Parks terminate Hard Rock managers
October 18, 2015
A hearing in a $9.6 million lawsuit seeking payment for the renovation of the Hard Rock Hotel & Casino in Stateline is scheduled for Oct. 26 in Minden.
On Thursday, defendants Jon and David Park sued the property management company in Washoe County, claiming they approved change orders that nearly doubled the cost of the casino's renovation and mismanaged the hotel once it was done.
The Parks, managers of Neva One LLC, term terminated their management agreement with W-G Stateline and Warner Hospitality of Las Vegas before filing the lawsuit in Washoe County District Court.
"We are taking all actions that we consider appropriate to strengthen the property," David Park said. "We believe the changes at the Hard Rock Hotel & Casino Lake Tahoe will help us be in a better position to resolve issues that came about during the renovation project."
The relationship between the Parks and Warner Hospitalities Bill Warner began before work started to convert the Horizon Hotel and Casino into the Hard Rock, according to latest court filing.
Warner's companies agreed to do a market analysis, manage the renovation and conduct the opening and oversee training on the property once it opened.
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The Parks claim that any change orders of more than $10,000 or totaling more than $200,000 were supposed to be approved by them.
Shortly before the casino closed in spring 2014, Warner Gaming presented a plan to brand the Horizon as the Hard Rock, saying it would be superior to the originally planned Park Tahoe brand.
The Parks raised $60 million in financing to renovate the property, and after closing the hotel, entered an agreement with SMC Construction Co. to do the casino renovation for a maximum price of $9.6 million. They entered another contract for renovation of the hotel towers.
The casino opened in January 2015 to fanfair, but by May SMC had filed a lien seeking $18.9 million from the Parks for work they'd done. Floors of the hotel towers remained incomplete.
"Warner has failed to manage the property properly, resulting in customer dissatisfaction, bad publicity, employee turnover and revenue well below Warners's projections," according to the Washoe County lawsuit.
In a statement issued on Thursday, the Parks said they will be more closely involved in the operations of the Hard Rock, emphasizing better training, support for employees, local control and decision making, and improved customer service.
"Opening a property is a very labor intensive proposition and one which we couldn't have accomplished without the hard work and dedication of our valuable employees," said co-owner Jon Park. "We expect our customer service to be at the highest level. As such, we are committed to being personally involved in providing our employees with proper training and the support necessary to meet that expectation."
Long-time Northern Nevada gaming consultants Rick Stevens and Jim Roets have taken over the property as interim management consultants.
"We are fortunate to be working with two seasoned gaming experts in Jim Roets and Rick Stevens during this transition," said co-owner David Park. "Their extensive and successful backgrounds in on-property management and gaming operations will guide us as we look to the future of the property."
Following a hearing in Douglas County District Court in June, the Parks and SMC agreed to the court's order that the parties work towards a mutual resolution of the case.
Although a settlement has not been reached, a continued hearing is scheduled for Monday, and the parties are in communication.
"We are eager to move forward in a positive direction for the property, our valuable employees and the community," said David Park.