The Elvis-themed resort planned for the Las Vegas Strip may not become a reality. A group of investors who had planned to build the resort on the 18 acres across from CityCenter could be forced to sell their property because of a default on a $475 million mortgage loan.
New York-based FX Real Estate and Entertainment said its lenders informed the company on April 9 of the bank’s intention to sell the land “to satisfy the principal amount…owed to them under the mortgage loan and secured by the property.”
FX said it would not be able to resolve the default issue by the May 18 deadline and “is considering all legal options, including bankruptcy proceedings” to prevent the sale of the property.
Some fortunate Las Vegas entertainers live on in their death and later become business entities because of their larger than life charismatic persona- or at least we thought so, that is until our current economic financial crisis has imbedded its nasty fangs into virtually every sinew of Las Vegas business life.
FX Real Estate and Entertainment had a dream that started back in 1998 to build an 18-acre Elvis-themed resort on land they purchased in six separate transactions that occurred through 2005. It was to be built across from the CityCenter project that is now under construction and would stretch from where rental properties stand now, from the Harley-Davidson Café on the corner of Harmon Avenue to the Smith & Wollensky building just north of the MGM Grand.
Back then the business concept sounded great to Robert F.X. Sillerman, whose publicly traded company CKX, Inc. owns the name and image of Elvis Presley. The idea was also well received by Graceland hotel developer Paul Kanavos and residential and commercial developer Brett Torino.
But their lofty dreams and plans were largely dashed back in September when FX noted the all too familiar “dislocation and turbulence in the capital markets.” They have now defaulted on their $475 million loan from Credit Suisse and are on the verge of losing the land – and their dream – through foreclosure.
Yesterday FX, which is publicly traded on the NASDAQ, had a 10 cents per share close, a fall from their January 10 offering-day high of $10.02 per share.