Lake Tahoe Hard Rock sues ex-management firm
Lake Tahoe Hard Rock owners are seeking damages against the former management team. Photo/LTN file
By Kathryn Reed
The Park brothers are going after the former management company of Lake Tahoe Hard Rock for damages, contending Warner Hospitality is responsible for cost overruns at the remodeled Stateline property and mismanagement.
“In particular, Warner has failed to manage the property properly, resulting in customer dissatisfaction, bad publicity, employee turnover, and revenue well below Warner’s projections,” a complaint filed Oct. 15 says. “Warner has acted with gross negligence and committed willful misconduct in connection with its management of the property.”
The complaint was filed in Washoe County District Court. Neva One is the company David and Jon Park formed to operate the Hard Rock. They had planned to spend $60 million to renovate what was the old Horizon hotel-casino, which open as the Hard Rock in late January.
The Park brothers last week fired Warner Hospitality and turned management over to two veteran gaming consultants. This came after SMC Contracting filed a lawsuit seeking millions of dollars in cost overruns that were not paid, the pool had to be closed because of a leak, and employees were either being fired or driven off because of what they said was Warner’s fault.
SMC and Neva One will be back in court Oct. 26 for a hearing. A settlement has not been reached, but talks are ongoing. Mike Springer, attorney for SMC, has not returned multiple calls. SMC claims it is owed nearly $19 million – about double the original contract.
SMC was hired to do the casino floor work.
The lawsuit goes on to say, “Warner failed to properly manage and oversee the completion of the hotel towers of the property, with floors still incomplete.”
The lawsuit says Warner was to oversee the design, construction and opening. Any expenses that were more than $10,000 beyond the original price or had a cumulative total in excess of $200,000 were to be approved by Neva One, according to the lawsuit. This reportedly didn’t happen, which is how SMC wound up not getting paid what it claims it is due.
“We are taking all actions that we consider appropriate to strengthen the property,” David Park said in a statement. “We believe the changes at the Hard Rock Hotel & Casino Lake Tahoe will help us be in a better position to resolve issues that came about during the renovation project. We are eager to move forward in a positive direction for the property, our valuable employees and the community.”
Let’s hope the bad reputation that the Hard Rock has earned during its initial tenure here follows Warner Hospitality back to Las Vegas. What a mess.
All well & good now but where the heck were the owners this past year? If it were my $60M hotel I’d be there all the time looking over their shoulders.
Mel the property has only been open for a little over 8 months, and since they had a binding contract with warner(which none of us knows how much input they were or werent allow). I am sure they needed to have enough rope to hang them(or evidence). They both seem to be nice guys hooked into the wrong management company.
I’m with you Mel…. The “noise” about poor management and unhappy employees has been going on for quite awhile!
Everyone that has tried to pound the Vegas square peg into the Tahoe round hole has failed. I’m surprised the Parks thought it would work. At least for the sake of their employees and guests they are moving forward now.
Oh My.
More lawsuits which will not result in justice or the identification of the guilty, only wealthier lawyers.
It is true…”You cannot cure stupid”.
The belief that “I have money so I must be smart” demolishes a lot of dreams.
Inherited wealth does not come with the experience to spend it wisely, nor, apparently, the knowledge to understand this in the first place.
I think the Park brothers must be remarkably naive and failed to secure the right advisers at the outset.
In retrospect it seems like the key employees they missed were a decent contract lawyer and a diligent contract administrator
And where is the music? Follow CBC’S business model and include more lodging. Cater more to locals.
Horizon with a (crappy) paint job. Doomed from the start.
is there a contact email or mailing address for the Parks or a rep that works for or with the Parks?
The working definition of ‘experience’ (which some did not have enough of. . .):
“That’s what you get when you find out what doesn’t work…”
Not sure what the criteria was for getting a management contract in the first place, but it is now obvious that neither did those in charge. . .$ 60,000,000 indeed. . .
This unraveling scenario was intimated in the columns I wrote
. . .