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Chris Sieroty

Plans to reopen Nevada casino delayed by lawsuit

22 July 2011

LAS VEGAS, Nevada -- Plans to renovate and reopen the Roadhouse Casino in Henderson remained on hold Thursday after a district court judge allowed a lawsuit filed by competitor Sunset Station LLC to proceed.

Clark County District Court Judge Gloria Sturman, however, did dismiss three claims that Henderson City Council members violated state law by meeting secretly on Station's challenge of a land use permit for the Roadhouse property.

"It was an important ruling that she found we did not violate the state's open meeting law. On the other issues, all we can do is go forward," Christine Guerci-Nyhus, Henderson's acting city attorney, said after the two-hour hearing.

The dispute began in November when the Sunset Station Hotel and Casino sued, asserting that the city cannot approve plans for unrestricted gaming without a hotel at the defunct Roadhouse casino at 2100 Boulder Highway. Also named in the lawsuit was Robert McMackin, owner of the Roadhouse and his company, Marengo Inc.

Todd Bice, an attorney for Sunset Station, argued McMackin lacks a valid conditional use permit to revive the casino, and that he must comply with state law by investing in a hotel of at least 200 rooms -- as Station Casinos has done for Sunset Station, Boulder Station and Fiesta Henderson.

In its lawsuit, Sunset Station did not challenge the gaming license held by Roadhouse but focused on the city's land use permits.

"We as a nonrestricted operator have diligently followed the law as it's written and have built amenities for the public on our properties -- amenities that have benefited the public by creating jobs," Bice said. "(McMackin) wants something only special for him."

Nick Santoro, an attorney representing McMackin, countered that the Roadhouse is exempt from this requirement. Santoro said Station has no legal standing to sue because the issuance or denial of a permit is a land use issue that needed to be upheld by the planning commission and city council before it can be brought before a judge.

Santoro said Sunset Station's lawsuit is simply an effort to stifle competition, and that the company has no right to maintain a certain profit level or market share.

Bice didn't directly address that point.

McMackin in 1992 received city approval to remodel the Roadhouse, but never operated the property. McMackin received several extensions over the years to his conditional use permit until an extension was denied on Aug. 1, 2006 by the Henderson Planning Commission.

Bice said the city of Henderson and McMackin understood that all the rights to operate the Roadhouse without a hotel would go away with the denial of the conditional use permit extension in 2006.

"I have real concerns about the way this was handled," said Sturman, in denying the city's dismissal motion.

"We are disappointed that the judge did not dismiss all of Station's claims before her today," said Elizabeth Trosper, a spokeswoman for McMackin and Roadhouse casino. "Our intent, if successful, was to start construction immediately, which would have potentially resulted in $2.3 million in new spending."

Sunset Station amended its lawsuit in January, claiming the city council and the director of community development held illegal private meetings to discuss the matter.

Bice claimed at a Jan. 6 meeting "a quorum of City County members" met in private with their attorneys and instructed that Sunset Station's challenge of the permit for Roadhouse be denied. He said there was no exception to the state's open meeting law that would allow a closed-door session, and noted that it was no coincidence that L. Tracy Foutz, assistant director of community development, sent a letter rejecting Sunset Station's appeal a day after the meeting.

Guerci-Nyhus said a legal "non-meeting" was held between the City Council and the City Attorney's office to the discuss the situation along with other legal matters. She noted that state law allows the council to meet privately with its attorney to discuss legal matters. She said no action was taken at the meeting, which would be a violation of the law.

City Council members and staff have submitted sworn affidavits that no laws were violated, but Bice dismissed them.

"I'm a bit jaded when I hear a public official saying, 'Trust us, we did nothing wrong," Bice said.

Guerci-Nyhus said Bice has no proof that the law was violated and called his argument a "fishing expedition."