Saturday, August 15, 2015

Las Vegas Club Sold to Derek Stevens

Las Vegas Club downtown on Fremont Street has been sold to the owners of The D and Golden Gate - brothers Greg and Derek Stevens. The property will close in the next few days and will likely remain shuttered until plans are finalized for a renovation.

The purchase price was undisclosed, but property records show a $40 million transaction for the real estate. The gaming assets still belong to the old owners PlayLV a subsidiary of Tamares Group. PlayLV also owns The Plaza next door.

Greg and Derek Stevens through their company Desert Rock Enterprises owned 21% of Riviera. When that property was sold for $182.5 million the Stevens brothers theoretically cashed in for $38.325 million. It looks like they are taking that money and reinvesting in Las Vegas Club.

The Riviera slot machines were also sold to Derek Stevens shortly after the closing, so I'm guessing many of those slots will end up at Las Vegas Club eventually.

Las Vegas Club has been the worst downtown casino for a while now and had fallen into a state of disrepair. Having Derek Stevens take over is the best possible outcome for this property.

There are many different directions Stevens could go with the remodel. The first priority will likely be getting the hotel portion of the property - which has been closed since 2013 - remodeled and back in operation.

Las Vegas Club currently has a sports theme. If done right I think keeping this theme could be a good option. Converting the casino into a giant sports-bar / sports book area with traditional casino games mixed in could be an interesting idea.

It really is a blank slate though, and after the creativity he's shown with The D and Golden Gate I trust that Stevens will do something great with Las Vegas Club.

Derek Stevens tweeted about the acquisition:

Lots of Q's regarding LVC. We will evaluate the property thoroughly to determine Max Best Use, then do it.

Addressing concerns that he and Boyd Gaming will have a duopoly on downtown casinos Stevens tweeted:

don't worry. I'm committed to 3-2 Blackjack,10X odds on dice and a great value in our offerings....

Friday, August 14, 2015

SLS Net Loss Increases in Second Quarter

A filing today with the SEC revealed that SLS Las Vegas had a net loss of almost $49 million in second quarter 2015.

SLS managed only $36.9 million of net revenue in the second quarter. In comparison Circus Circus did over $63 million in net revenue during the same period.

Not surprisingly Food and Beverage seems to be a problem - $16 million of revenue was wiped out by $21.7 million of expenses.

Casino, Hotel and Retail seem to be doing about the same as last quarter. The bottom line was also adversely affected by a refinancing expense of $8.7 million.

The poor operating performance has caused parent company Stockbridge to make capital contributions to the company to keep SLS afloat. From the filing:

As of June 30, 2015, Stockbridge Fund III has funded capital contributions totaling $28,157,702, and has confirmed to the Company that it has the intent to provide sufficient funds to the Company, if necessary and if unavailable through other sources, through December 31, 2015 to enable the Company to pay its obligations as they become due.

The Company has initiated certain actions to increase revenues and reduce expenses in order to improve the results of operations, and the Company intends to initiate further actions in 2015 to improve profitability of the Company. However, there can be no assurance that such actions will be effective. There is no assurance that Stockbridge Fund III will provide capital contributions subsequent to December 31, 2015.

It looks like if things don't turn around by the end of 2015 the property may have to close, or be sold for pennies on the dollar in some kind of bankruptcy.

Thursday, August 13, 2015

Bally's Grand Bazaar Shops

I haven't had a chance to share my thoughts about the Bally's Grand Bazaar Shops on this blog. With many of the shops opening, now seems like a good time.

Bally's is located pretty far off the Strip in terms of walking distance. For years to reach the casino you would travel up a long moving walkway, and then up and down a series of escalators. Pretty inefficient.

The large amount of space between the Strip and the entrance presented an opportunity for Bally's parent company Caesars Entertainment to build something productive. With retail being hot right now, and an easy way to make money by simply renting space out to tenants - the decision was made to develop the Grand Bazaar Shops.

The area has been open for a couple of months, but it seems like tenants are just now starting to open. One of the anchors is a Starbucks with stadium style seating for people watching. Fuel Bar and Garage has flair bartenders along with the "garage" game-room with beer pong, pool and even basketball. There's also a hot sauce shop that I'll probably have to check out.

The shops have been widely criticized across the internet for being tacky, flea-market-like, and an eyesore. I can't exactly disagree with any of these sentiments, but I'm probably more open minded than most comment section participants.

From what I've seen the layout just seems odd. I understand that Bally's isn't a luxury property, but I think Caesars could have made this area into a nicer space - similar to what they did with The Linq and what MGM is doing with The Park.

The saving grace might be the free attractions at the shops:

Nightly Light Show:
Experience the unique hexagonal LED rooftop canopy, designed just for Grand Bazaar Shops, featuring an energetic light show set to custom-created themed soundtracks.

Swarovski Midnight Celebration:
Central to the Grand Bazaar Shops’ experience is the Swarovski Crystal Starburst. The Starburst soars above Grand Bazaar Shops’ colorful, mosaic-pattern rooftop canopy and is the star of the nightly Swarovski Midnight Celebration, a brilliantly colored light, music and video spectacle.

I'm guessing neither of these will become the next Bellagio fountains or Mirage volcano, but in a time where free attractions are going away, it's nice to have them as an option. I really liked the old Bally's moving walkway light show, so I have a feeling I might end up liking this one as well.

Wednesday, August 12, 2015

American Place Indianapolis Development

Dan Lee has been involved with the financing and development of some of the most iconic Las Vegas hotels.

As Chief Financial Officer, Treasurer and Senior Vice President of Finance and Development for Mirage Resorts under Steve Wynn he oversaw the financing of Treasure Island. He then engineered the company's purchase of The Dunes which led to the development of Monte Carlo and Bellagio on that land.

Lee also helped to put together the joint venture between Mirage Resorts and Boyd Gaming which led to the building of Borgata in Atlantic City. Later he became the CEO of Pinnacle Entertainment where he developed L’Auberge Casino Resort in Lake Charles, Louisiana. Lee also ran The Palms in Las Vegas for a brief period.

It was only a matter of time before Dan Lee got involved in developing another project. Now as CEO of Full House Resorts he has come up with an innovative plan.

Full House owns the under-performing Rising Star casino in Indiana. Realizing that Rising Star doesn't need as many table games and slot machines as they have licensed by the state, Lee is proposing to shift about half of Rising Star's gaming capacity to Indianapolis.

The resulting proposal is American Place - a mixed use development with a casino as the centerpiece.

The location is an old airport terminal that was essentially abandoned when a new terminal was built. That left the surrounding area including many hotels economically depressed. This development would provide a much needed boost to the area, and since it's near an airport many of the local neighborhood concerns regarding a casino are non-existent.

On the latest Full House earnings conference call today, Lee called the development a long-shot. After cutting through miles of government red tape they would still need to finance the project - likely partnering with another real estate developer. Still, this outside the box thinking is why Dan Lee is a name to watch. It wouldn't surprise me to see him develop something in Las Vegas sometime in the future.

Tuesday, August 11, 2015

Alex and Mia Las Vegas Videos

Alex and Mia are YouTube vloggers who just a couple of days ago published a series of videos documenting a trip to Las Vegas. I was unfamiliar with Alex and Mia before stumbling upon these videos - but they have two hundred fifty thousand subscribers on YouTube so they're kind of a big deal - at least to a demographic ten to twenty years younger than the readers of this blog.

The first video (August 1, 2015) sets the stage. Alex and Mia (with another couple) travel from LA to Las Vegas for Mia's 21st birthday on Virgin America and check-in to a ridiculous suite at The Cosmopolitan before hitting the Bellagio buffet and doing some gambling at Harrah's. Everything is going well so far.

The next video (August 2, 2015) is where the trouble begins. It starts off with Alex showing off an amazing view of the south Strip and taking advantage of some lavender-peppermint shower gel before the group heads off to ride the High Roller. It looks like they were doing the open bar package and had a good bartender who poured them a shot when the wheel reached its highest point. Some nice Vegas footage here. They then headed to the new O'Sheas to play some beer pong. I haven't been in the new O'Sheas yet, but from the video it kind of reminded me of the old O'Sheas which is a very good sign.

At the 5:25 mark we learn The Cosmopolitan has failed Alex as he reveals he was (allegedly) robbed of a $100 casino chip by (allegedly) the Cosmo housekeeping staff. If that wasn't bad enough - at the 7:48 mark Alex tells us they also found bedbugs in their Cosmo suite. Here's a picture Mia posted on twitter of the bedbug:

After a long wait the group gets moved to another suite which is even better than the first. It must have been a wraparound as they had views of the south Strip along with a different view of the Bellagio fountains and the rest of center Strip.

The third video (August 3, 2015) opens with the view from yet another room as they were told the "eco test for bedbugs came back negative." Interesting. After a trip to Marquee Dayclub Alex and Mia head off to The Palms to dine at Alizé. I had actually never heard of this place that boasts "the most spectacular view in Las Vegas with French cuisine beyond imagination."

The final Las Vegas video (August 4, 2015) starts with Alex placing some insane sports-book wagers followed by the group heading down to Fremont Street.

So there you have it. I enjoyed the Vegas footage in these videos. It was definitely surprising to see the (alleged) theft and bedbug issues at a hotel as nice as The Cosmopolitan. I guess it's a reminder that unfortunate things can happen anywhere, even at the most expensive hotels.

Monday, August 10, 2015

Monte Carlo Name Change

Monte Carlo is getting a new name. This has been hinted at and speculated for a few months now, but MGM Resorts International CEO Jim Murren has all but confirmed it. The name change will likely take place in 2016 around the same time the new Monte Carlo theater is finished.

Murren was quoted today in a Vegas Inc article saying, "a name change is almost a certainty." Apparently in focus group testing the Monte Carlo brand name did not resonate with customers as well as other MGM properties did. This isn't really surprising, as Monte Carlo is often overlooked despite its prime Strip location.

Here's the part of the blog post where I wildly guess some possible new names for Monte Carlo:

The Park - Naming the hotel and casino after the attached promenade would be taking a page directly out of the Caesars Entertainment playbook when they ultimately renamed Imperial Palace as The Linq. While this would make logical sense - it isn't the most exciting option.

Central Park - This name would incorporate a few different things. "Central" would highlight the hotel's relative location on the Strip and close proximity to City Center. "Park" is the name of the outdoor promenade. "Central Park" is obviously a New York reference which would essentially turn New York New York, The Park development, and the Central Park hotel into one distinct area.

Park Avenue - Another name with a New York twist. I think the road going through The Park development will be named Park Avenue, so the hotel having that same name might be a possibility. The strong New York tie-in would make this a de facto sister property to New York New York, which would make perfect sense since they will be sharing The Park development.

Borgata Las Vegas - This one is total speculation and is the longest of the long-shots, but in my mind it would be a good move. If you're not familiar Borgata is the nicest hotel casino in Atlantic City. It is owned as a 50/50 joint venture between MGM Resorts and Boyd Gaming. MGM could trade their stake in the AC property to Boyd in exchange for exclusive Borgata Las Vegas naming rights. Again, this is extremely unlikely but if MGM wanted to make a big splash with the re-name I can't think of another brand that would bring more excitement or credibility than Borgata.

Update - June 3, 2016: Park MGM is the new Monte Carlo name.

Sunday, August 09, 2015

Rio Samba Suite Review Pictures

I had a chance to stay at Rio recently and was upgraded to one of the relatively new Samba suites.

One of the biggest positives at Rio is the large size of the rooms. Every room is a "suite" in the Las Vegas sense of the word, although these rooms might not qualify as suites in other cities.

The Samba suite was very nice. You could tell the carpet and almost everything else in the room was newly replaced. One strange thing was the placement of the TV right in front of the window - but who watches TV in Vegas anyway?

Bottom line - because of their off-Strip location Rio usually has very affordable room prices. Booking a room at Rio and then trying to score an upgrade to a Samba suite at check-in might be a good option for a budget trip - assuming you can deal with being slightly off the Strip.