without major damages. Jerry's Nugget, El Cortez, the other locals places such as Orleans, SunCoast, Rampart, South Point and the very old casinos in the Downtown area, that's what I am looking for when I goto Vegas. If I need super high tech world casinos, I'd probably skip Vegas anyway and instead travel to Macao...or coming up soon....Singapore!!! ....which is definetely on my schedule for 2010 or 2011, anyway. This little Gold Spike Casino on Odgen is something that many tourists probably have not seen. It's unique and hard to imagine they can somewhat make it. Although, I hope that they raised the "minimum level" of patrons they're catering to by just a notch. I would not want to lose my money sitting on a videopoker machine next to a guy who apparently needs a shower or hasn't seen a barber in 6 months. They should not let in "simply everybody" who has 5 dollars in his pockets for gambling. This is my input to the managers. Nice little casino you got there :))))