Hearing set for casino dispute

Attorneys representing Sunset Station Inc., the owner of the Roadhouse Casino and the city of Henderson are all expected to appear in court April 15.

The hearing comes about six months after Sunset Station, which is owned by Station Casinos Inc., sued the city and the casino's owner in Clark County District Court, claiming city officials wrongly approved plans for nonrestricted gaming without a hotel at the Roadhouse Casino.

The casino on Boulder Highway in Henderson has operated with a nonrestricted gaming license, which was grandfathered in by the state because the property doesn't operate a hotel. To maintain its license, the Roadhouse opens one day a year and operates a minimum of 16 slot machines for eight hours.

Sunset Station argues that Roadhouse must comply with state law by building a hotel. Station Casinos' local properties -- Sunset Station, Boulder Station and Fiesta Henderson -- all include hotels with at least 200 rooms.

The city and Roadhouse owner Robert McMackin insist that the property is exempt from the hotel requirement. In December, McMackin and his company Marengo Inc. announced the company's renovation plans had been put on hold because of the lawsuit.

In January, Sunset Station amended its complaint, charging that on Nov. 17 it had appealed the approval of the Roadhouse plan and from there on the city council and Stephanie Garcia-Vause, director of community development, held a series of private discussions concerning Sunset Station's appeal.

"These meetings were conducted for purposes of circumventing Nevada's open meeting law," the amended complaint alleged. Sunset Station alleges that at one of these meetings in early January a quorum of City Council members met "in private to consider and take action regarding Sunset's appeal."

"There is no exception which would authorize the city to meet in closed-door sessions to discuss and take action concerning Sunset's protest and appeal of the application," the complaint said.

In response, the city filed a motion on Feb. 22 to have the lawsuit dismissed or have the claims of open meeting law violations removed from Sunset Station's lawsuit. In the motion, Christine Guerci-Nyhus, senior assistant city attorney, argued that the casino has no legal right to sue over the city's approval of a potential competitor's operating permit.

"The council has the power to regulate business, regulate all matters related to buildings, and enact zoning and planning provisions within the city," the complaint said. Sunset Station does not have a "right to a certain profit level or to a certain market share."

Attorneys for Sunset Station responded last week with a filing claiming that they had gathered evidence showing that in fact a decision was made at a closed-door meeting to deny their appeal. The Roadhouse "along with the city, now seek dismissal of the legal challenge, hoping to cover up the backroom deal that was contrived to try and circumvent the law."

The gaming company also claimed in its 23-page complaint that L. Tracy Foutz, assistant director of community development, saw a letter rejecting Sunset Station's appeal a day after the private meeting and that it was no coincidence.

"Now, the city tells this court that it must close its eyes and just assume it was a coincidence that the untimely rejection letter came on the day after their closed-door session, and on the same day in which the mayor admits he spoke with the director's deputy regarding that letter," the complaint said. "Not wanting to be subject to cross-examination, the city hastily files a motion ... telling this court that it must blindly accept the city's self-serving declarations, so that Sunset cannot use the discovery process to ferret out what actually transpired."

Attorneys for Sunset Station wrote that contrary to McMackin's and the city's hopes, "the law does not turn a blind eye to such transparent maneuvering." In its complaint, the company argued that it has been a participant in the Roadhouse matter for more than five years and "has standing to challenge the city's unlawful actions that have occurred."

George Garcia, president of the Henderson-based planning and consulting firm GC Garcia Inc., said his client was determining whether to proceed with the remodeling of the Roadhouse Casino. He said McMackin had been working with the city and would need building permits to proceed with the project.

"Sunset Station has tried to create uncertainty," Garcia said. "By doing that they are creating a hostile environment. Clearly the lawsuit is intended to do that."

He said he sees the lawsuit as an effort by Station Casinos to remove any competition. Garcia said the lawsuit jeopardizes jobs and redevelopment in an area that really needs it.

Contact reporter Chris Sieroty at
csieroty@reviewjournal.com or 702-477-3893.