Owners of the Ormsby House on Carson Street said Friday they plan to cut their losses and demolish the former hotel and casino.
The Carson City Building Department received an application for a permit for a complete building demolition of the property Friday afternoon along with site plans by Metcalf Builders, the project contractor.
Owner Don Lehr said he and his partner Allan Fiegehen decided earlier this week to take the building down. They have poured $8 million into gutting and renovating the building and face spending another $1 million to tear it down, but are frustrated with city codes and red tape, he said.
"It's kind of like if you bought a stock and it goes down. You're smart if you just sell it and cut your losses," Lehr said. "We're cutting our losses."
Owners of Cubix, a Carson City computer equipment and software manufacturing company, Lehr and Fiegehen don't know what they will do with the property after the demolition. The Winchester Club, a 5,000-square-foot bar and gaming establishment in the parking garage west of the Ormsby House, was opened by the partners earlier this year.
Closed in October 2000, the 10-story landmark hotel-casino was expected to undergo a nine-month, $10 million to $13 million overhaul to convert the building into a five-star establishment.
But workers encountered one problem after another since starting work, 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. "The codes and the way they write them only apply to new buildings. They drive you absolutely nuts with this stuff."
Many city officials and managers Lehr has talked with have been helpful but the owners are frustrated with the details imposed by city staff, he said.
Supervisor Pete Livermore expressed surprise at the news.
"They just put up the scaffolding in the last couple of days," Livermore said from Ely. "I thought we were working well and (Lehr) was well on his way to doing what he promised the community. I hope he has not run into difficulties."
Livermore said the Ormsby House would be missed in Carson City.
"I'd hate to think that we would not have any hotel of that magnitude in Carson City," he said.
City supervisor Richard Staub said he doesn't think the Ormsby House will be demolished.
"I'm pretty close to the contractor and I can't believe that I've never heard anything about it," he said. "I can't imagine they've put those kind of improvements into a building that you're going to tear to the ground."
Supervisor Shelly Aldean was incredulous when she heard the news.
"I'm stunned," she said. "My fear is that we will have another vacant lot on Main Street. It astounds me that it would make financial sense to tear the building down."
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.
Problems with water, landscaping, sewer connections and complications with the tear down of an adjacent property, the Capital Motel, caused the owners to throw in the towel, Lehr said.
"We really would like to see the problems solved in this city. We want to see anyone who wants to do a remodel in the city can do it quickly and easily," Lehr said.
Built in 1972 by the Laxalt family, the Ormsby House was owned by Woody Loftin for10 years. Bankruptcy closed the establishment from January 1993 to February 1995, and a second bankruptcy followed in February 1997. Fiegehen and Lehr bought the property in September 1999.
Ormsby House timeline
1972 -- Built by the Laxalt family
1976 -- Bought by Woody Loftin
January 1993 -- Closed for bankruptcy
February 1995 -- Reopens under Barry Silverton
February 1997 -- Second bankruptcy
September 1997 -- Bob Cashell becomes general manager
September 1999 -- Cubix owners buy Ormsby House
October 2000 -- Closed for renovation
