With a growing list of partially finished resort projects dotting the Las Vegas skyline, the shelving of the $4.8 Billion Echelon project joined the ranks of the Strip boneyard late last week.
The Boyd Gaming project, on the site of the formed Stardust, which was imploded in August 2008, plans to remain dormant for three to five years. It’s across the street from the bankrupt and shuttered Fountainbleau, who is still courting suitors, Echelon is located on 87 acres of what was prime real estate. Only an unusuable parkeing garage, unfinished power plant and bare steel-and-concrete remain.
In the meantime, Boyd will spend an estimated $15 million a year to secure and maintain the property that was once destined to be five hotel tower site with 5,000 rooms.
On February 23, in a filing with the Securities and Exchange Commission, Boyd Gaming Corporation, the No. 2 Las Vegas locals casino company, made a $950 million offer to acquire 18 Station Casino properties in Las Vegas.
Boyd Gaming currently operates nine casinos in Las Vegas and Henderson, Nevada.
Boyd is in a favorable financial position having a $2 billion revolving credit line after they halted their $5 billion Echelon resort complex on the Las Vegas Strip last year when their development partners couldn’t get financing.
In the proposed deal, Boyd Gaming would acquire the bulk of their rival’s properties, Station Casinos would retain ownership of the Red Rock Resort, Palace Station, Boulder Station, Sunset Station and 356 acres of undeveloped land they own in the Las Vegas Valley.
Privately held Station Casinos has been in financial trouble for much of the past 12 months and is on the brink of filing for bankruptcy, The company missed a $14.6 million bond payment on Feb. 2 and a $15.5 million bond payment last week. On Feb 3, Station Casinos asked its bondholders to approve a restructuring plan that could allow the company to emerge from a Chapter 11 filing by this summer. Bondholders have until March 2 to vote on the restructuring plan.
Station Casinos bondholders may strongly consider the offer, preferring to have Boyd running the casinos than taking control of the properties in bankruptcy, hoping to retain all the top talent. Lenders don’t want to manage casinos.