Sue Lowden is back in the news, not for her political activities but as secretary and public face of Archon Gaming, whose 27 acres atop 
the Strip are a hot property again, following the opening of SLS Las Vegas. Dissident investor and frequent thorn in the Lowdens’ side Esplanade Capital has made a purchase that ought to be the dream of a lifetime for an Archon shareholder: $21.65 a share — a 21% premium. That’s a fat price for Archon’s slim portfolio of assets, headlined by flagship Pioneer Hotel & Gambling Hall in Laughlin.
Taking its offer public, Esplanade fired off an open letter to the Lowdens. “ I was afforded the opportunity to speak with the Board of Directors … and reiterate our view that the Company should publicly commit to a sales process with a level playing field. While disappointed, I am not surprised that this demand and my follow-up since have been rebuffed,” writes Esplanade President Shawn W. Kravetz.
“In 2007 during the last land-grab for Las Vegas Strip real estate, the Company squandered a golden opportunity by failing to close the sale of its Las Vegas property at record prices. We now understand from public records that the Company is planning to develop a mixed use arena on its land. The more we learn about this questionable project, the more we fear that the Company is marching down the same worrisome path it pursued in 2007,” Kravetz continues. “There are bona fide deals being executed and once again the Company appears to be eschewing a good, concrete deal in favor of an unproven and uncertain development opportunity.”
Concludes Kravetz, “We continue to view the Company’s stock as undervalued. Unfortunately, we have no confidence that the situation will improve under the existing Board and management. We believe that the Company seems to be run as the personal fiefdom of Mr. Paul Lowden … We remind the Board that it has fiduciary duties to all shareholders and not just to Paul Lowden and his family.”
Esplanade says it has access to development capital through a web of unspecified debt and equity financiers. It adds that it expects to close the transaction in tandem with an anonymous real estate firm with whom it has “a longtime outside relationship.” Judging by the history of the Archon/Esplanade relationship — and barring a shareholder uprising — Archon’s response is likely to be a deafening silence.
* The economic benefits of being near a casino are felt in Columbus, Ohio, were Hollywood Casino is having a ripple effect on the surrounding community. “[A] forgotten, blighted area once deemed the emptiest neighborhood in America,” the West Side of Columbus now 
boasts a McDonald’s, Big Lots, Value City Furniture and U-Haul Super Center, along with a new iteration of TeeJay’s Country Place. Trails and a 47-acre park are slated to follow. Two car dealerships have been rehabbed, with one opening a side business in RVs.
One could go on and but we get the point that, as Hollywood Plaza Managing Partner Tom Heilman says, “It’s the cycle of real estate, and this area is improving. It means better tenants with more disposable income.” Adds Romney Group‘s director of acquisitions, Anthon Stauffer, “Yes, the casino being there influenced our decision. We spent a lot of time researching the history of the West Side, and having a big employer on the other side of [Georgesville Road] makes a big difference.”
Score one for the industry and for owner Penn National Gaming in particular.
