To get an idea of the scrutiny it takes to be approved to run a casino in the state, consider this: Carlton Geer’s application to operate the Nugget casino in Sparks contains more than 10,000 pages.
Geer, the new president and chief executive officer of the Nugget, has worked morning to night for weeks to complete his application for the Nevada Gaming Commission and Gaming Control Board. The reams of paperwork are a nod to Nevada’s colorful past in casino gaming.
“That is a very deep background check to make sure that there aren’t any negative associations or any activities that might be a problem from a gaming or regulatory standpoint,” Geer says. “The gaming industry is the most highly regulated industry in the world — for good reason.”
Geer already holds approval for licensing as an individual by the Nevada Gaming Commission, but he still needs to get approval to run the Nugget property, a step he expects should be complete sometime in November.
“They want to make sure I have the capital funding and the strategies necessary to be successful in the gaming industry,” he says. “They are looking at it from what we will do differently, what is the capital and the capital source, and how will we make this property successful?
And those, of course, are the million-dollar questions.
Geer and partner Michael Kim recently formed a new business entity, Sheltie OpCo LLC, to operate the 1,500-room Nugget in Sparks. Sheltie OpCo partnered with Husky Finance, a middle-market lender based in New York City, to purchase the Nugget from the Ascuaga family and finance property-wide renovations designed to breathe new life into Spark’s largest hotel-casino.
It’s the first casino venture with Husky Finance, but Geer says Husky is looking for additional expansion opportunities within the gaming market — which could prove difficult since acquisition of a property the size of the Nugget sets the bar pretty high.
“This property is singular in a number of ways,” Geer says. “We have a freeway running right through it with our own dedicated off and onramps. It is a huge facility with a lot of amenities. It is well designed and just requires updates rather than a complete rebuild. It is going to be difficult to find the next one because this is a fantastic facility.”
Sheltie OpCo’s $50 million renovation plan is designed to bring in customers from the local market and tap the larger northern California driven-in market. The plan includes:
Painting the entire property
Renovating the aging portion of the property that abuts Victorian Avenue
Updating carpeting and flooring throughout the casino
Refreshing or upgrading Rosie’s Café, the buffet and steakhouse
Adding a new nightclub and entertainment venue
Sprucing up the showroom
Updating the convention areas
Renovating the west tower rooms
Relocating elements on the casino floor to create a more vibrant atmosphere
Upgrading HVAC systems to reduce the odor from cigarette smoke
Adding new restaurant concept
Creating more dramatic entryways to increase the sense of arrival.
Geer is still interviewing interior design and architectural firms. Once they decide on carpet and interior finishes, they can begin establishing a timeline for starting the work and creating a path for workflow that minimally disrupts casino and hotel operations.
“You want to have continuity with your design,” Geer says. “The interior design, once we determine what that is, will dictate what the exterior will look like. We want to make sure that as many people as possible know there is something new happening at the Nugget.”
Sheltie OpCo will retain the well-known Nugget brand and has rights to use the “John Ascauaga” portion of the name for some time. Future branding may identify the property as the Sparks Nugget or something similar, Geer says.
The Nugget will have a grand re-opening once the bulk of renovations are complete.
“We will want to re-introduce the Nugget to the populace that may have been here over the years,” Geer says. “We want to introduce the reasons to come or come back.”
Geer, 59, acknowledges that there is a lot of work to be done to reposition the Nugget for future success, but it’s a role he says he’s worked toward all his life. Geer worked at the Eldorado and the Peppermill in the 1980s and has held gaming licenses in Nevada and Indiana.
“I wasn’t ready 20 years ago. It took me a little longer than most people,” he says.
“The amount of effort that has been required to do this transaction has been substantial, but I’m very optimistic that it is going to be worthwhile to me and my partners.”
Similar to the game plan of other large casino properties in the market, the Nugget won’t rely heavily on gaming revenues but will create a destination that provides a well-rounded customer experience, with gaming but a piece of that puzzle.
Still, Geer is optimistic about the health of gaming revenue in northern Nevada, as well the recent rise in room rates where the average daily rate in August hit $100. And, he notes, the economy of northern California continues to improve.
Ultimately, though, Geer says that true success for the property means redefining the value proposition of the Nugget for both locals and tourists.
“We are in a different era; there is a different norm after the Great Recession. We have to give people what they want, whether it is entertainment, food, value pricing, excitement of the facility, updated décor, a nightclub entertainment experience, or shows. We want to be that entertainment facility that creates a hangout for locals, because we recognize the value that locals have to our facility. But we also have over 1,500 rooms, and we want to fill those with tourists who are looking for a good time, too.”
