New Reno Casino Project on Hold Over Market Concerns

Article by : Erik Gibbs Dec 12, 2023

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Approximately one year after the initial unveiling of the project, Elevation Entertainment has decided to put a pause on its ambitious Firecreek Crossing Resort-Casino in Reno.

The decision is attributed to the challenging financial landscape. The envisioned Firecreek Crossing Resort-Casino, which promised to bring a fresh gaming experience to Reno, was set to be the city’s latest addition to the casino scene, arriving on the heels of the successful inauguration of Legends Bay Casino in Sparks just a year prior.

Notably, Legends Bay marked the first entirely new casino construction in Sparks in nearly thirty years.

According to the organization, amidst the admiration for Reno and its reputation, the current financial climate has compelled the company to pause its development. Elevation announced their plan to various media sources.

To the organization, the prospect of introducing a top-tier product to the market remains a top aspiration, yet the timing has not been right.

Among Elevation’s diversified portfolio are various commercial and residential real estate ventures featuring two prominent gaming establishments in California: Seven Mile Casino in Chula Vista, San Diego, and Stones Gambling Hall in Sacramento.

Elevation has not revealed the expected cost of constructing the Reno casino hotel. In contrast, Legends Bay’s construction cost was $120 million, and comparable properties in the region have fetched prices approaching $200 million.

The development of Firecreek Crossing Resort-Casino relies on obtaining financing. However, the prevailing economic conditions, characterized by interest rates reaching their highest levels in two decades, present obstacles for companies aiming to secure significant capital through borrowing.

Further complicating matters, Elevation’s private ownership status precludes the possibility of raising funds through public market equity sales, and accessing capital via debt markets is becoming a challenging endeavor.

Adding to the challenges faced by the developer is the increasing number of defaults on commercial real estate loans, leading banks to adopt a cautious approach in extending credit for fresh, expansive projects.

This predicament is particularly pronounced for smaller borrowers like Elevation, attempting to secure financing for endeavors in markets perceived by banks as susceptible to economic downturns, which is a description fitting for Reno.

If Firecreek Casino materializes, it is designed to comprise 201 guestrooms, 48 suites and a casino. The envisioned establishment will boast a lobby bar, a beer garden, multiple dining establishments, a food court and even a public park.

It will be situated at the junction of Kietzke Lane and South Virginia Street. This location, however, has witnessed the downfall of past gaming venue proposals.

Before the advent of the coronavirus pandemic, Red Rock Resorts, the parent company of Station Casino, had envisioned a development nearby. However, the global health crisis affected all progress on that front.

The parcel of land identified by Elevation for the construction of Firecreek currently remains vacant, serving as a Christmas tree sales venue in December. The rest of the year sees minimal activity with no noteworthy development on the site.