Photo By Dennis Myers Workers have been putting the former Silver Club building in shape inside and out. For four years, the casino and an adjoining hotel have been used mostly for fire and police training exercises.

As January 10 turned to January 11 in 2009, more than 200 workers at the Silver Club in Sparks were out of work.

When the casino shut down at midnight, workers gathered in a bar with a stage and partied (see photo, facing page). The Dan Bauer Band kept playing for them. It was a melancholy event. The Silver Club had held out for more than two years into the recession, but finally gave up the ghost, a significant setback for downtown Sparks.

For four and a half years, the building has sat there dark, the kind of thing that any city’s leaders hate to see in the downtown. So the news that an Elko-based company would reopen the Silver Club building as the Bourbon Street Casino [parent company: Northern Star Casinos] was an enormous relief to them. City officials quickly licensed it with a list of conditions, and the corporation said it was aiming for an August 1 opening. Last week, several job fairs were held at which a hundred prospective workers signed on.

Across the street from the reopened casino, of course, is the Nugget, which has had its own troubles—reduced workforce, cuts in employee perquisites—but has stayed in business. Some Nugget workers have expressed apprehension about what the new competition will mean.

Retired casino executive Phil Bryan, who has managed casinos in both northern and southern Nevada and in Colorado, said the new club may be competition for the Nugget, but that doesn’t mean it will necessarily hurt the Nugget. In fact, it may well help.

“I think that’ll provide more of what one great casino operator I knew used to call ’Building the bonfire.’ And the idea is that if you create a hub of business, that attracts more people because they have more alternatives to see,” Bryan said. “That’s a sort of an old, old school of thought, but I think it’s still an effective idea. We’ve seen that happen in downtown Las Vegas recently. They started offering more attractions, another came in and bought a couple of places. … My opinion is that it’ll probably bring more people to downtown Sparks. It’ll start to build interest in downtown Sparks.”

He said the reopening of the Silver Club property will also make special events in the downtown better. Sparks has a lot of special events, like the Nugget Chili Cook-Off, weekly farmers’ markets during summer, a holiday parade in winter.

“Well, having more commercial places to go to should help [special events],” Bryan said.

Moreover, the former Silver Club Hotel is not reopening along with the casino, so the Nugget could well benefit from housing some Bourbon Street customers.

The flip side

But it’s possible to read too much into developments like this, which happen all the time. A casino reopening or a month’s improvement in sales or gambling taxes are often treated as significant.

Nevada casinos are “not doing very well at all,” said economist Thomas Cargill. “Northern Nevada is not doing well. Las Vegas is a unique place, but it’s still struggling.”

Photo By Dennis Myers After midnight on January 11, 2009, minutes after losing their jobs, Silver Club workers danced on the top of a bar in the club.

Cargill said an additional casino in downtown Sparks is fine as far as it goes.

“Sparks has done a very nice job of building a visitor-friendly atmosphere,” he said, and every bit helps.

But he also said some clubs have been reopened for a reason that does not speak well of the health of the economy—their value fell so far that they could be opened again for a song. That doesn’t indicate a robust recovery.

“The value of these properties, commercial properties, has fallen so far that it makes sense to invest in them because you’re not investing much,” he said. “You buy the property cheap right now and the wages are low and you might be able to establish a market.”

He pointed to the purchase of the Reno Siena hotel casino for $3.9 million in November 2010.

“That’s chump change,” he said.

Nevada is recovering economically, he said, but still has major and momentous problems.

“The discouraged worker effect is very large,” he said. “It’s up somewhere around 14 percent.”

Discouraged workers are those who have looked for work for a long time, finally giving up hope. And once they exhaust their jobless benefits, government stops counting them as a part of the unemployment rate.

“People are working 30 hours when they want to work 40, working two part-time jobs when they want one full-time job,” Cargill said. “There’s still a lot wrong with the state’s economy. … It’s ’recovery,’ but I would put quotes around it.”

He expects it to take four or five years for the national recovery to bring unemployment down to a normal rate, and even longer in Nevada—“probably longer because Nevada is the nation’s basket case for real estate. A tremendous amount of wealth was destroyed.”

Gambling and construction were, until the recession, the engines on which Nevada has thrived since the end of the Second World War.

“Yes, there are signs of recovery, but recovery is moving out of a trough,” he said of Nevada’s problems. “We are still a long way away from being a functioning economy. Anybody who thinks housing is going to recover soon is going to be wildly disappointed.”

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Dennis Myers

Dennis Myers was the news editor of the Reno News & Review. He was a journalist for more than four decades. In 1987-88 he was chief deputy secretary of state of Nevada. He was coauthor of Uniquely...