Joe Downtown: Downtown Project adds Gold Spike to its property holdings; casino to close Sunday

By Joe Schoenmann

Thursday, April 11, 2013 | 4:33 p.m.

The Gold Spike hotel/casino will reopen again but its casino days are over.

It might not even be named the Gold Spike.

The Siegel Group Nevada Inc. announced Thursday the sale of the property to Downtown Project investors, who already held the note to the property. Terms were not disclosed.

Stephen Siegel, Siegel Group president and CEO, said he expected to absorb about 60 percent of the hotel/casino employees; others will get the chance to interview with Downtown Project.

The casino portion of the property will close its doors at 3 p.m. Sunday; the hotel had earlier stopped taking reservations past this weekend.

Zappos CEO Tony Hsieh, one of the investors purchasing the Gold Spike, confirmed Thursday he would not be going into the casino business.

Asked what kind of person gives up a casino, a business known traditionally as an almost sure-fire moneymaker, Hsieh replied: “People who are trying to help build a community.”

He didn’t reveal specific plans for the property, but sources say several ideas for the Gold Spike were being tossed around, including using some or all of the hotel rooms to house Downtown Project visitors, creating a club and/or boutique hotel and specialty retail space.

Siegel said Downtown Project was expected to announce redevelopment plans later this year.

In a news release, Siegel Group said it purchased the property, which includes 112 Gold Spike rooms plus 58 rooms in the adjacent Travel Inn Motel in 2008. Siegel was one of the first investors in the redevelopment of the eastern portion of Fremont Street. After buying the place, he gutted rooms and refurbished the entire structure, the release said, turning it into “a hip boutique hotel-casino that sought to attract a younger demographic that the company believed would eventually migrate to the area.”

The migration didn’t happen right away, however, as the recession took hold that year. With the ongoing investment of Hsieh and partners in downtown, that migration has only just begun.

"We saw early on the redevelopment potential that Downtown Las Vegas had to offer and are proud to have been an integral part of transforming this great area,” Siegel said. “We will remain active in the downtown market, where we have a number of other holdings and intend to continue investing in the area with other projects we will be announcing in the near future."

Siegel said he also kept the legal right to the name “Gold Spike.”

Joe Schoenmann doesn’t just cover downtown, he lives and works there. Schoenmann is Greenspun Media Group’s embedded downtown journalist, working from an office in the Emergency Arts building.