100-room minimum mandated for future casinos

Citing concerns about the future look of Carson City and its viability as a tourist destination, Carson City supervisors on Thursday approved -- by a 3-1 vote -- an ordinance that will require new casinos to incorporate 100 rooms as part of the same property.

The law was hotly debated for 2-1/2 hours at the board's Thursday meeting, where proponents said the city's goal of attractive first-class hotel/casino properties required placing restrictions on the ability of competitors to "siphon" business with low-startup slot arcades.

Opponents, mostly Carson City small business and property owners, said the restriction is essentially a zoning change that disrupts the potential value of their endeavors.

Supervisors Robin Williamson, Jon Plank and Pete Livermore voted to pass the measure, while Mayor Ray Masayko dissented. Richard Staub abstained because of a potential conflict of interest.

"I'm not satisfied with Carson City as it is," Williamson told the community center crowd of approximately 40. "I know from personal experience that we need more quality hotel rooms.

"I know this community does not have a lot of land available. We need to set the bar higher for what we want developed on that land."

But Masayko had problems with the size and scope of the restrictions.

With the new law in place, developers who want to incorporate more than 15 slot machines in a property will have to make a large investment in a market that has so far shown little need for more hotel rooms. The jump between a 16th slot machine and 100 hotel rooms, he said, is a heavy burden for entrepreneurs.

"In my opinion, this standard is high, and not only is it high, it's arbitrarily high" Masayko said. "We've always been a step behind" Reno and Lake Tahoe. "Nothing we do as a government is going to change that."

The Carson City Gaming Association and its spokesman, Pi-on Plaza and Carson Station CEO Steve Bilyeu, said the change in law will help to foster development of a larger tourist base to fill future hotel developments.

"We are not looking at this as an ordinance to restrict competition as much as an ordinance to enhance the competition," he said. "We do feel strongly that if conditions stay the way they are, investment will be restricted."

Nevada casino owner Bob Cashell, former general manager of the Ormsby House, said his three-plus decades of experience in the gaming industry taught him that the proliferation of slot arcades does nothing to enrich the tourist economy.

"Slot arcades have a place, but they do not bring tourists," he said. "I've owned slot arcades, I've run slot arcades. I never spent a penny outside the community on promotion.

"With a hotel, you are forced to go outside the community."

But the bill's opponents said the ordinance is simply window dressing for the established casinos to lock out new comers from the Carson City market.

"I think this is a sham to connect (gaming properties and hotel rooms) together: If the rooms were needed, (hotels) would be built," said property owner Don Langston. "If the purpose of this ordinance is to restrict competition, then I believe it is against the law."

Joe Masini, part owner of Bodine's Restaurant in South Carson City, agreed.

"It's an anti-competitive, anti free-market measure," he said. "It favors big business over small business by denying equal protection under the law.

"We don't have a level playing field if you pass this ordinance."

The ordinance does provide a small window for interested developers to start or revive a gaming operation under the old rules. They will have up to 180 days to apply for an unrestricted license, while a defunct casino that at one time held an unrestricted license will have the ability to apply for renewal under the old rules within one year.

There was also some debate at Thursday's meeting over language added to allow appeals to the board. Although the paragraph was designed to make exceptions to the 100 hotel room rule for special circumstances, Deputy District Attorney Mark Forsberg advised the board that the appeal process could not be applied in that fashion.

As written, Forsberg said, the appeal clause could only apply to the rules as outlined in the ordinance, and may not be determined legal if future exceptions to the rules were made by the board.

Masayko and Staub showed misgivings about the snafu, suggesting the board vote be delayed, but at the urging of Plank and Williamson the vote went through.

Supervisors were set to approve the measure in December, but a vote was delayed when it was determined that a business impact statement had to be crafted under Nevada law. City Treasurer Al Kramer, author of the ordinance, contacted potentially affected businesses about the proposal and included their correspondence in the final draft.

He determined that "no likelihood of imposition of direct and significant economic burden is appropriate" because a grace period and grandfather clause allow current property owners to participate in gaming under the old rules.