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Recently, lenders have agreed to support Station’s plans of reorganization. These plans include the Fertittas and Colony Capital taking ownership of the four big hotel-casino properties of Red Rock, Sunset Station, Boulder Station, and Palace Station. They also include a $772 million bid by a new company to be formed from Fertitta Gaming, Colony Capital and the mortage lenders to the 4 big casinos.
Here is more of the story from the Las Vegas Sun:
Station said the $772 million bid is to purchase the OpCo assets of the company, in addition to the PropCo properties. These additional assets include Santa Fe Station, Texas Station, Fiesta Henderson, Fiesta Rancho and Indian gaming projects.
The company didn’t immediately say whether the $772 million bid would include Station’s joint ventures with the Greenspun family, owner of the Las Vegas Sun. These include Green Valley Ranch resort in Henderson and Aliante Station in North Las Vegas. A Greenspun affiliate in a separate bankruptcy case is trying to replace Station as manager of Green Valley Ranch, charging mismanagement there. Station has denied those allegations.
“We are pleased to have reached agreement with the steering committee of the Opco senior lenders on the acceptance of our stalking-horse bid and our plan of reorganization. This agreement is another important step toward maximizing the value of all of the Station Casinos’ properties for the benefit of our team members, guests, lenders and the Las Vegas community,” said Frank Fertitta III, chairman of the board and chief executive officer of Station Casinos.
The $3.9 billion casino plans to open its doors in December, CEO John Unwin announced. The Cosmopolitan plans to open everything except around one-third of its hotel rooms, which should be phased in next July.
Here is more of the story from the AP:
Cosmopolitan CEO John Unwin said the hotel’s amenities, including 13 restaurants, a spa, nightclub, 150,000 square feet of meeting and convention space and retail stores, would open in mid-December with the casino and the bulk of its 2,995 rooms. The resort is going for approachable elegance, Unwin said, with all the offerings of larger resorts presented on 8.7 acres, meaning shorter distances between the Cosmopolitan’s features compared with other hotels.
“I think this really changes how a major casino-resort in Las Vegas is set up,” Unwin told The Associated Press. “It’s still big, but it’s not 15 minutes in terms of getting around the casino.”
Unwin, a former general manager for the 85-acre Caesars Palace who began leading the Cosmopolitan in October, told the AP that its decision to phase in about 1,000 rooms a few months after the casino opens has been in place about one year, to give more time to move furniture and finish interior work.
He said the resort’s construction is fully funded and plans are firm to have all of Cosmopolitan’s rooms open by July.
A report was released that taxable sales for the state of Nevada has decreased by 8.1%. This decrease is mainly caused from the decrease of the construction industry, down 57.4%. Most of the other sectors have actually shown an increase.
The biggest rise is in accommodations at 14.0%. This actually looks good for Nevada’s tourism, as it means more money was spent on hotels than last year. This does look like the sign of some recovery in the tourism and travel industry, even if the reports are saying that the recovery is going to be slow.
Two other areas that have increased are furniture and furnishings sales and clothing and accessories sales. They have risen 6.9% and 5.0%, respectively. Merchants are reporting that they are seeing an increase in sales, but shoppers are still wary about making the big purchases, as they are going more towards the smaller purchases.
Two areas that have declined are auto sales and food and beverage store sales. These in addition to construction sales have been the worst hit for the past two years. There are expectations that taxable sales will stutter between growth and decline before showing gains over time.
There have been comparisons of the state of Nevada’s (as well as the rest of the country’s) economy to a “tortoise rally”. Nevada’s will actually be slower than the rest considering most of the economy is dependent on the leisure and hospitality sector, which really depends on the economy of the other states.
Boyd Gaming Corp. of Las Vegas narrowed its fourth quarter loss even as revenue fell across the board as the slow economy reduced spending at its hotels and casinos around the country.
Boyd said today it lost $1 million, or 1 cent per share, during the fourth quarter of 2009, compared to a loss in 2008’s fourth quarter of $220.8 million, or $2.51 per share. Net revenue fell from $422.6 million to $384.9 million during the year-over-year period.
During a conference call with investors and analysts today, Boyd executives reaffirmed the company’s commitment to acquiring Station Casinos’ assets and discussed the company’s view of the current condition of the Las Vegas locals market.
“During the fourth quarter, the economy continued to be weak, unemployment remained high and consumers continued to be cautious with their discretionary spending,” Boyd Gaming President and CEO Keith Smith said. “Looking forward, however, we are seeing some signs that recovery is under way, despite the fact that the nation’s economic forecast remains uncertain.”
Simon Property Group announced Tuesday February 16th that they have proposed a deal to buy General Growth Properties for $10 billion.
This deal would combine the two largest shopping mall owners in the United States. It could also mean a different outlook on the shopping malls in and around Las Vegas. General Growth is $27 billion in debt and filed for Chapter 11 bankruptcy reorganization last April.
General Growth has a lot of undeveloped land in Summerlin, including the Summerlin Center mall that had construction stopped in October of 2008. They also own Fashion Show mall, the Grand Canal Shoppes at the Venetian, the Shoppes at the Palazzo, as well as other malls close to the Strip. Simon owns Las Vegas Outlet Center and the downtown Las Vegas Premium Outlets.
In the letter sent from Simon to General Growth, Simon states that the “all-cash transaction will result in a favorable outcome for all of General Growth’s creditors and shareholders.” It was also stated that the merger would be “a prompt conclusion to General Growth’s reorganization proceedings.” This basically states that for the $10 billion offer, Simon would own all that General Growth owns and the debt that General Growth has would be gone.
General Growth has not commented on the offer as of yet.
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