Station Casinos LLC of Las Vegas has scored a big win in its lawsuit against the City of Henderson over plans for the closed Roadhouse Casino to reopen as a nonrestricted casino.
Station's Sunset Station property sued the city in 2010, charging it had unlawfully approved plans for the Roadhouse to operate as a nonrestricted casino — one with 16 or more machines — without the Roadhouse owner having to build a 200-room hotel like his nonrestricted competitors did.
Court papers filed Monday show Station is now dropping its suit against the city because the city attorney's office has reversed course and now agrees with Station on the Roadhouse issue.
That is, the city attorney has now stipulated that anyone running the Roadhouse as a nonrestricted casino will first have to comply with the current city code and build a 200-room hotel at the property on Boulder Highway and Sunset Road.
This 200-room requirement and other restrictions at the state and local level date to the 1990s and were aimed at blocking the proliferation of neighborhood ''slot joints.''
Roadhouse owner Robert McMackin portrayed Station's lawsuit as a David and Goliath battle in which the giant Station Casinos chain was trying to crush a small competitor, but Station insisted its lawsuit was aimed at maintaining a level playing field among casino operators. Station has three hotel-equipped properties in the area: Fiesta Henderson, Sunset Station and Boulder Station.
Court records and settlement papers filed Monday in the Station vs. Henderson and Roadhouse lawsuit spell out this timeline:
• Gaming was approved for the Roadhouse in 1988 with a city conditional use permit authorizing a casino and restaurant.
• McMackin purchased the Roadhouse and in 1992 received approval to add about 3,000 square feet of casino space.
• McMackin initially closed the Roadhouse in 2002. It was leased to a separate party from 2004-2007.
• With the property operating only sporadically over the years, McMackin sought and received five extensions of the 1988 conditional use permit, but an extension sought in 2006 was denied. This meant that in future applications to use the property as a nonrestricted casino, McMackin would have to comply with the updated city code requiring the 200 hotel rooms.
• In September 2010, McMackin submitted a design review application to "refurbish and reopen a casino'' on the property two miles from Sunset Station.
• In November 2010, the city community development director, on the advice of counsel, approved the application on the grounds that a conditional use permit for nonrestricted gaming for the property was still in existence.
• Station Casinos filed suit in 2010, and this month, the city attorney's office signed settlement papers saying the design review application should have been denied ''in light of the fact that no conditional use permit exists for nonrestricted gaming on the property."
Attorneys for the city, including new City Attorney Josh Reid, acknowledged in Monday's settlement that the city's Nov. 9, 2010, approval of the application for the reopening of the casino is invalid.
''The city has further reviewed and investigated the facts and circumstances surrounding approval of the application and determined that it was approved in error as there is no valid conditional use permit for the property and that any future gaming development on the property requires compliance with the existing provisions of the Henderson City Code, including the requirements for a resort hotel,'' says the stipulation settling the lawsuit between Station Casinos and the city.
Attorney Todd Bice of the law firm Pisanelli Bice PLLC, representing Station Casinos, said Monday that Station technically remains in litigation with McMackin over the disputed status of the Roadhouse and that hopefully that litigation can also be closed since the city has now sided with Station on the Roadhouse license status.
"We're grateful the city took a second look at it," Bice said of the licensing issue. Bice explained that while Josh Reid signed the settlement, technically called a ''stipulation'' adjudicating Station Casinos' claims against the city, talks had been under way with the city attorney's office prior to Reid's appointment in November.
McMackin could not immediately be reached for comment.
The mayor and City Council do not need to formally review or approve the settlement, city spokeswoman Kathy Blaha said.
By settling the lawsuit, the city and Station Casinos can move past what by 2011 had grown into an acrimonious dispute in which the locals casino giant claimed City Council members committed open meeting law violations and that there was a cover-up in the city's Roadhouse deliberations. A city spokesman at the time said these charges were "salacious and untrue."
As part of Monday's settlement, Station Casinos dropped its open meeting law claim and agreed to pay its own attorney's fees.