Thursday, June 15, 2006

An attempt by Las Vegas-based Station Casinos to gain a presence in the Reno
gaming market has met opposition from the statewide union that represents
hotel employees. Now, the labor organization is taking the challenge
directly to Reno residents. Culinary Workers Local 226, with help from the
Reno-based grass-roots organization Progressive Leadership Alliance of
Nevada, is seeking to qualify a ballot measure for the November election
that could stop construction of a planned Station Casinos property in south
Reno near the Mt. Rose Highway. Station Casinos, which is looking at
developing two casinos in the Reno area, says this initiative drive is just
the latest in a series of roadblocks tried by the Culinary Union against the
company. The Culinary has sought and failed to organize a vast majority of
the gaming company's Southern Nevada 14,000 employees over the past few
years. Twice, the Culinary has failed in its attempt to get Station Casinos
shareholders to pass various stockholder rights measures.

"They've made no secret that we're enemy No. 1 because we're the largest
nonunion gaming company," said Lesley Pittman, Station Casinos' vice
president of government relations. "We've spent two years going through the
regional and citizens' approval processes in Reno. In one fell swoop, (the
union) is trying to undo all that."

Station Casinos is expected to seek a special use permit in the next few
weeks for an estimated $500 million hotel-casino near the newly opened
Summit Sierra shopping center. Pittman said the project would be similar in
scope to the company's upscale Green Valley Ranch Resort in Henderson.

In addition, the company has already obtained a special-use permit to build
a 500-room, 17-story hotel-casino on eight acres across from the Reno-Sparks
Convention Center.

Pittman said the company has not determined which project would be built
first.

Meanwhile, the union is collecting signatures on a petition that would place
an initiative on the Nov. 7 ballot in Reno.

If passed, the measure would force a developer planning a casino outside the
city's traditional gaming corridors -- downtown Reno, near the airport and
adjacent to the convention center -- to seek approval from the city's
residents before building a resort.

The initiative also calls for a developer to offer a financial contribution
to the city of Reno to help the municipality pay down it's $236 million
debt, accumulated through redevelopment and a downtown railroad trench
project.

"Any casino built outside of Reno's core gaming area is going to adversely
impact the casinos in the city of Reno," Culinary spokesman Chris Bohner
said. "This petition is not about any specific property. It's about
protecting downtown Reno."

However, Station Casinos is the only gaming company planning projects in
Reno. The city has suffered in recent years, losing gamblers to American
Indian casinos in Northern California. In 2005, gaming revenue in Reno was
$754.8 million, a 1.7 percent increase from 2004. As a contrast, revenue
from Strip casinos was $6 billion in 2005, a 13 percent increase from 2004.

Reno casinos have posted gaming revenue gains during the first four months
of 2006.

"We're adding to the pie, not taking away," said Pittman, claiming company's
Thunder Valley casino outside Sacramento, Calif., has not affected Northern
Nevada gaming as long believed.

"(The projects) been met with open arms by the downtown tourism community,"
Pittman said.

Company officials said several Northern Nevada groups, including building
and construction trade unions and the Reno/Sparks Chamber of Commerce, have
taken positions against the initiative. Station Casinos believes the two
casinos could lead to 1,100 construction jobs and 2,150 new permanent jobs.

On Tuesday, the northern members of the Nevada Resort Association, a casino
trade organization, came out in opposition to the initiative.

"(The casinos) would like to see some expansion in the market and they think
the initiative would prevent new companies from investing in Reno," resort
association President Bill Bible said.

The union needs to collect 11,661 signatures from Reno voters by June 30 to
get the question on the November ballot. The petition drive launched on May
3. Supporters of the initiative launched a Web site, www.renotaxpayers
revolt.org.

Bohner said the union is actively seeking signatures. The Culinary, which
has 60,000 members statewide, represents 2,000 workers at Circus Circus Reno
and the Reno Hilton.

"There is a real risk to Reno if a casino developed outside the core
market," Bohner said, adding that the union supports Station Casino's plan
to build a property next to the convention center because it falls within
the main gaming sector.

Progressive Leadership Alliance, in November, put out an analysis on the
economic impact the proposed Station Casinos' property in south Reno would
have on the downtown casinos, saying the older properties could lose between
$14.2 million and $30 million in annual gaming revenue.

Money lost by downtown casinos would effect tax revenue used to pay down
Reno's $236 million debt that was accumulated through redevelopment efforts
and financing for the Retrac project, in which a trench was built to take
the railroad tracks running through downtown below street level.

Bohner said a casino developer would have to tell the city how much it would
pay toward reducing the city's debt if it were approved to build a casino
outside the downtown jurisdiction.

Andy Green, finance director for the city of Reno, didn't want to take a
stand on the initiative. However, he said the debt is being paid down
through room taxes, sales taxes and a $60 million payment by Union Pacific
Railroad.

Green said sales taxes have generated the bulk of the revenues dedicated to
paying down the debt.