Coyote TV - High Desert Advocate

RUSTY PALMS 2010

NOVEMBER 2008 LEFT TO RIGHT WEST WENDOVER CITY MANAGER CHRIS MELVILLE, DIRECTOR OF PUBLIC WORK BRYCE KIMBER, FIRE CHIEF JEFF KNUDTSON, CITY COUNCILMEN EMILY CARTER & ROY BRIGGS, DEVELOPER STEVE WEINSTEIN, UTAH BANK REPRESENTATIVE ERIC PETERSEN AND WEST WENDOVER MAYOR DONNIE ANDERSEN STAND BEFORE THE SITE OF THE NEW RUSTY PALMS DEVELOPMENT. 

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     Anyone interested in a brand new almost completed anything but a casino just off I-80’s 410 exit to West Wendover?
    Utah’s Celtic Bank may have a deal for you.
    Both representatives from the bank and from the Rusty Palm confirmed this week months of speculation, the all but completed Rusty Palms project had been foreclosed on-- a victim of federal government complacency, state government inaction, and sometimes city government hostility.
    “His (builder Steve Weinstein) construction loan came due,” explained a Rusty Palms associate. “But with the project unfinished and no other money coming in we had to default.”
    Like most projects the construction of the Rusty Palms was financed with a construction loan, usually the loan comes due well after the project is completed and profits from project go to paying off the loan for its construction.
    However in Rusty Palms case delays brought about by mixed signals from West Wendover and then a six month trek through bureaucratic red tape on the state and federal level postponed its completion to well beyond the first payment date on the construction loan.
    The project won final approval from the West Wendover City Council in November 2008 and construction began almost immediately and continued through the winter. However while workers began building Weinstein began to receive troubling news, several of the businesses who first expressed interest in coming to the Palms either backed out or went out of business as the Great Recession began to take its toll in Utah.
    Facing prospects of a diminishing list of possible tenant, Weinstein began to look for ways to save his investment and found one-- turn it into a casino.
    The only hitch to the plan was West Wendover 150 room hotel room minimum ordinance passed the year before.

 

       Three years ago the council passed an ordinance severely restricting new casino development and putting a requirement that a new casino had to have at least 150 hotel rooms before it could win council okay.
    The restrictions are not unique to West Wendover. Indeed several Nevada cities have similar restrictions on the books.
    However in West Wendover’s case the city has not seen a new casino since 1986 with the exception of a small slot operation inside the Pilot Truck Stop.
    According to Weinstein, a few of the council appeared to be receptive of his request when he approached them individually.
    In fact because it was because of their initial reaction that Weinstein felt confident enough to ask for the question to be put on the agenda for the first meeting in March 2009.
    It was in March 2009 when economically things began to look bad for the Nevada/Utah border town.
    The Red Garter was announced to be closed, gaming win began what would become a 13 month streak of declines and all indications from both nationally and from Utah was that the economy was in for a very bumpy ride.
    The looming recession coupled with encouraging words given privately to the Park City builder gave him confidence that the council would approve his request.
    Weinstein was mistaken.

   When Weinstein made his request he was vigorously opposed by the Peppermill, first in a two page letter from Corporation President Bill Paganetti read out loud during the meeting and by local Peppermill executives in the audience including Chief of Wendover operations Gary Lewis.
    All testified that rescinding the ordinance would have a direct detrimental economic impact on the corporation.
    Of the five West Wendover City Councilmen, four of them Emily Carter, Johnny Gorum, Roy Briggs and Adam Rowley all work for the Peppermill and were subordinates of the executives who spoke so forcefully against Weinstein’s request.
    While the four Peppermill councilmen were later found to have violated Nevada Ethics law when they made their votes, the vote stood.
    Weinstein would have to find himself a non-casino tenant.
    Still work continued on the project, but a month later of 2009 it ran into another problem, one costing about a half a million dollars and more important than the money was the time.
    According to Weinstein  he was only informed through the city that April that he was going to be charged a half a million dollars by the NDOT for a right of access, essentially permission to for the road leading to the Rusty Palms cross an imaginary line.

“It was certainly a surprise to me and frankly I was completely unaware that I was liable for that charge.” Weinstein explained.
    The fact that the developer only learned of the charge after construction on the project began meant that the hefty surcharge was not taken into account in Rusty Palms financing.
    Finding half a million in good times is not the easiest task, finding it during a national recession of unprecedented proportions would have been even more difficult.
    Weinstein first appealed to the NDOT and then to the Governor Jim Gibbons. Melville also met with NDOT officials and in May, Assemblyman Carpenter got involved along with state Senator Dean Rhodes.
    Two more months of phone calls and negotiations passed and finally the city, the NDOT reached an agreement that in essence gave the right of access to the city and thus eliminate the half a million dollar charge.
    But while giving a verbal okay from Carson city and Washington DC was one thing, getting the written approval that would have allowed work to continue on the project was it turned out quite another.
    The permit was issued this February and by then it was simply too late. Facing payments due on his construction loan, no other income coming in, and no new chance at financing Weinstein’s dream turned into a nightmare.
    Rusty Palms and the 100 or so new jobs it would have created is if not dead at least deferred for a good time to come.