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who built the hotels?

Discussion in 'Casino Industry & Development' started by addicted, Jun 22, 2012.

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  1. Nevyn

    Nevyn VIP Whale

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    I don't want to oversimplify this as each casino probably has a very different reason why it was sold.

    But one thing you need to remember is that no one builds a casino hotel by spending their own money directly. They finance the project by borrowing. And once the place opens, they need to pay off that debt.

    So even if you take in more than you spend as a casino, you are in a hole unless you can pay down that debt, too. And if the cost of borrowing suddenly spikes, you can end up in trouble.

    If you're a bigger company buying an existing one, though, first you have a broader revenue base to be able to handle that debt. Second, if the place you are buying is either bankrupt, or otherwise in bad shape paying off its debt, you can often buy it for less than it cost to build.

    And even the big boys can have debt issues. MGM really had to stretch for CityCenter, including changing some original plans. Echelon got put on hold because borrowing would cost too much.
     
  2. addicted

    addicted High-Roller

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    I read something about that. Also didn't dubai stop making payments at one point? (It is my understanding mgm and dubai world were 50/50 on citycenter)
    And what happened after that? (did dubai start paying again, bail out altogether??)




    Hilarious:beer:
     
  3. shifter

    shifter Degenerate Gambler

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    as much as that might make sense since they own everything around it, i can't see it happening any time soon. they are cutting expenses nonstop because of all their existing debt. i don't see the management extending more debt to purchase another completely underwater casino. unless DB is willing to take a huge, huge loss and sell at a complete firesale price, i just don't see it happening.
     
  4. JillyFromPhilly

    JillyFromPhilly Tourist

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    Call me crazy, but I think if anybody's going to buy Cosmo, it's going to be Boyd - think about it - they're [at least marginally] profitable, but still lacking a strip property - so what makes more sense - spending billions & several years finishing Echelon, or just buying Cosmo if they can get it at a decent price?

    I believe Echelon was originally budgeted at $4.8 billion, so figure even a reduced scale Echelon would probably cost them as much or more than it would to just buy Cosmo - and just buying Cosmo gives them an arguably better location than the no man's land that is the north strip too - so why wait years to finish building a property in an area that will take even longer to finish being redeveloped when they could get a top-tier property in the heart of the strip that would be ready the day they sign the papers?
     
  5. Nevyn

    Nevyn VIP Whale

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    Article about the dubai thing

    Basically, they got loans from their bankers to cover what Dubai was meant to pay. By the skin of their teeth.

    The construction issues are around the Harmon. There were construction flaws meaning that they couldn't make it the planned 49 stories, so they just stopped it where they were at. I think MGM now wants to tear it (Harmon) down, while the construction company just wants to fix it, and they are in court fighting it out.

    They also had to pay back down payments from people who were going to buy condos on Harmon floors that were never built.
     
  6. acoluzzi

    acoluzzi Low-Roller

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  7. dmr

    dmr Registered Abuser

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    Back when I was first exposed to Las Vegas, not to admit my real age, the Stardust was still owned by the mob and operated by characters such as "Lefty" and "Tony The Ant" who were having a financial picnic with their skimming and book-cooking and such!

    It all came crashing down, and the squeaky-clean White Knight, the Boyd Group was allowed to take over the Stardust and re-open it.

    I find it sad that this once-highly-regarded company, who ran the Stardust for a few decades legally and profitably, were overcome by corporate greed and made the biggest {f-bomb}-up in Las Vegas and imploded the Stardust! :(

    Oh well ...
     
  8. Nevyn

    Nevyn VIP Whale

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    All corporations are overcome by corporate greed. Greed isn't even the right word.

    The Boyd thing was dumb because they miscalculated/mistimed their move and imploded the Stardust when they couldn't afford to build. But it was never operated as a public service.
     
  9. Boone

    Boone Tourist

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    Wynn should be the buyer on the Cosmo - Buy it when MGM can't and he will have the thorn directly inside of the MGM compound. They will pay big one of these days to consolidate the entire City Center area.
     
  10. Joe

    Joe VIP Whale

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    I'm a cynic at heart and have always been skeptical of the rags to riches story of Sam Boyd, the man and what you call sqeeky clean Boyd corporation.

    Maybe now, but I have doubts about back then. He comes to Vegas with $100 to his name and "saved" enough to buy a $10,000 stake in the Sahara and become a partner/owner. And the rest is history and they say.
     
  11. Nevyn

    Nevyn VIP Whale

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    Seems to me Wynn prefers to create his own things from the ground up. He doesn't strike me as an acquirer.

    I mean, he bought the GN, but built it up into a resort (almost a new build)
    Mirage from scratch
    Bellagio from scratch
    Wynn/Encore from scratch.

    I don't think buying an existing property with no room to expand really suits him. Not the same extension of his ego. I'd say its more likely (still very unlikely) that he takes over Echelon from Boyd and tries to outdo what he did with Wynn (while trying to change the "gravity" of the atttactions on the strip away from MGM)
     
  12. mdm4sfest

    mdm4sfest VIP Whale

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    Most definitely youtube: history of las vegas strip. There is a documentary that goes through the years and gives the background of all the hotels built up until the last decade. Great interviews and great videos.:beer:
     
  13. Terry Benedict

    Terry Benedict VIP Whale

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    I have never heard of the ownership of Casino Royale. I think the place is a gold mine. It gives the low rollers a place to go in the middle of the palaces. I was kind of surprised they remodeled the hotel. Actually, I was surprised when I found out they HAD a hotel. I figured they should have simply bulldozed the hotel and tripled the size of the casino. I mean, why would they even bother? If it takes 30 people to run the hotel, you could open five more tables in the casino with those 30 and make more money with less hassle. Or Just add 10,000sf of slots. Cha-ching. But then again, the people running it are smart and don't need to listen to this online Vegas slut.
     
  14. wigwam_salesman

    wigwam_salesman VIP Whale

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    From memory, there is some reason that Vegas casinos need hotels attached to them. I may be completely wrong though.
     
  15. Nevyn

    Nevyn VIP Whale

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    wigwam is correct. Under Nevada law, you can't get approved for the appropriate gaming license unless you are a resort hotel.

    The "Moulin Rouge" article linked in a below thread here talks about it. They are keeping that license active in part because it was issued before the hotel law (so they could operate a casino without a hotel).
     
  16. Joe

    Joe VIP Whale

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    Yes, but. There are other places that have casino licenses. Which means they can have more VP machines than the standard 14 at the local pubs plus slots and keno as examples. Just maybe not table games.

    This was one near our house and they had a casino license.
    http://beanoscasino.com/

    It was still a pub, but they had more offerings for gaming.
     
  17. leo21

    leo21 VIP Whale

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    IIRC, they are owned by the people who owned New Frontier at the time that they had that epic union strike that lasted forever. I went in there to see the new food court and couldn't understand why they couldn't paint and recarpet some of the old sections of the caisno. There are probably a few grandfathered casino licenses that don't require a hotel but any new casino has to have a hotel. It's something that should probably be revisited. It may be a way to get some of those empty pits on the strip filled in at least temporarily.
     
  18. GREGRIO

    GREGRIO VIP Whale

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    TONY MARNELL built the Mirage which started the
    'new' themed properties in Las Vegas. The design of
    the 3 towers connected by one centeral elevator shaft
    in the center was his.
    He built Bellagio, Wynn and Encore too I believe.
    He built and ran the RIO for years before selling it to Harrah's.
    His son Anthony Marnell build MResorts.
     
  19. Sam D

    Sam D Low-Roller

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    That would be Margaret Elardi and her sons. She was the former owner of the Pioneer Casino downtown. The Frontier got progressively worse after it was bought by Phil Ruffin. The last time I was in there the carpet was even more threadbare and everything else was in a state of deterioration. I don't think there could have been more than 40 people in the entire casino and large parts were roped off. At least when the Elardis ran it they knew how to keep the casino full despite the picket line outside.
     
  20. kmarcin

    kmarcin Low-Roller

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    Interesting read of Harrah's buying the IP back in 2005

    I remember when the Imperial Palace was a stand-alone, privately owned hotel and casino. The comps and general vibe of the place were so much better than after Harrah's (i.e. the bean counters) took over.

    In any event, I found this 2005 news article regarding the buyout of the IP. I thought it was an interesting read.

    http://www.reviewjournal.com/lvrj_home/2005/Aug-23-Tue-2005/news/27091901.html
     
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