In a surprise move, Jacobs Entertainment outbid local developer Marmot Properties for the Bonanza Inn in downtown Reno after initially stating it was no longer bidding on the property.
Jacobs bid $3,005,000 for the property at a probate sale on Friday, surpassing a previous purchase agreement made by Marmot for $3 million.
Jacobs Entertainment, which owns the J Resort hotel-casino and is also developing the Reno Neon Line District project, plans to turn the old motel into a property for workforce housing, according to CEO Jeff Jacobs.
“We will continue to move forward with chartering a new path for Reno’s Neon Line with the creation of high quality housing options as a key component of that vision,” Jacobs told the Reno Gazette Journal.
“To that end, we are very excited to have secured the Bonanza Inn at today’s probate auction to move forward with our plans to deliver approximately 50 units of quality, workforce housing to improve the uninhabitable current structure.”
Jacobs Entertainment does about face on Bonanza Inn
The acquisition comes just weeks after Jacobs said it was no longer bidding on the Bonanza Inn.
Asked about the change of heart, Jacobs said the company figured out how to make the project pencil out.
“Our development team has some new ideas to keep construction costs contained, allowing the project to be economically feasible,” Jacobs said.
“We strongly believe that workforce housing is the most appropriate use for the future of this property and look forward to delivering much needed housing for Reno’s working families.”
Marmot loses out on Bonanza Inn by just $5,000
Marmot Properties CEO Batuhan Zadeh expressed disappointment in failing to acquire the property by just $5,000. Marmot’s purchase agreement price was available publicly, Zadeh told the RGJ on Friday.
Zadeh recently acquired the former Junkee location in Midtown and was hoping to make the Bonanza a key part of his company’s foray into downtown Reno after focusing mostly on Midtown projects. Zadeh owns the former Santa Fe Hotel building as well.
“We had a bona fide purchase agreement (but) it was a fair and legal process,” Zadeh said.
“We spent a lot of time on this and we would have loved to reactivate the building but we respect the legal process and we’re going to let it go.”
Jacobs opts for workforce housing instead of demolition
Jacobs Entertainment’s decision to turn the Bonanza Inn into workforce housing instead of demolishing the property will be welcome news in a community that has struggled with housing supply.
Jacobs has been criticized in the past for acquiring and then demolishing several old motels in downtown Reno as part of its Neon Line project. The blighted motels were often seen as de facto low-income housing in a city that continues to struggle with housing affordability.
Jacobs once again defended the decision by his company to demolish the properties.
“When properties are beyond saving due to neglect from prior owners, our team supports tenants and works diligently to help them find new housing,” Jacobs said.
“We’ve spent hundreds of staff hours and hundreds of thousands of dollars to identify new housing options, provide relocation services, pay rental down payments and more.”
