Worst of the year? That’d be Grand Station Casino, a former Harrah’s riverboat in Vicksburg, and its owners, Delta Development & Investments. They managed to parlay a $3.25 million steal of a casino that could have gone for $35 million a few years ago into complete, encumberance-ridden failure. Even after Bally Technologies postponed a planned foreclosure sale (Delta owed Bally $3 million for slot machines), Grand Station still closed last Wednesday, as General Manager Anthony Collins had employees shooed out of the building. Now Delta has to hang its hopes on the possibility that developer Kenneth Bickford, who owns the (separately run) Grand Station Hotel, will pull their fat from the fire. However, when you own a defunct casino with no employees and debts out the wazoo, your bargaining position is basically nil.
What happens in Vegas, cost the head of the General Services Administration her job, along with those of multiple underlings. Ostensibly charged with saving taxpayer money, Martha Johnson‘s agency was splurging on a big Las Vegas blowout. This puts the local power structure and boosters like the Las Vegas Convention & Visitors Authority in an amusing quandary. To coin a phrase, What’s the right amount of wrong? As the Las Vegas Sun‘s J. Patrick Coolican nailed it two years ago, “Here is where Las Vegas and the rest of the country part ways: We’ve built an entire industry, indeed, an entire city, around out-of-towners blowing their discretionary income …”
So, the Powers That Be have to contrive a way to simultaneously applaud the GSA for choosing to blow its dough in Sin City, while simultaneously denouncing the amount of dough-blowage. In return for a minimal price break on M Resort rooms, the casino-hotel was allowed to gouge the GSA for meals, in a public-sector/private-sector back-scratching exercise. GSA administrators even disclosed their meeting budget to M execs, tacitly inviting the latter to overcharge. Consequently, Sen. Harry Reid (D-NV) finds himself having to triangulate between his previous statement that President Barack Obama (D) should “lay off Las Vegas,” etc., and finding the appropriate degree of shock — shock, I tell you! — over the GSA’s “lack of common sense.” He added, “I applaud President Obama for protecting taxpayer dollars and his understanding that the convention business is so important to Nevada‘s economy. Las Vegas is the best place in the world to hold a convention, and it’s understandable why people want to have business meetings here” … so long as they don’t spend public money on mentalists, I guess.
Old Sixty Votes’ GOP colleague, Sen. Dean Heller also felt compelled to put in a Chamber of Commerce-style plug, warning potential investigators that “it was not the location that caused the misuse of taxpayer funds. The convention services my state offers are the best in the world.” (That should worth a round of campaign donations from every major casino in Nevada, except perhaps from cranky Sheldon Adelson, who will surely somehow misconstrue it as a diss of Las Vegas Sands‘ convention facilities in Singapore and Macao.) The Review-Journal‘s excellent Laura Carroll, along with Beltway scribe Peter Urban, had great fun tracing the Kama Sutra-like stances of Reid, Heller and others. The only winner appears to be Penn National Gaming, which is getting a whole mess of free publicity for M Resort out of this. If Penn coveted a naughtier image for the suburban property, now they have it.
Turnaround at Aliante. Not everything that Texas Pacific Group and Apollo Management touch turns to rubble. The debt-for-equity swap that landed them Station Casinos‘ beached whale, Aliante Station, is already yielding dividends. The R-J reports that the $662 million casino (which TPG/Apollo got by assuming $378 million of debt) turned a $573K profit in the waning months of 2011. Gentlemen, my compliments.
No progress yet on the water park that Station says it’s planning for the former site of Scandia Fun Center, one of several properties that were too-hastily vacated or demolished in anticipation of an ill-considered condo development. The good news, for vehicular enthusiasts, is that it means another summer’s worth of gear-grinding at Dig This Vegas. For $249, you can spend 90 minutes tooling about in either an excavator or bulldozer (if you have a deep-seated urge to push dirt around). For $449, you get three hours and driving privileges on both vehicles. Ladies and gentlemen, start your engines.
Memo to casino executives. Even the National Review, in an analysis of the smallpox ward that is the Nevada real estate market pegs the solution as “Jobs and higher incomes.” Big Gaming is expected to squeeze the Culinary Union on wages and benefits in the next round of collective bargaining, this summer. (It failed in Atlantic City, but expect them to try it anyway.) However, Las Vegas’ reliance on low-wage, service-oriented industries has a more than coincidental relationship to the anemic nature of its recovery to date.
Outstanding post, through and through. The GSA could have handled their meeting/convention in a more appropriate way, there is no doubt. I agree with Heller that Vegas is not the culprit here, the folks who allowed this to happen in the manner it did are. The last paragraph of this post is \money\. Every right wing politician is spouting an anti-union message, despite the fact that workers do have the right to collectively bargain. The only segment of our entire population who are seeing rising wages are the fortunate folks at the very top of the ladder. I will be paying close attention to this, and my summer vacation spending in Las Vegas will be steered to casino/hotels that refrain from hardball negotiations against the fine workers who make my Vegas trips great…
As deplorable as the GSA’s actions were, I find it more troubling that they could be moronic enough to think THIS would ‘stay in Vegas.’ The bigger question, to me, is: Did they at least have enough backbone to be hypocrites?