Opinion: Neon line: promises unfulfilled – Nevada Globe

Jacobs Entertainment (JEI) leads a re -broadcast in real estate and a financial disaster with epic proportions. They have not fulfilled their promises and want the city to help financing their unscrupulous vision for a “neon line” to the west of the center of Renault.

Purchase in West Renault

JEI began acquired property in Renault west of the city center in 2015 with Gold Dust West. In 2017, they started buying again, acquiring a hotel and casino of Sands Regency for $ 26 million, and Gold and Silver Inn, along with up to $ 100 other properties for approximately a total of $ 100 million.

Jay applied the Renault Municipal Council with promises of reconstruction and received permits to demolish up to 45 properties, including 18 weeks of rent, displacing hundreds of low -income residents.

JEI has built only one new property, 245 Arlington Apartment and renovates only one, Renova’s apartments. There is no progress in the development of other batches. The company tried to attract partners for a joint venture or sell these properties, but there is no progress since 2017.

Jei focuses on the renovation of The Sands Regency in the resort of J, including the construction of Glow Plaza, and is currently building a place for an outdoor festival on the 2nd and Arlington as part of their vision on the neon line.

Neglected casino property

The Sands Regency, an 800-bedroom casino hotel, replaced his hands many times after expanding in 1988. It was sold to Herbst in 2006, Truckee Gaming in 2013 and JEI in 2017. He grew into anxiety.

JEI has been reported to have taken $ 500 million in debt at $ 6.75% interest to fund Sands regency repair at J. This is an annual payment of $ 33.75 million.

The renovation began in 2019, but the property is now facing a non -compliance in customer demographics. Historically, she takes care of the crowd of blue collars, but repair increased prices, alienating her traditional customer base.

Social media reviews show widespread dissatisfaction with the price increase and they indicate that it is not a resort like other large casino properties in Renault.

Unexpected viability of J Resort

JEI is a private company that does not publish its accounting reports. The forecasts and conclusions in this article are based on publicly available information, standard factors and financial ratios.

In order for J Resort to achieve financial viability, it will have to generate about $ 110 million in gross revenue, which is comparable to the Atlantis casino, which reports $ 133 million revenue, with a similar number of premises.

However, on the basis of operating costs and debt service obligations, even at this level of revenue, J Resort can be held with an annual loss of $ 7 million, which will require Jacobs to allocate the debt service company over the whole JEI portfolio of the whole casino.

JEI seems to be relying on Atlantis level revenue, but current conditions do not support such optimism. Jay seems to be relies on on the festival playground of the 2nd and Arlington to deal with shortages, but this event space is unlikely to generate the necessary revenue.

A risk of Jacobs occurring

$ 500 million bonds of $ 500 million ripen in 2029, and its ability to refinance is uncertain. Other casinos usually issue bonds with 7-10 years, which allows more time to accumulate cash reserves. The five -year bond term of JEI implies a significant risk of refinancing.

The company has not developed any of the 100+ lots it has acquired, which means that it cannot generate revenue from them or use them as a refinancing collateral. If the company is unable to provide additional funds or attract partners for development, it seems likely to be unknown.

Requests for public aid

JEI has requested considerable financial support from the city of Renault, including $ 46 million in tax financing bonds that are in anticipation, 40% (up to $ 20 million) new tax revenue, $ 4.6 million to improve infrastructure and $ 1.57 million dollars in sewage sewage sewage system sewage and $ 1.57 million in sewage sewage sewage system sewage sewage system and $ 1.57 million in sewage sewage system sewage and $ 1.57 million dollars in sewage sewage sewage system sewage sewage system sewage and $ 1.57 million in sewage sewage system sewage sewage system in sewer sewage system sewage in sewage sewage system sewage Delaying permits for the construction and postponement of a sewer fee with a 5-year payment schedule.

These demands make a burden on Renault’s tense finances. Renault faced a budget deficit of $ 25 million in 2026. The city’s reconstruction fund was exhausted due to insufficient presentation of the bowling stadium, an event center and a ballroom, which were financed with approximately $ 100 million tax stimulating bonds through 90 years.

Renault has already lost approximately $ 2.5 million in tax revenue over the last five years due to the demolition of JEI of 18 motels. Property tax revenue has decreased as the demolished properties reduce the taxable value, but the amount is difficult to determine.

Risks for the city of Renault

Jeff Jacobs, CEO of the company, is known for high -risk investments with a high ten -year -old age. He publicly stated that the development of neon lines would be the stone of his career. However, his financial decisions imply a speculative rather than a strategically sustainable approach.

Although he received significant discounts from the Renault Municipal Council, JEI failed to present a specific timeline for development. Hundreds of residents were displaced and citizens’ objections were ignored. Jacobs’ political ties, including the contribution of the campaign and consultative roles, have influenced the decision -making in the city. The city allowed Jay to circumvent the provisions of the signs and the billboard, leading to legal action by picturesque Nevada.

If JEI fails with the vision of the neon line, Reno will remain with free batches and lost tax revenue. The city must be cautious before approving more financial benefits for Jacobs.

Given these concerns, the more financial support for JEI must be reviewed by the Renault Municipal Council until the company demonstrates a viable path forward.

Conclusion

JEI must provide transparent development plans and implementation strategies and be held.

The Renault Municipal Council must seek a public contribution before providing additional financial assistance.

JEI needs to find ways to provide revenue from its free lots, even through discount sales or joint ventures with developers.

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