Tag Archives: Recession

Lots of Las Vegas Casinos for Sale

If so, maybe now’s your time– IF you have the scratch!  

With Las Vegas continuing to face a stiff economic recession – primarily based on a sharply declining gambling economy where fewer players are wagering less money and staggering, near nation-leading unemployment – it’s significantly reduced a majority of Las Vegas-based company revenues and their ability to refinance their debt.   

Caught up in the financial maelstrom are Station Casinos owners, and brothers, Frank Fertitta III and Lorenzo Fertitta.  Station, which mainly runs casinos targeted toward residents of the Las Vegas area and has been struggling with managing debt ever since it finished going private in November 2007,  are now embarked on a quick mission to sell their 14 casinos in Las Vegas while keeping a minority 46 percent stake in four others. 

Their plan was disclosed last Thursday in a Securities and Exchange Commission filing by the Las Vegas-based casino operator calls for mortgage lenders holding debt to become the new majority owners of the Red Rock Casino Resort Spa, Palace Station, Boulder Station and Sunset Station. Station Casinos Inc. said the outstanding debt secured by the four casinos was $1.8 billion. 

Palace Station and Red Rock are the company’s two largest properties, with more than 1,800 hotel rooms combined. 

Station said the reorganization plan was filed with a federal bankruptcy court in Reno, Nev., where the privately held company’s case was originally filed last July. 

Under the new proposed plan, the Fertitta brothers will pay $85.6 million in cash for a 50 percent stake in the four casinos, and then sell a 4 percent share to Colony Capital LLC. 

The Fertittas would continue to manage the properties under a long-term deal, according to the plan. 

The casinos to be sold include Santa Fe Station, Texas Station, Fiesta casinos in two Las Vegas suburbs, and 50 percent stakes in Green Valley Ranch Resort Spa Casino and Aliante Station, among other properties. Seven of the properties do not have hotel rooms. 

The company said it hopes a judge will approve its plan by this summer so the casino operator can emerge from bankruptcy before the end of the year. 

Marc Falcone, chief financial officer for Fertitta Gaming, said the Fertittas would also try to buy the assets to be sold. 

As would be expected, rivals backed with significant financial resources are entering the Las Vegas casino feeding frenzy, aggressively pursuing the acquisition of the diminished valued assets.

One such rival, Las Vegas-based Boyd Gaming Corporation, reiterated its interest in buying all of Station’s casinos.

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Las Vegas Monorail Faces Bankruptcy

Administrators say the Las Vegas Monorail might seek Chapter 11 bankruptcy protection in an effort to restructure its bond debt. 

Despite handing out extravagant raises for a losing operation, Board member Bruce Woodbury said the company hasn’t raised enough money from fares to pay off the $650 million in construction and startup loans floated to build and start operating the system in July 2004. 

The 3.9-mile system runs on an elevated track linking several large hotel-casinos and the Las Vegas Convention Center east of the Las Vegas Strip. 

And, despite its dismal failure, Woodbury says plans still call for building a whopping $500 million extension to Las Vegas’ McCarran International Airport and other Strip resorts to boost revenues that didn’t happen with original monorail.

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New Store Openings Continue at CityCenter in Las Vegas

CityCenter, the largest $5.8 billion completed construction project in the U.S. this year, continues with gala Las Vegas store openings and special events.  40% of available space is reportedly currently occupied. 

Openings Today, Dec. 3:  

Huge high-class retail Crystals venue opens including Beso (Eva Longoria Parker’s restaurant), Mikimoto, CENTERPiece Gallery, H.Stern, Tom Ford, Marni, Bvlgari, Robert Cavalli, Nanette Lepore, Cartier, Assouline, ILORI, Porsche Design, Tourbillion, Tiffany & Co., de Grisogone, Louis Vutton, Bottega Veneta, Bally, Paul Smith, The Cup, Rodney Lough Jr. Wilderness Collection Gallery, Phillip Plein. 

Opening Dec. 16: 

Aria, the centerpiece 4,004-room hotel casino, opens plus Kiton, Kiki de Montpamasse, Brasserie PUCK, Van Cleef & Arpels, The Pods by Wolfgang Puck, Carolina Herrera, the GALLERY featuring Dale Chihuly, The Art of Richard MacDonald, T.E. Pub 

Opening 2010: 

Mastro’s Ocean Club, Ermengildo Zegna, Emilio Pucci, Prada, Christina Dior, Hermes, Versace, Miu Miu

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Las Vegas Sun Newspaper Continues Staff Bloodletting

On Nov. 11, Las Vegas Backstage Access was one of the first media sources to break the story that Michael J. Kelley, 67, managing editor of Las Vegas Sun since 1997 and in the news biz since 1960, would be retiring from his post this December. 

Well, it’s December and from credible sources we’re hearing that the behind the scenes, camera shy, but dogmatic Kelley is retiring this week.   Timing is everything.

Curiously, though, no news on when or if a pink carpet or anything similar is planned.  But maybe that’s all for the better, what with all the Las Vegas CityCenter opening galas this week attendance would probably be low at the bon voyage happening- and perhaps for another reason… 

What we learned from Valerie’s Miller’s article today in the Review-Journal is that at least 20 Greenspun Media Group (publisher of the Las Vegas Sun) employees occurred yesterday, Dec. 1.

Interestingly, the lion’s share of layoffs were focused mainly on Las Vegas Sun staffers- Kelley’s “people” you might say.  Layoffs reportedly included at least 15 Las Vegas Sun staffers, an In Business Las Vegas editor and reporter, two Las Vegas Weekly staffers, a couple of support personnel and an unknown number of online employees, according to Miller’s sources.  Names of personnel were not provided. 

The reorganization of the continually dessiminated organization and layoffs were announced Tuesday in a statement released by Brian Greenspun, the Greenspun Media Group Chairman, who said his company will “reorganize into a single location, with the goal of fully integrating print and interactive operations.” 

So nicely said by the lawyer-trained kingpin, don’t you think?  What really happens only time – and money – will tell. 

Greenspun, however, who reportedly spends much time outside his Las Vegas office and Nevada, plans to combine the operations and staffs of its daily newspaper, tucked in the folds of the Las Vegas Review-Journal, and the Las Vegas Sun Web site and the tabloid style Las Vegas Weekly, Las VegasWeekly.com, In Business Las Vegas, Las Vegas Magazine, Vegas Magazine and Vegas2Go.  

That’s a tall combo order to trim from an already large media waistline and especially for the publishing industry that is among the hardest hit business segments in our recession– regardless if you’re lucky enough to have won the Pulitzer Prizer, as the Sun did earlier this year.

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Historic Binion’s Hotel in Las Vegas to Close

Another legendary landmark Las Vegas hotel has put up a permanent no vacancy sign. Binion’s announced Monday it will shut down its 365 rooms on Dec. 14. The casino and other operations, though, will reportedly remain open. 

Binion’s officials have said the reason for shutting down the hotel operations was because of the ever slumping economy which has forced room rates to drop and vacancies to rise. 

Even though the casino will stay open, there’s no question the decision will be a blow to a downtown that has struggled — even during the talks of revitalization. 

It’s been a staple on Fremont Street for more than half a century. Word of the closure spread quickly. 

Binion’s original coffee shop and Keno operation will also close, but the entire casino operation — including the Sports Book and the famed poker room which hosted the World Series of Poker from 1970 to 2005 — will stay open. 

But the hotel closure could impact gaming. 

Las Vegas Mayor Oscar Goodman is trying to help Binion’s owners and lenders hammer out a deal to keep the hotel open. He said he does not think this will impact his plan to revitalize downtown. 

“Once you start saying you’re not going to do those things, then you recede. Vegas is a very funny place. We go through these ups and downs. We’ve been here before, perhaps not to this level, but I don’t blame this on Las Vegas. Las Vegas has the infrastructure in place. We’ve got the best hotels, restaurants, shopping and entertainment,” Goodman said. 

Goodman said it’s hard to find investors to come in with fresh money to refurbish rooms, but he’s not giving up.  “We have to keep pushing forward, now more than ever,” Goodman said. 

About 100 people will be laid off when the hotel closes. 

Anyone who has a reservation after Dec. 14 is being referred to Binion’s sister property across the street, The Four Queens. 

Most of the restaurants, including the famed Binion’s Ranch Steakhouse, will remain open.

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Las Vegas’ Rough Road Continues

That potent one-two Las Vegas punch has lost its zing. 

All year long it’s been a hard fought battle, with the bad economy and slashed discretionary spending yielding the crushing blows. 

Adding to the demise, with more than 150,000 hotel rooms and heavily dependent on convention business, the tough times are getting unbearable. 

Fewer people are visiting, let alone spending.  Many casino floors are half-empty during the day. 

Taxi drivers up and down the Strip complain that they wait a long time between pickups. The fares they do get negotiate nearly every rate and no longer tip even minimally. 

Even fewer flights are landing in Las Vegas – US Airways Group Inc. announced last month that it was cutting arrivals in half.  Las Vegas hotels are heavily discounting and are doing anything it takes to lure folks back. 

At the Imperial Palace, rooms are going for $25, $65 on Saturdays. At the Palms Casino Resort, a standard room costs $59, $99 for a studio suite. 

High-end casinos such as Mandalay Bay are offering rooms for about $109.99, with a special two-night-minimum promotion that includes a 50 percent discount on a suite upgrade, a two-for-one House of Blues restaurant voucher, $25 resort credits on food, beverage, or merchandise, and 30 percent off tickets for The Lion King

Las Vegas’ woes are also not a good omen for other casino towns – or tourist destinations in general.  The falloff effect is pronounced and enduring. 

“What happens in Vegas doesn’t stay in Vegas. What happens in Vegas spreads out to all the rest of us,” said Meryl Levitz, president and chief executive officer of the Greater Philadelphia Tourism Marketing Corp. 

“When Las Vegas greatly lowers its rates, consumers don’t think of it as Vegas being Vegas. They think along the lines, ‘Well then, I should be able to get a good deal anywhere.’ ” 

In September, for the first time since May 2008, the number of visitors to Las Vegas went up year over year – 4.3 percent. But the average daily room rate was down nearly 25 percent, to just over $92 a night. Gambling revenue was down 3.6 percent, the 21st straight monthly decline, according to figures released last week by the city’s convention authority.

All the big casino companies are feeling the pinch. Las Vegas Sands Corp., which owns the Venetian and the Palazzo on the Strip, reported a $123 million net loss for the third quarter that ended Sept 30. MGM Mirage, which owns 10 casinos, the most on the Strip, posted a $750.4 million net loss. And Harrah’s Entertainment Inc., which owns eight casinos here, had more than a $1 billion net loss. 

Conventions and meetings, which characteristically drive midweek Las Vegas room occupancy, are way off this year. Attendance is down 27.1 percent compared with the same period in 2008; the number of gatherings is down 18.2 percent. 

About 400 meetings were canceled from late 2008 to May, resulting in $166 million lost in nongaming revenue, so says the Las Vegas Convention and Visitors Authority. 

One reason: restrictions on using federal-bailout funds for certain types of corporate travel, said Rossi Ralenkotter, the authority’s president and CEO. The other: Las Vegas’ reputation as a lavish meeting destination. 

The town’s party-hearty image had to be tweaked, said Billy Vassiliadis, chief executive of R&R Partners Inc., the Las Vegas public relations firm that created the “What happens here, stays here” slogan. Its current campaign features high-level executives hard at work in Vegas. 

“We began delivering a much more sober business message and didn’t talk much about the play side,” Vassiliadis said yesterday. “We were dealing with the perception of whether it would be frivolous to hold a meeting in Vegas. Clearly, after the first quarter of the year, executives needed validation and support to come here for a meeting.” 

During a panel discussion last week at the annual Global Gaming Expo, also known as G2E, Ralenkotter said: “Las Vegas [has] worked hard to ensure that the value of face-to-face meetings was better understood. We have also worked hard to attract new business to Las Vegas and have signed 24 new contracts with [trade] shows that have either never been . . . or have not been here in more than five years.” 

G2E seemed to mirror its host town: more subdued, less boisterous. The event drew an estimated 25,000 gambling executives, regulators, slot manufacturers, and suppliers to discuss industry trends and showcase the latest products – down from 26,500 last year. Registered exhibitors numbered 566, down from 724, and the amount of exhibit space used at the cavernous Las Vegas Convention Center was 258,600 square feet, down from 335,480 in 2008. 

With the supply of convention visitors dwindling, luring back the leisure traveler became a priority, Jacob Oberman, a casino consultant with Los Angeles-based commercial real estate firm CB Richard Ellis Group Inc., said at a recent panel discussion on filling hotel rooms in a down economy. 

“They’re doing this by either giving gaming customers more favorable complimentaries than in the past, increasing their allotment of rooms, and presence with Internet wholesalers such as Expedia, [or] offering creative discount room offers and packages to the general public. 

It appears everyone in Las Vegas, or planning to go there, are cinching their belts a few notches.  It’s not that parites are not happening– it’s just they’re not as lavish or widely participated in as in the past.

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Las Vegas Mothballs $4.8 Billon Echelon Resort

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. Echelon

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.

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