LAS VEGAS (AP) - Six months after acquiring the Gold Spike casino in downtown Las Vegas, Miami developer Gregg Covin has sold the property to new investors for $21 million.
Covin bought the smoke-filled property - known for selling tequila shots and cans of Mexican beer for $1 - for $15.6 million with the intention of turning it into a trendy, boutique hotel.
Instead, he wound up selling the Spike to Stephen Siegel and John Tippins of Las Vegas, businessmen who in August spent $5 million to buy the adjacent and shuttered Travel Inn.
Covin, 38, said he considered a joint venture with the men but they had a different vision for the site at Las Vegas Boulevard and Ogden Avenue.
"I really wanted to develop the Gold Spike, but to do it right you really need to have the Travel Inn next door," he said. "(Siegel) and I had a different vision."
Siegel and Tippins said they plan to keep the Gold Spike open while they renovate the rooms and, sometime this summer, upgrade the casino floor.
They also plan to reopen the Travel Inn and connect it to the Gold Spike to provide more rooms and amenities, if Nevada gambling regulators sign off on connecting a casino to a property that doesn't now have gambling.
The pair said they had an eye on the Spike last summer, when Covin swooped in and bought it from Tamares Las Vegas Properties, owners of the Plaza, Las Vegas Club and Western casinos downtown.
"Somehow he moved in and got it from us," Siegel said of Covin. "We had to do what we had to do to buy it." As for Covin, "he made out great," Siegel added.
The casino is the first gambling business for Siegel and Tippins.
Siegel is founder of the California-based Siegel Group. He's made money in recent years buying dilapidated Las Vegas extended-stay apartments, renovating the properties and making them more attractive for law-abiding, but rootless, tenants.
"Our main tenant would be the construction worker who comes to town, a lot of the casino workers," said Michael Crandall, the Siegel Group's business affairs director. "We take pride in not only cleaning up the building but also cleaning up the neighborhood."
So far they've developed 2,500 units in 13 Siegel Suites properties in Nevada, 11 in Las Vegas and one each in Reno and Mesquite.
At the Gold Spike Siegel and Tippins will face a bedraggled property that enjoyed its best days in the past.
After Tamares took over the joint once owned by renowned Las Vegas operator Jackie Gaughan, the Spike devolved from a place for
cheap fun downtown to a dark and depressing dive.
The removal of table games and the property's subsequent decline sapped the charm from the Gold Spike, leaving it a shell of its former self, said Matt Weatherford, operator of the Web site www.CheapoVegas.com.
"A table game legitimizes a place. It makes it feel like a casino," Weatherford says. "We'll go back to the Gold Spike if they can make it what it was."
Tippins said that's the plan. He and Siegel plan to bring back table games once a contract with Navegante Group, the current casino management company, expires in July.
"We want to make it fun again," Tippins said. "We want to make it loud inside."
(Copyright 2008 by The Associated Press. All Rights Reserved.)