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Western Hotel owners seek to maintain gambling rights

2 December 2013

LAS VEGAS -- The owner of the former Western Hotel on Fremont Street is looking to preserve the right to offer gambling on the site, but it’s not shopping for roulette wheels and gaudy carpeting just yet.

The Las Vegas City Council will consider a request from Fifth Street Gaming to extend the gambling land use rights at 899 Fremont St. until February 2015.

The owner of the site needs more time, the application states, because “the lingering effects of the severe economic downturn” on downtown means improved business activity must occur “before redeveloping the Western is economically feasible or it can be leased.”

It wants the gambling land use rights to remain in place because it’s “considering the option of developing it into a new nonrestricted gaming establishment,” the applicant’s attorney stated in a letter to the city.

Former Western owner Tamares closed the property in January 2012. In March, Tamares sold the property to an entity connected to the Downtown Project, the $350 million urban renewal effort backed by Zappos CEO Tony Hsieh.

The application lists 899 Fremont LLC as the property owner with Andrew Donner, a developer and real estate partner for Downtown Project, as the contact. Fifth Street Gaming, the company that manages the recently opened Downtown Grand for CIM Group, is the listed applicant.

Both Hsieh and Donner said there are no immediate plans to develop the property as a casino, despite the request before the City Council.

Donner said they’re “considering all options and looking at all proposals.”

The Western, a longtime downmarket casino known for cheap booze and gambling, is in the heart of an area Downtown Project is seeking to revive.

It’s just east of Container Park, a Downtown Project-funded retail and entertainment center, and west of the renovated and reopened Atomic Liquors tavern.

So far the Downtown Project has focused real estate development efforts on trendy bars and restaurants and creating co-working space for technology entrepreneurs and has shied away from gambling.

After it acquired the Gold Spike casino earlier this year, the Downtown Project removed the gambling and used the former casino floor as a lounge and co-working space, but it has maintained the land-use entitlement for a casino.

Dennis Gutwald, an attorney for Fifth Street Gaming, said many old casinos were built before land use restrictions such as distance buffers were put in place.

For example, a new tavern use at the location would require a 1,500-foot distance separation from any churches, synagogues or liquor establishments. And Gutwald said a casino development created under modern land use restrictions would require a resort, which requires hundreds of hotel rooms and other amenities.

Retaining the entitlements is important even if there are no plans for a casino to preserve as many options as possible for future development, he said.

Even though Downtown Project and others have spent tens of millions of dollars on development in the downtown area in recent years Gutwald said that doesn’t mean it would be prudent to rush to redevelop the Western.

“It is not like you can just add a ton of development downtown all at once and it is going to be absorbed,” he said.

Councilman Bob Coffin, who represents the area, said he doesn’t expect the extension request to run into much resistance from City Hall.

“Since it is gaming now, you wouldn’t want to give up that entitlement,” Coffin said.