Remember all those rumors that had the Sahara’s now-vanished Speed: The Ride packed up and headed for Circus Circus? Not so! The good folks and inquiring minds at VegasChatter.com were sussing out some dormant South Strip developments and discovered …
… our old friend Speed adorning an as-yet-unbuilt shopping mall called Akita Plaza. I have my suspicions about the future of Circus Circus but, one way or another, MGM Resorts International CEO Jim Murren had better things to do with precious company money than buy another rollercoaster when he already had a perfectly good one at New York-New York, offering a superior Strip view (and a Las Vegas Advisor coupon deal).
VegasChatter and S&G also have a slight difference of opinion regarding the likelihood of Caesars Entertainment finishing its Ferris while out back of what used to be O’Shea’s. While Howard Bulloch’s erection — officially called SkyVue — makes the more impressive sight, VegasChatter sees modest evidence of activity and, digging more deeply, finds Bulloch to have been rather free and easy with the truth. Also, Bulloch’s satellite map is nearly six years out of date, perhaps more. It still shows Aztar Corp. owning the Tropicana Las Vegas, to say nothing MGM’s eternally mysterious South Strip “Project Z.” An apt choice of initial as, whatever it would have been, it’s dead as a doornail in the company’s current financial state and new, overseas focus. MGM needs another Strip resort like the enviably hirsute Murren needs hair plugs.
VegasChatter cites local speculation that Bulloch’s twin towers are just a placeholder for something else … though what that “something else” could be no one says. And it’s a mighty strange and costly form of bookmark. I think, for all their considerable diligence in research, VegasChatter staffers are a smidgen too quick to take Caesars’ boasting at face value. CEO/President/CFO/Chairman/Grand Vizier Gary Loveman’s minions recently held a dog-and-pony show to convince people that, Yes, we’re really building The High Roller (gag!), which will provide superior-quality views of slums along Koval Lane. Review-Journal reporter Laura Carroll showed not-undue skepticism, which provoked a minor hissy fit from The Linq Executive Director David Codiga (below, displaying progress as of July 25). Such impertinence! How dare they?
Hey, Mr. Codiga, I don’t see much evidence of construction there behind you! Linq retail space is 72% leased, so that’s good. And Codiga tried to cover his posterior by saying 20.4 million humans “pass The Linq site each year.” Of course, that’s not the same as 20 million people going one block off the Strip (and under the Las Vegas Monorail) to ride a Ferris wheel that’s being primarily targeted toward wedding parties and wolf packs of vacationing douchebags, at substantial prices. (“I’d love to imagine a Valentine’s Day when all of the cabins have weddings going on in them simultaneously,” Codiga mused vapidly.)
Its apex will be no higher than the roof of the Flamingo, so forget about seeing any Strip views while you’re riding The High Roller. However, I’m sure you will be as relieved as I to learn that Caesars will rename whatever’s left of Imperial Palace either 3535™ or The Quad™. (Loveman’s big on the letter Q, isn’t he?) Wow, nothing says “fun” to me like “Quad.” Can’t you just hear your parents telling you, “We got a great deal on rooms at 3535!”
According to the R-J, Caesars has budgeted only $183 million toward its Ferris wheel, as opposed to the $300 million official cost of Bulloch’s. Hmmmm. Yes, Caesars has raised $550 million for The Linq (plus spare change for other projects) but, with Loveman casting sheep’s eyes at New York City, Boston, Toronto, Baltimore, Rhode Island, Florida, China and every other potential market within the Milky Way Galaxy — and his company not making enough to cover its $2 billion/year debt service — is the Linq piggy bank going to be raided to cover rash commitments elsewhere? Standard & Poor’s expects Caesars’ cash flow to improve sufficiently next year to eke out 2013 but foresees potential restructuring in 2014. Jonathan Halkyard may be gone but his “amend and extend” policy remains Holy Writ.
Yesterday, the beleaguered company announced a $750 million, eight-year (“subject to market … conditions”) debt offering, exempt from the Securities Registration Act and bearing a 9% interest rate. I wouldn’t stay up late waiting for your note to be repaid in full if I were you. Meanwhile the company’s ‘cocktail party’ stock languishes in the $8 range, its novelty value having lost its fizz over the summer. Small wonder, when your company’s assets only cover 9% of its debt and Lovemanville may actually be worth minus $6.4 billion. Incidentally, “unmarketable intangible assets” is a pretty good euphemism for “vaporware,” if you ask me. But Internet poker’s gonna turn all that around, right, professor?
Let’s face it: These guys are playing out the string, in desperate hopes of a 2013-14 economic miracle before the banks go all Mr. Potter on them. And if the George W. Bush tax cuts — sorry about dragging you into this, bro — are allowed to expire, the news for Pasha Loveman will be very bad indeed. Notice that the states expecting to take the biggest hits include… New Jersey, New York, Maryland, Massachusetts, Virginia, Illinois and California, in all of which Caesars is exposed and/or relies upon for drive-in traffic. (At least the über-important New Mexico market is relatively unscathed.) Awwww, whoops! There went all that “pent-up demand,” off to play with the unicorns.
So am I the only one worried about the tsunami effect of a Caesars bankruptcy? Yes? Whew! I feel so much better. At least Gary Loveman & Co. will be able enjoy watching the wave from the safety of their “observation wheel.”