The Challenges Ahead For the Siena

by Mike Van Houten / Nov 10, 2010

It was announced in today' RGJ that the new owners plan to turn the Siena into a five-star hotel. Yay?

The Siena right now is in total turn-key condition. With everything down to the last bed sheet still in the building and nothing being liquidated, the new owners of the Siena could in theory have the place operating within a month or two, and that's exactly what Grand Siena LLC told local news outlets earlier this week...their goal is to get the restaurants and hotel up and running while they go through the often-slow process of getting a gaming license.

A few things about the transaction surprised me. I did not expect the three bidders at the auction to be gaming-centric. On the heels of yet another dismal report for Washoe County gaming revenues, one would think gaming, particularly in Washoe County, would be the last thing on an investor's mind. But perhaps acquiring the property and its contents for a mind-blowing $3.9 million makes any business seem feasible. After all, it's a gorgeous property, one of the best looking downtown.

I was surprised when Grand Siena LLC announced they plan on reopening the closed hotel and restaurants ASAP, and would also retain the same name, The Siena. A smart move? Or not-so-smart move? It's definitely a smart move if you are looking to reopen as soon as possible. Rebranding can be expensive and time-consuming. From casino chips to napkins to posters to signs, the cost of simply introducing a new name is astronomical. But I need to point a few things out;

1. The Siena is the best house in the worst neighborhood. The Lakemill Lodge is still there. Joseph's Inn is still there. In the Siena's south-facing rooms, guests have a front row seat to all the 'action' that happens at Lakemill, the Section-8 apartments just south of Lakemill, and Joseph's Inn.
The weed-ridden empty lot and deteriorating diagonal First Street just north of the Siena still exists. The Reno Aces Ballpark and Freight House District are fantastic additions to east downtown, but the Siena has a mere one-block advantage when it comes to walkability over other nearby hotels like Harrah's and Eldorado.
So, perception will be the first challenge for the Siena to overcome. Is it possible to be a five-star hotel being surrounded by one-star motels? Also, let's not forget that when the Siena original opened, it was billed as a five-star luxury hotel with 'one of the best spas on the West Coast'. That positioning didn't work too well for the Siena, and they soon realized their best bet to survive was try to tap into the locals, but as we all know, by then most locals ignored the Siena.

2. Money Money Money. The Siena had over 400 creditors listed in its bankruptcy papers....local businesses Siena owed money to. At various points in its recent 2-year history, The Siena had been operating without paying property taxes, gaming taxes, hotel room taxes, utilities, sewer, mortgage, land lease, casino lease, or their vendors and STILL couldn't make it. The big question is...why? What are the new owners going to do differently?

3. The Real Losers - It may seem like a win-win situation. The Siena sells and will reopen soon, and hundreds of people will be put back to work soon. But I'd like to take a moment to recognize the true losers in this deal...the private investors who trusted Barney and Walter NG, and who saw their retirement and life savings wiped out in the midst of a father-son battle that rivals any plot in Dallas or Dynasty. When the Sienna sold at auction, the private investors of Bar1K/Wild Game/REReno saw their $50,000,000 investment obliterated. The family feud between Barney Ng (Siena Hotel and Casino, Wild Game Ng, One South Lake Street, Five Way, and a couple others entity names) and Walter Ng (Golden Mountain, Bar-K, RE Reno) ultimately cost the Siena, and was a HUGE slap in the face to the tireless employees who tried to make the property work against all odds.

And that brings us to today. Despite all the challenges, there is a strong band of faith in this community and beyond toward the Siena. As a community, we don't want to see closed down buildings and people out of work. We want our city to be successful. While I have reservations about keeping the same name and re-opening the Siena as a full-fledged hotel casino, I share the new owner's passion and strongly believe with the right management and no debt, the Siena can be a success.

I hope the new owners take a long hard look at Siena's history, there are a LOT of lessons to be learned. Oh and plunking down enough money to buy Lakemill Lodge so the owner walks away from his investment would help too.

I always value my readers' thoughts and opinions, so how do you feel about all of this?

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  • November 12, 2010 - 9:37:51 AM

    Mike, it shows there IS confidence in our marketplace, especially downtown. This is really good news. Most gaming analysts ie, Bill Eadington, said the Siena would never sell and sit there dark for years, well he was WRONG wasn't he? It just makes me so angry these people play down Reno when they don't even realize how attractive it is. So in regards to the Siena, these owners aren't Barney Ng or his family, they are smart and sound like they have some experience. They will do a great job and don't think they will stop with just existing facilities, to really make it work, they would pay to clean up some of the blight around it. As a person who is interested in such a business, hotel/casinos, major works will be done to the Siena in the next year. I can't wait, like you, to see what exactly they're going to do but in my mind I see them expanding it, with a parking garage included. Only time will tell but that is my assumption, I wish them the best of luck and will be there when it reopens and will support it to no end. Now, let's get the FITZ REOPENED!! I know Fernando has to be watching what's unfolding with the Siena.

  • November 12, 2010 - 1:37:55 PM

    Mike you hit it on the head with your comments! The Seina was a really nice facility, and I'm happy it sold, against my prediction, so fast! And, so cheaply, in my opinion. I still think it's totally in the wrong place for a gambling venue, as gamblers tend to like to drink and walk to the next casino when the luck runs low. If that hotel was Fitz it would be THE spot, alas, it's so far out off of the main gambling drag, it turns into a destination. Good management and careful marketing will make it work though, I wish the new owners the best and I will patronize the place when the doors re-open.

  • November 12, 2010 - 2:06:22 PM

    I think a big part of making this property successful is their substantially reduced debt load. Initially, trying to make the property profitable while making minimum payments on $50 million can be tough. When making minimum payments on only $3.9 million, you've reduced your biggest expense - by over 90%.

  • November 12, 2010 - 5:24:34 PM

    I think they need to purchase the Joseph Inn and Lakemill Lodge and clean up the area. Also, a parking structure would be helpful since it was part of the original plans. Also, bring back the table games!

  • November 12, 2010 - 5:39:57 PM

    The last time I walked into the Sienna the cigarette stench made me turn around and walk back out. I'd give it a chance, but I have my doubts. As was said, a 5 star place in a one star town.

  • November 13, 2010 - 9:17:11 PM

    Justin nailed it.

  • November 15, 2010 - 9:35:36 AM

    I love the Monday morning quarterbacks and Barney Ng bashing. Has anyone noticed that there were other casinos that closed recently too? Certainly, Barney Ng could have done things better, and in a thriving economy, Siena would have made his investors happy, but let's face reality, the gaming industry in Reno has been cut in half the last two decades. Barney Ng put money in Reno's economy and put food on the table for the casino hotel's employees. You blame a business owner for closing his business but don't thank him for years of signing your pay check??? And as for his poor, poor investors, my heart just bleeds. How about the investors in the large investment banks who were not even told their life's savings were being put in mortgage-backed securities and hedge funds??? Ng's investors knew exactly what they were getting into, a casino business, not a retirement fund, mutual fund, blue chip. A casino business. So before you start crying for these millionaires, how about asking them why after making millions with the Ng's they didn't just put all their money in mutual funds and blue chips and bonds? Uh, because they weren't happy with a few million and wanted to risk more on becoming multi-millionaires? The beauty of Capitalism is risk. Don't cry when people make millions and don't cry when they lose millions, we're all adults here.

  • November 15, 2010 - 10:01:02 AM

    ??? ?Posted by: peterskene - 11/12/2010 5:39:57 PM The last time I walked into the Sienna the cigarette stench made me turn around and walk back out. I'd give it a chance, but I have my doubts. As was said, a 5 star place in a one star town." Reno is far from a one-star town. The Siena is adjacent to one star motels but that hardly defines the city as a whole.

  • November 15, 2010 - 12:24:38 PM

    I think I was pretty tame Blake. :) Compared to other blogs. I don't 'bash' anyone on this site. I simply said the family dynamics between Barney and Walter and the various forms of their entities was the stuff of Dynasty and Dallas, minus shooting JR...which is a 100% accurate conclusion IMO. History helps you understand how to plan for the future. The NG's bought the Holiday for around $2,000,000 if I remember, and invested $20,000,000 initial into renovation, opening it as a '4-Star Hotel', yet it failed so I wondered why. It's a good question to ask. I even remember RGJ's headline...'Upscale Casinos Debuts Amid High Expectations'. I'm very much a grown adult, but I don't come from an investment/financial background, so I guess I take a less cold, calculating approach to addressing people's investment losses. I don't like it when ANYONE loses money.

  • November 15, 2010 - 1:33:57 PM

    Barney was a bad boss. He didn't pay health insurance and then health insurance stopped.

  • November 15, 2010 - 2:20:57 PM

    The original construction price was to be about 25 million. It over ran by some reports of 60-80 million. Maybe someone should have started asking questions then but Barneys choice was to ignore the overruns, continue to move forward and settle any lawsuit that contractors sent him over demanding they finish the work. It was sunk before it began and he didn't have a clue, no matter how many tried to help him. This is not the first time he has failed or hurt a business he inherited from a bad loan.

  • November 16, 2010 - 3:48:49 PM

    Sorry Rory Outside of a few places Reno is a ONE STAR TOWN. In 2007 Nevada passed a law where no smoking was allowed when food was being prepared & served. I liked the Brew Brothers (Eldorado) during the day, But they fought the law and now you can have a cigar with your pizza. You can't less One Star than that. Will the last one out of Reno turn the LIGHTS OFF.

  • November 16, 2010 - 4:56:40 PM

    If you think Reno is a one-star town then you need to stop hanging out in One-Star places, which thankfully, do not outnumber the cool places to hang out downtown. Give me a break.

  • November 16, 2010 - 5:21:26 PM

    So Peterskene, the fact you hang out and eat in casino bars and restaurants shows you one-star tastes to begin with. I suggest getting out and exploring a bit more. A whitewater park, great restaurants, a cute riverwalk, the list goes on and on. All within walking distance of one another? You have zero community pride, probably contribute nothing to this community, and sit there and bitch about your surroundings instead of doing something about it. Why don't you just move? Or are you so pathetic that you are stuck in a place you hate? That would explain your attitude.

  • November 16, 2010 - 6:09:55 PM

    With regards to what Paul W said... I seem to notice a lot of people in Reno on various sites that do nothing but complain about Reno, claim to absolutely hate the city, the location, the people, the weather, anything "Reno", and saying how they wish they were somewhere else but are stuck here. As unemployment has been in the past few months, close to (if not over) 20%, and seeing how other areas have lower unemployment (the San Francisco Bay Area is actually below the national average right now), I'm sure I myself, as well as others who actually love being here and are having trouble finding work, would be more than happy if the Reno haters took this opportunity to go elsewhere and take their whining attitudes with them. It would do a lot to help our unemployment in this region. And please, don't let the door hit you ass on your way out. End rant...

  • November 16, 2010 - 10:07:06 PM

    Play nice folks! No one deserves to be called 'pathetic', even if they rate Reno one star, which I also strongly disagree with. Let's focus on the Siena.

  • November 17, 2010 - 7:40:57 AM

    I think what he was trying to say, albeit in a harsh way, is that...despite the misconceptions many newcomers have...Reno is a blue-collar town, and with the recession is going back to its blue-collar roots. There's nothing wrong with that, but wages are significantly lower here than in the Bay Area, and we are lacking the educated workforce that draws high-paying companies. Sorry, that's the truth and always has been. I have to chuckle reading some of the daydreams posted here, from a Ruth Chris at the Montage to a Grand Sierra thriving with $300,000 hotel condos. The Siena is falling into the trap it started with...there is simply not a big enough market here for a 4-star, high class hotel. Many similar new business owners have found out the hard way, this ain't SF. Sorry, just a reality check from a hometowner.

  • November 18, 2010 - 10:50:59 AM

    I think Steve absolutely nailed it, and I also shared his amazement/amusement when the Ruth's Chris was being talked about, among other downtown project proposals that never were reasonable given Reno's size and number of high income individuals living here.

  • November 19, 2010 - 2:42:06 PM

    The future bodes well for Reno. This "blue collar" image has lasted for decades, but in the future I don't see it around. I have to question the person who said hi paying companies aren't here. Um excuse me? Have you seen Microsoft's or Intuit's offices? Big name companies are here for sure and we aren't some small town anymore like most people think. By 2020, that image will be long gone and we will be preparing to host the 2022 Winter Olympics. As for the Siena? It will come back and re-launch stronger than ever, IT will be the catalyst for a true downtown makeover.

  • November 20, 2010 - 10:59:02 AM

    @ Anakin Marc, I couldn't agree more. I was born and raised in a super small town on the very liberal CA coast and have wanted to live in Reno FOREVER. For one reason or another things hadn't worked out...until now. It looks like my dream may finally come true in early 2011 and I can't wait to be "waking up in Reno." As someone coming from an area that refuses to grow and change with the times, Reno is very exciting for my family and I. At least in Reno we will have many options on things to do and places to go, where as where we're from, there are NO options other than to sit at home. My husband and I feel Reno is a great place to invest in a home and's where the movers and shakers live and we can see a wonderful future ahead for the city of yes, again, I agree and say to all the Reno haters....buh-bye **waiving**

  • November 20, 2010 - 1:44:19 PM

    Someone posted that Reno is "...where the movers and shakers live...." Well, that's a nice thought, but its actually more like where warehouse workers, hotel staffers and cocktail servers live. But that is going to be changing over time, and the natural beauty of the region helps to overcome other factors.

  • November 20, 2010 - 1:58:54 PM

    If you think Reno is only warehouse workers and hotel staffers, then you don't go to enough business networking events. Some of the most innovative companies I have run across started in this area and are still here. One of the top battery research companies in America is here, countless renewable energy companies, biodiesel research facilities, one of the best arid desert research institutes in America. You need to get out a bit more.

  • November 20, 2010 - 8:38:02 PM

    Thank you, Melissa, but maybe you ought to consider the numbers. The local resident workers to whom you refer are statistically insignificant when compared to the larger numbers of hotel-casino employees plus distribution center employees in this area.