Jacobs Entertainment (JEI) is leading Reno into a real estate and financial disaster of epic proportions. They have not delivered on their promises and they want the city to help finance their ill-conceived vision of a “Neon Line” west of downtown Reno.

A Buying Spree in West Reno

JEI began acquiring properties in Reno west of downtown in 2015 with the Gold Dust West. In 2017 they started buying again, acquiring the Sands Regency hotel and casino for $26 million and the Gold and Silver Inn along with up to 100 other properties for an estimated total of $100 million.

JEI enticed the Reno City Council with promises of redevelopment and obtained permits to demolish up to 45 properties, including 18 weekly rental motels, displacing hundreds of low-income residents.

JEI has built only one new property, the 245 Arlington Apartment, and renovated just one, The Renova Apartments. There has been no development progress across the remaining lots. The company has attempted to attract joint venture partners or to sell these properties, but there has been no progress since 2017.

JEI has focused on renovating the Sands Regency into the J Resort, including building the Glow Plaza, and is currently building an outdoor festival venue at 2nd and Arlington as a part of their Neon Line vision.

A Neglected Casino Property

The Sands Regency, an 800-room casino hotel, has changed hands multiple times since its expansion in 1988. It was sold to Herbst in 2006, Truckee Gaming in 2013, and JEI in 2017. It grew into disrepair.

JEI has reportedly taken on $500 million in debt at 6.75% interest to finance the renovation of the Sands Regency into the J Resort. This amounts to an annual interest payment of $33.75 million.

Renovations began in 2019, but the property now faces a mismatch in customer demographics. Historically, it catered to a blue-collar crowd, but the renovation has driven up prices, alienating its traditional customer base.

Reviews on social media indicate widespread dissatisfaction with the price increases, and they call out that it’s not a resort like other large casino properties in Reno.

Uncertain Viability of the J Resort

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

For the J Resort to achieve financial viability, it would need to generate about $110 million in gross revenue which is comparable to the Atlantis casino, which reported revenue of $133 million, with a similar room count.

However, based on operating expenses and debt service obligations, even at this revenue level, the J Resort might run at a $7 million annual loss, which would require Jacobs to distribute the debt service company-wide across of JEI’s entire casino portfolio.

JEI appears to be betting on achieving Atlantis-level revenue, but current conditions do not support such optimism. It looks like JEI is counting on the festival plaza at 2nd and Arlington to take up the shortfall, but this event space is unlikely to generate the necessary revenues.

Looming Risk for Jacobs

JEI’s $500 million in bonds mature in 2029, and its ability to refinance is uncertain. Other casinos typically issue bonds with 7-10 year terms, allowing more time to accumulate cash reserves. JEI’s five-year bond term suggests significant refinancing risk.

The company has not developed any of the 100+ lots it acquired, meaning it cannot generate revenue from them or use them as collateral for refinancing. If the company cannot secure additional funds or attract development partners, insolvency by 2029 appears likely.

Requests for Public Assistance

JEI has requested significant financial support from the City of Reno, including $46 million in tax-increment financing bonds which is pending, 40% (up to $20 million) of new tax revenue, $4.6 million in infrastructure improvement reimbursements, and $1.57 million in sewer fee abatement which has been granted, and building permit and sewer connection fee deferrals with a 5-year payment schedule.

These requests place a burden on Reno’s already strained finances. Reno is facing a $25 million budget deficit in 2026. The city’s redevelopment fund has been depleted due to the underperformance of the Bowling Stadium, Event Center, and Ballroom, which were financed with approximately $100 million in tax incentive bonds in the 1990s.

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

Risks for The City of Reno

Jeff Jacobs, the company’s CEO, is known for high-risk, high-debt investments. He has publicly stated that the Neon Line development will be the capstone of his career. However, his financial decisions suggest a speculative rather than strategically sustainable approach.

Despite receiving significant concessions from the Reno City Council, JEI has failed to present a concrete development timeline. Hundreds of residents were displaced, and citizen objections were ignored. Jacobs’ political connections, including campaign contributions and advisory roles, have influenced city decision-making. The city has allowed JEI to bypass sign and billboard regulations, leading to legal action from Scenic Nevada.

If JEI fails with the Neon Line vision, Reno will be left with vacant lots and lost tax revenue. The city must exercise caution before approving any further financial benefits for Jacobs.

Given these concerns, further financial support for JEI should be reconsidered by the Reno City Council until the company demonstrates a viable path forward.

Conclusion

JEI should provide transparent development plans and execution strategies and be held to them.

The Reno City Council should seek public input before granting further financial assistance.

JEI must find ways to monetize its vacant lots, even if through discounted sales or joint ventures with developers.

Speak Up, Nevada! What’s on Your Mind? Send us your opinion!

Got the inside scoop on something happening in Nevada? Or the country? Do you have thoughts about life in Nevada that are too good to keep to yourself? Whether it’s a hot take on our politics, crime, education, or even the secret to surviving our summers, we’re all ears! Swing them our way at editor@thenevadaglobe.com. Come on, give us the scoop on what makes Nevada tick—or what ticks you off. Let’s make some noise and have some fun with it!

*************************

Legal Disclaimer

The opinions expressed in this article, authored by Michael Leonard, are solely those of the author and do not reflect the views or positions of Nevada Globe. This content is provided for informational purposes only and has not been endorsed by Nevada Globe. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the content contained on this site for any purpose. Any reliance you place on such information is therefore strictly at your own risk.

Nevada Globe is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the article. No guarantee is given that the information provided in this article is correct, complete, or up-to-date.

Although this article may include links providing direct access to other Internet resources, including websites, Nevada Globe is not responsible for the accuracy or content of information contained in these sites.

Links from Nevada Globe to third-party sites do not constitute an endorsement by Nevada Globe of the parties or their products and services. The appearance on the website of advertisements and product or service information does not constitute an endorsement by Nevada Globe, and Nevada Globe has not investigated the claims made by any advertiser.