Casino claims its expansion went overboard

Ellis Island hotel-casino owners allege in a lawsuit that the construction company hired for its expansion went too far by expanding the property too much, causing it to encroach into adjoining property.

Fame Operating Co. Inc. and Gary Ellis Enterprises Inc. sued Grove Inc. in Clark County District Court on Monday, seeking to have a lien lifted that Grove had filed alleging it was due money from the project. A claim in the suit alleges Grove installed equipment and an unnamed "structure" on property adjoining Ellis Island.

Ellis alleges the owners of that property are demanding either removal of the equipment and structure or a fee for an easement.

Grove Inc. President Gilbert Grove had not seen the suit Tuesday and had no comment.

The lien filed by Grove stems from a dispute over the amount the construction company says it is owed. Ellis' complaint calls the lien "frivolous."

Ellis Island hired Grove to expand and remodel its casino and to build a five-story, 300-vehicle parking lot at a guaranteed maximum price of $3.8 million.

However, the lien filed by Grove last January claims the cost of the work was $4 million and that about $3.4 million has been paid, leaving a balance of $579,000.

"The lien constitutes a cloud on the Ellis Island property. Unless the defendant's lien is canceled of record, plaintiff, Gary E. Ellis Enterprises Inc., will not have good and marketable title to its real property," the suit states.

Ellis further maintains that the lien has caused problems with its lender, Nevada State Bank. Ellis Island received a two-part $7 million loan, a construction loan and a long-term loan.

After construction was completed and paid for, the construction loan was to be converted to the long-term loan.

The bank has refused to convert the loan and has demanded full payment of the construction loan, partly because of the lien, according to the suit.

When announced last September, the expansion was to add 150 slot machines and six blackjack tables to the casino on Koval Lane.

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