Reno and the Flood That Swept Away an Era

Just one week into 2017 and Reno was on flood alert. On January 8th the Truckee River reached 14.7 feet and in some areas overflowed its banks.  If you have never watched a raging river, it is a terrifying sight.  Filled with debris, dark, ominous and powerful; nothing in its path is safe.  However, this year Reno dodged the bullet.  Within a day, the weather had improved, the sun was shining and the river receded.  There was some damage, although it was relatively minor.  For Reno, it was a close call.

The 2017 flood was just one of a long series of floods in Reno.  The Truckee River which runs through the heart of the downtown has overflowed its banks eleven times in the last 110 years.  The cause is always the same, record levels of snow followed by rising temperatures and rain.  The rain and the melting snow find their way into the Truckee and speed downstream through Reno and Sparks to Pyramid Lake.  Most of the time, the Truckee is a small, tame river, more a stream than a proper river.  In dry years, there is barely a trickle of water still moving by late summer.  But during one of those unusual runoffs, the water level rises and the river is anything but tame. Twelve feet of water is flood level. The channel is not deep enough, nor is it wide enough to contain that much water.  The excess goes into the streets and neighborhoods of Reno and further downstream in Sparks.

The Truckee peaked at 15 feet in 1955 and the damage was major, but it would have been much worse if the population had been as numerous as today.  In all of those previous floods Reno was only a small town; in 1907 less than 10,000 people lived here and even in 1955 the population was less than 40,000.  The greater metro area is now close to 400,000. Not everyone is in the flood plain, but there are a sufficient number of houses and business in the plain to create serious social and economic problems during a flood.  The year when the water and population reached a critical mass was 1997; although that year did not have as much water as in 1955, the damage was greater and for the casino industry it was the end of an era.

The flood of 1997 started New Year’s Eve and by next day, the streets of Reno were flooded.  The Truckee River moved out of its channel as much as a full city block, in some places nearly two blocks.  The businesses in that zone all closed, including three casinos.  For nearly a week the owners and managers of the businesses along the river filled and stacked sandbags, fighting to save their livelihood.  My ex-wife was one of those fighting the river.  I remember how exhausted she was after 10 or 12 hours manning the barricades.  But the next she was right back in the battle.  In the aftermath of those difficult days, the whole city assessed the situation, city officials and private business people worked together to create plans to prevent a reoccurrence.  The river channel was improved, the banks strengthened and a new bridge installed to allow for a free flow of 15 feet and more of water; with those changes Reno was better prepared for floods.  Nothing can protect the city completely.  After that flood and for the first time in the city’s history the community came together and made the changes necessary to cope with future floods.  For Reno the improvements worked; the flood in 2017 illustrates the success of their efforts.

But for the casinos that were forced to close during the flood, the results were very different.  When the owners assessed the situation, they realized their businesses were no longer viable.  Indian gaming had been eroding all possibility of profit for seven years, but it took the flood to make them realize the hopelessness of the situation.   The larger casinos had been able to withstand the competition, but the smaller ones simply could not adjust.  Operating a small casino in Reno was never easy; the industry in Reno is just too seasonal.  Traditionally, each year beginning in November tourists abandoned Reno casinos and did not return before spring; casino cash flow was insufficient to meet expenses.  Every casino reduced payroll as much as possible, cut every other expense that could be cut and put vendors on a 60, 90 or in the extreme 120-day payment schedules.  Even with those drastic measures it was still necessary to borrow money to get through the winter.  Business picked up every year in March; the casinos used the increased cash flow to pay off the winter loans and then save as much as possible for the coming winter.  It was a never-ending cycle and never fun.

The Riverboat was one of the casinos forced to close during the flood.  After the waters receded and the casino had reopened, one of the owners was discussing his plans for the year with his attorney. He explained to the lawyer the cyclical financial difficulties he faced every year as well as what he hoped to achieve that year.  The lawyer asked a simple question: “What is ever going to change that cycle?”  At that moment, the Riverboat owner realized it was time to throw in the towel.  The rewards just did not justify the efforts.  Many things have changed since 1997, but the seasons still come and go.  Tourism drops by as much as 50 percent between the middle of October to the week before Christmas and only improves slightly in January and February.  For the larger casinos, it is still a difficult time, but not enough to close their doors.  Those casinos that without sufficient cash flow to upgrade their properties and withstand the winters closed.   The final nail in the coffin for the small casinos in the downtown district was the flood of 1997.

Twenty years later, when the flood of 2017 came there were no casinos in its path.  This year the city was ready for the flood and for that we have the 1997 flood to thank.  But Reno has other things to be thankful for in 2017, first and foremost is the changing economy.  Reno is becoming a technology center and because of Tesla and the other technology companies that have moved to Reno, the economy is healthy and expanding.  There are fewer casinos, but the remaining casino industry is much healthier than it was twenty years ago.   The flood of 1997 swept away the era of small mom and pop casinos, which for sixty years had thrived in a two block area near the Truckee River.  Now, the casino industry in Reno is corporate; the casinos are hotel-resorts that are scattered around the valley a long way from the river.  And thus, the flood of 2017 barely made a ripple in the world of Reno’s casinos.


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