In a move that stunned city officials, the owners of the Ormsby House have announced plans to demolish the landmark hotel-casino built by the Laxalt family in 1972.
The Carson City Building Department received an application for a demolition permit Friday from owners Don Lehr and Allan Fiegehen.
Despite spending $8 million to gut and renovate Carson City's largest hotel-casino over the last three years, the owners say they now want to demolish it because of frustration over city codes and red tape.
"It's kind of like if you bought a stock and it goes down," Lehr told the Nevada Appeal. "You're smart if you just sell it and cut your losses. We're cutting our losses."
Mayor Ray Masayko declined to speculate whether he thinks the owners are bluffing to gain concessions from the city. He plans to talk with the owners.
"Let me find out what caused this and then we'll take another step," he said Saturday. "It's far from being demolished.
"The Ormsby House helps put Carson City on the tourism and gaming map. We're not just going to stand still and say, `Oh, well,'" Masayko added.
Supervisor Richard Staub said he doesn't think the building will be torn down.
"I can't imagine they've put those kind of improvements into a building that you're going to tear to the ground," Staub said.
The owners did not return phone messages seeking comment Saturday.
Lehr and Fiegehen were were unsure what they would do with the prime property located on Carson City's main drag after the demolition.
The Winchester Club, a small casino, was opened by the two earlier this year in one corner of the hotel-casino's parking garage.
Closed in fall 2000, the 10-story Ormsby House was expected to undergo a nine-month, $10 million overhaul to convert it into a five-star resort.
But workers have encountered one problem after another, causing several delays.
"We've been telling the city right along that the problem is we need somebody to understand when you remodel a building of this magnitude, the city cannot keep throwing obstacles in the way," Lehr said. "They drive you absolutely nuts with this stuff."
City officials expressed surprise over the demolition plans.
"I'm stunned. It astounds me that it would make financial sense to tear the building down," Supervisor Shelly Aldean said.
But Aldean, whose company has renovated several historic structures, said she could understand the difficulties in modifying a building like the Ormsby House.
"Sometimes it is more cost effective to tear a building down," she said.
Lehr said problems with water, landscaping and sewer connections caused the owners to throw in the towel.
"We really would like to see the problems solved in this city," he said. "We want to see anyone who wants to do a remodel in the city (to be able to) do it quickly and easily."
The resort has undergone a string of closures, bankruptcies and ownership changes since it was built in 1972 by the Laxalt family, including Paul Laxalt, a former governor and U.S. senator from Carson City.
Laxalt, who served in the Senate from 1975 to 1987, was one of former President Ronald Reagan's closest advisers.