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RENO, NV-A joint venture of L3 Development and RAC II LLC has acquired the Fitzgeralds Hotel and Casino for an undisclosed amount. Industry sources believe the entities paid some $25 million for the 351-room hotel, which amounts to $71,225 per key.

Although the parties were not available for comment, in a released statement, it was announced that RAC’s Robert A. Cashell will serve as general manager of the property. L3 Development is led by principals Fernando Leal and Donald R. Wilson Jr. The duo is also converting the former Golden Phoenix Hotel and Casino into The Montage Residences, a 380-unit luxury condominium and commercial development.

Both properties are part of a renaissance taking place in Downtown Reno. “There is incredible excitement surrounding downtown and its future, and we’re planning to position Fitzgeralds as one of the leaders in the renaissance of Downtown Reno,” said Cashell in a letter to the citizens of Reno.

In the letter, Cashell went on to say that the goal of the new ownership is to “transform the entire property into an entertainment destination… we will start immediately with capital improvements… while continuing developing a (site) masterplan.”

The new ownership team plans about $3 million of immediate improvements to the property. That capital outlay includes new elevators, upgrading plumbing systems and refurbishing the 850-space parking garage. Cashell did add that this work will not keep customers from the property, as the work will be done in phases, allowing access to dining, rooms and gaming.

In addition to the plans for the Fitzgeralds, L3 has already committed more than $160 million to its other Downtown project, The Montage Residences. The announcement of these developments comes on the heels of last week’s news that the city council is pushing for a major restoration project that could kick off in 2008.

First on tap would be the acquisition of the Downtown post office and its conversion into mixed-use space, including shops and restaurants. The post office redevelopment has been on the dockets since 1993. As constructed now, the deal would be financed with $5.5 million in city bonds.

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