In addition to his core site of 100 acres across from M Resort, would-be Olympia Gaming mogul Gary Goett is also shopping around an additional 260 gaming-enabled acres directly to the north. Goett’s asking price? A cool million an acre, according to Colliers International. Before you go busting your piggy bank open, be aware that there’s a five-acre parcel smack-dab in the middle of Goett’s scrub land, held by different ownership. Lucky for you, it’s also on the market.
While the gaming entitlement on his land gives Goett an edge over Station Casinos, whose “Losee Station” parcel is zoned just for residential development, he’s picked a devil of a time to go to market. Who’s got the diñero to pony up $260 million-$360 million for land out past the southern fringe of civilization in Las Vegas and develop a casino atop it as well? Boyd Gaming has enough borrowing capacity but its Park Highlands casino project is still in limbo, at the mercy of Goett and the economy.
That’s just as well. Had that or the two other mid-decade casino projects in North Las Vegas, out near the north beltway (Aliante Station excepted) broken ground, they’d all be sitting high and dry, surrounded by empty desert and maybe a few light-industrial facilities. The “Alhambra” casino backed by a tight-lipped clutch of Hong Kong investors is a cinch to never, ever get built. Unfortunately, judging by the bath Station is taking on its excess real estate, you can’t flip anything now either, just sit there and eat dirt. For its part, Station is (by all indications) hanging onto its Cactus Lane site, near South Point. But this is scarcely the time to proceed with that or long-planned Durango Station, the Flying Dutchman of casino projects. Speaking of such things …
Green Valley Snag. Unsecured creditors have flung a monkey wrench into the $500 million resale of Green Valley Ranch to Station. The latter would get the property for less than it cost to build but it’s been losing money for the past three quarters. The property is in tip-top shape but unless Penn National Gaming or Pinnacle Entertainment is waving a $600 million check out there, I extremely doubt you could fetch a better price for the place.
The litigants do ask one pertinent question: Why is management of Green Valley Ranch to be farmed out to one of the many Fertitta-owned LLCs? Is there some good reason Station itself can’t run the place? (Sorry, but the Fertitta Brothers‘ Byzantine business methods invite skepticism.) Atttorneys for the Fertitta and Greenspun clans’ response to the lawsuit is basically, “Nyah, nyah, the secured creditors hold 60% of the unsecured debt, too, so suck on it.” Besides, the petition will be heard by Judge Gregg Zive, who’s ruled in Station’s favor right down the line.
If Zive decrees as one would expect, Station erases $378 million in debt and is forgiven $106 million more. Meanwhile, talks to unload the $662 million Aliante white elephant have slowed to a crawl but are said to still be progressing. The Fertittas pushed ahead with that one at a time when they knew (and said on the record) that the construction market was creating a huge markup on project costs. I suppose they’ve learned their lesson but it was an expensive education.
From Total Rewards to total nightmare? A former security chief of Venelazzo warns that customer-loyalty programs could be the casino industry’s soft underbelly in the war against cyberterrorism. Oh, great. The thought of Al-Qaeda — quickly becoming indistinguishable from the Mafia — tiptoeing through your customer data is enough to make one cut up a bunch of player cards. Or it would, save that the information is already reposing in casino computers and the matter’s out of your hands. But if you’d attended David Shepherd‘s speech at the Golden Nugget, you’d think twice about joining another rewards program, wouldn’t you? I know I will.
Betting on the bedroom communities. According the the Las Vegas Review-Journal, Illinois-based Z Capital Partners has purchased a small stake in Herbst Gaming, whose assets include a trio of casinos in Primm, Nev. (Its portfolio also includes several properties in upstate Nevada, as well as in the Midwest.) Z also holds a minority stake in a pair of Mesquite casinos controlled by Michael Gaughan. Both of these markets have been hit hard by a double-whammy of the Great Recession and poor management by previous owners. However, Z is clearly making a wager that the border towns are on the comeback trail.
Sony’s recent issues with cyber hacking is probably a good example to look at compared to the players databases. For Sony, I’m a bit surprised that there hasn’t been more of an outcry over the stolen data. It would be interesting to see how the casino conglomerates would handle it.
These ARE some of the the same guys who, too lazy to shred their own paperwork, had it sent to a facility in Alabama. Problem was, the truck driver found confidential documents in the belly of his vehicle, rang up MGM and Harrah’s, and demanded extortion money to keep it quiet. I really hope they learned a lesson from that, for our sakes.