Thursday’s suit in Washoe County claims that change orders were approved by the property management company nearly doubling the renovation costs of the casino, and that it mismanaged the hotel upon completion. Prior to the filing in the Washoe County District Court the management agreement between Warner Hospitality of Las Vegas and W-G Stateline was terminated by Jon and David Park.
According to the latest court filing, Warner’s company was charged with managing renovation, market analysis and once opened overseeing training on the property which was converted from the Horizon Hotel and Casino into the Hard Rock. According to the agreement, change orders between $10,000 that totaled more than $200,000 were to be approved by the Parks. According to the lawsuit, “Warner has failed to manage the property properly, resulting in customer dissatisfaction, bad publicity, employee turnover and revenue well below Warner’s projections,” as obtained from the Tahoe Daily Tribune.
Warner Gaming presented a plan to the Parks to brand the Horizon as the Hard Rock instead of the Park Tahoe brand as originally planned, and the Parks raised $60 million to finance the renovation. In separate agreements it was decided that for a maximum price of $9.6 million SMC Construction Co. would be responsible for the casino renovation while another contract would be entered into for the hotel towers renovation. In May a lien seeking $18.9 was filed by SMC for work that has been done for the Parks, after the casino opened to fanfare in January 2015. The hotel towers floors remained unfinished.
The Parks issued a statement on Thursday saying that they would be more directly involved in Hard Rock operations and the training of employees in order to meet and exceed customer service expectations. In addition they named Rick Stevens and Jim Roets, well-established Northern Nevada gaming consultants, as the property’s interim management consultants.
SMC and the Parks agreed to a court order from a June hearing in a Douglas County District Court to work together towards a mutual resolution of the case, and while a settlement hasn’t been reached yet they are in communication. A continued hearing is scheduled for today.