Reno’s Grand Sierra Resort hotel-casino kicked off the biggest expansion in the property’s history as it officially broke ground on its $1 billion arena project. The idea for a billion-dollar improvement of the GSR seemed so far-fetched, owner Alex Meruelo joked that he was afraid his own wife would think he was crazy after he told her about his plan.

“I’ve heard it before, all the things we hear all the time,” the Meruelo Group founder said. “But I said, no, no, no, I mean it.”

The groundbreaking, which was held at the GSR’s northwest parking lot on Tuesday, Sept. 30, has been a long time coming, said Christopher Abraham, chief marketing officer for the hotel-casino.

It was about four years ago when discussions for a major expansion project at the GSR first started, according to Abraham. 

Since then, the plans have undergone many changes. Even after the project was officially announced in September 2023 and released, revisions continued to be made with its plans, including the location of the arena. 

Originally planned to be built at the south side of the GSR, the arena was moved after those behind the project realized how much pressure that would put on the front desk and other hotel services on that side of the property, according to Abraham.

Today, the latest renderings show the 10,000-seat arena on the northwest side of the GSR. The planned parking garage was also moved to provide people direct access to the arena without having to go outdoors or traverse the entire property, according to Abraham.

Other confirmed amenities for the project include a community ice rink, a new hotel tower, a three-story facility for the Grand Bay golf driving range, and new workforce housing. The plans encompass the entire property and will be done in two major phases, Abraham added.

“It took us a long time to get to a point where we felt comfortable that everything was going to be designed in the right place for the ultimate guest experience,” Abraham said. “So just a myriad of different scenarios were contemplated until we finally settled on the one we are today.”

GSR is looking at late 2027 as the target date for first phase of $1 billion project The $1 billion GSR arena project further raises the stakes on the property for owner Meruelo. The billionaire acquired the struggling property in 2011 for $42 million.

Since then, Meruelo has invested about $400 million to get the GSR where it is today, Abraham said.

The arena project represents an even bigger investment. The arena and community ice center alone will cost about $430 million, according to Abraham.

A construction permit filed by GSR with the city of Reno on June 30 indicated that the first phase of the project — which includes a 2,400-spot parking garage and an aqua golf driving range — will cost $786 million. The GSR is eyeing a September 2027 completion date for the first phase.

Abraham also confirmed that the second phase will include the new hotel tower, the workforce housing project, and improvements to the GSR lake, including a walking path and a potential water show. 

Details for the second phase, including the water show, still need to be nailed down. The GSR arena project has also faced its share of controversy.

In May, the Reno redevelopment agency approved tax increment financing, also known as TIF, for the GSR arena project in a 5-2 vote. Tax-increment financing redirects future increases in tax revenue back to private developers to help fund projects. Such projects must be built in designated redevelopment areas suffering from blight, according to Nevada law.

Under the TIF deal, GSR will be reimbursed 90% of its property tax while the redevelopment agency will keep the remaining 10%. The amount equates to about $61.3 million for GSR and $6.8 million for the redevelopment agency until the agreement sunsets in 2035.

While TIF supporters tout it as a way to revitalize communities through cooperation between private entities and the public sector, critics view it as siphoning public funds for private use.

Meruelo described the TIF agreement as a fair deal between GSR and the city of Reno. One of the compromises was giving back more to the city from the TIF deal.

According to Meruelo, the city has property near the GSR where they wanted to create more facilities for youth soccer and have a place for the kids to play. Meruelo agreed because such places were “desperately needed in the city,” he said.

‘Everyone has the opportunity to invest in their properties’

According to Abraham, what GSR committed to was not using any funding from the University of Nevada, Reno.

In addition to hosting live events and entertainment, the GSR arena will also be the new home of the Nevada Wolf Pack men’s basketball team once completed.

“We want to make the university whole as they relocate their basketball experience from Lawlor (Events Center) to this new arena,” Abraham said. “We didn’t want it to cost them anything to be able to do that.”

UNR was publicly acknowledged as a partner for the project during the 2023 announcement, with UNR President Brian Sandoval making an appearance. Sandoval was present once again during the groundbreaking and confirmed UNR’s support of the project once more. 

The arena would help the university not just with recruitment and retention but also in generating more revenue, according to Sandoval. Besides the university, one of the biggest beneficiaries of the project would be the community, he added.

“I think this community should be really excited about the fact that we’re going to have first-class sporting experiences, concerts, presentations, and it’s happening right here … where we’re standing.”

The use of TIF financing for the project was also opposed by several competing hotel-casinos in the Reno-Sparks area.

Back in March, a coalition of casinos in the Reno-Sparks area sent a letter to the Reno City Council opposing the use of TIF funding for the GSR arena project. The coalition included the Atlantis, Peppermill, Nugget and Caesars Entertainment — which owns the Eldorado, Silver Legacy and Circus Circus.

Supporters of the project countered that the GSR arena project was a valid revitalization effort for the surrounding neighborhood.

In an editorial that ran in the Reno Gazette Journal, Frederick Steinmann, director of the University Center for Economic Development at UNR, noted that other hotel-casinos have benefited from TIF-supported projects such as Eldorado’s parking lot redevelopment. Downtown casinos also gained from TIF-funded facilities such as the Reno Ballroom, Downtown Events Center and National Bowling Stadium.

“Gaming giants like Circus Circus, Eldorado, and Silver Legacy benefited from these attractions and TIF-supported expansions,” Steinmann wrote. “Since 1983, TIF has bolstered the tourism and hospitality sectors by funding downtown Reno projects designed to attract visitors,” Steinmann added.

GSR’s Abraham responded to the opposition from other hotel-casinos by saying the project will help them as well. When the arena brings in events such as live entertainment or sports tournaments that fill its 10,000 capacity, for example, the GSR alone won’t be able to cover the demand for hotel rooms. 

Other hotel-casinos also have access to the same opportunities available the GSR, Abraham added. “Everyone has the opportunity to invest in their properties,” Abraham said. “The destination is going to get better the more we invest in the product and the experience so we hope everyone takes the opportunity to do that.”