As Fernando Leal begins serious planning for redevelopment of Fitzgeralds Casino/Hotel into a boutique hotel, he's trying to envision what downtown Reno will be like three years from now.
The bargain price his L3 Development LLC paid for Fitzgeralds 11 months ago gives him some options that otherwise might not be available.
Leal and Robert A. Cashell Jr., the president of Fitzgeralds, spoke about the redevelopment plans in measured words last week. After all, some 475 employees of the casino will lose their jobs when the casino
property closes at the end of November, and both executives said they want to be respectful of those workers.
Besides, Leal said, planning isn't far along and there's not much to talk about yet.
But the developer whose big redevelopment project, The Montage, will greet the arrival of its first residents late this month has a vision for how the redeveloped casino hotel fits into a new downtown.
For starters, Leal said, he believes the downtown market in a couple of years will support a hotel in which gaming plays only a small role.
He envisions a boutique hotel that, to use his words, isn't "gaming-centric." The property might include a small casino essentially, another first-floor retail use but gaming won't be the centerpiece of the hotel.
If guests of the new hotel want more gaming, plenty of opportunities abound at the nearby Harrah's, Silver Legacy, Eldorado and Circus Circus properties.
But Leal thinks the growing number of other alternatives downtown also will draw visitors. Ruth's Chris Steakhouse, for instance, is on track to create an 11,000-square-foot restaurant at The Montage. A new cover over two blocks of the ReTRAC will provide a plaza with performance spaces. Retail development is planned at the site of the Regional Transportation District's bus transfer station. A new ballpark is under way.
"I don't believe the primary driver of this tourism market is necessarily going to be gaming," he says.
A boutique hotel a distinctive property priced in the area of $150 a night provides an alternative to travelers for whom gaming is a lesser priority.
"We believe that there is a demand for a moderately priced thee- star hotel with a high-touch customer service, great restaurants, shops, small concert venue, and a world class entertainment facility that can be used by families by day and adults in the evening," he said.
L3 Development LLC has some breathing room to develop a new business model for the Fitzgeralds redevelopment project because it picked up the property at a modest cost.
"We bought the property very right," says Leal. Although he doesn't disclose the price, some observers of the Reno gaming market believe L3 Development paid something less than $25 million for the Fitzgeralds
property.
Its location near The Montage was another factor, Leal said, as it allows L3 Develop-ment to work on a larger canvas with its redevelopment plans.
The 351 rooms in the hotel are about 400 square foot each, and L3 doesn't believe it will need to do the same sort of down-to-the-steel reconstruction that it faced in redevelopment of The Montage. That, too,
helps keep the project's costs in line.
Still, there are no guarantees the new concept will work.
"Are we scared? Yes," said Leal. "Our crystal ball, like many others today, is not working. This requires us to rely on the most basic fundamental principle of supply and demand. We think there is an over supply of great gaming venues in our immediate area with a demand that is becoming more and more challenging to harness."
Closure of the Fitzgeralds Casino/Hotel at the end of November is earlier that Cashell and Leal had envisioned when their companies joined forces to buy and run the property last November.
But the gaming economy is weaker than they expected, and the winter months always are tough for casinos in northern Nevada.
Still, closure of the casino was simply a matter of time, Leal said.
"I never looked at that that property from the gaming perspective. I looked at it from the development
perspective," he said. "We were buying the asset. We weren't buying gaming."
Along with the Fitzgeralds site, L3 controls adjacent properties that include the Old Reno Casino, the Reno
Mercantile Building and the Primm Richards Property.
Some of the condos in The Montage overlook the Fitzgeralds property. About 40 percent of the 380 units in The Montage have been sold, Leal said.
