Bids for the shuttered Lucky Dragon in Las Vegas are due Friday, and some prospective buyers have plans that don’t involve keeping it as a casino resort, according to the commercial real estate firm marketing the property.
No one bid on the 203-room resort at an auction in October, making it the property of Snow Covered Capital, a San Francisco-based venture capital company that had a large investment in the facility. The casino, which opened in November 2016, had filed for bankruptcy in February 2018 and stopped operating completely in early October.
The opening bid at the auction was $35 million for a property built for $160 million. Snow Covered Capital foreclosed on it after being owned more than $50 million.
Michael Parks, senior vice president with the Las Vegas-based Global Gaming Group for CBRE, Snow Covered Capital’s representative in the sale, expects at least five-to-10 offers for the Lucky Dragon. But he won’t know for certain until close of business Friday.
“We have gotten a decent amount of interest in the property,” Parks said. “A lot of people are looking at it, and it’s just a matter of getting the right group over the goal line and a done deal for ownership. They are anxious to get the property sold and will go with the best deal.”
The property is likely to re-open in 2019, but it all depends on the business plan that’s implemented under the new ownership, Parks said. There’s many people with different concepts eying the property and what it’s worth, he said.
“Everyone has a different valuation depending on the business plan,” Parks said. “People are looking at a variety of ways. Some are looking to convert it to a nightclub or to meeting space. Those are the most creative. Some have seen it as an esports lounge or a food hall. There’s other ways to generate revenue other than a casino and that’s why they’re looking at this. A casino isn’t always the best use for some properties anymore.”
The lender took the property back to be able “to run through the normal process on the asset,” Parks said. A buyer had to show up at the auction with cash, and that’s not a good way to sell a property of that size, he said.
The bidding process should include a mix of people with private investors and investment groups, and there’s been plenty of interest from outside Nevada, Parks said. There haven’t been any larger gaming companies interested in it, but some smaller ones have been, he added, without naming names.
“There’s more investors and hotel companies looking at it as opposed to gaming companies,” Parks said.
When offers are made by Friday, they’ll be evaluated and negotiations will commence to get the best transaction for the owner, Parks said. A decision on its sale could be made by the end of January, he said.
The Lucky Dragon didn’t work because its business plan was too focused, Parks said, on a niche market of Asian customers. The casino’s scope should have been broader.
“Unfortunately it didn’t pan out how they hoped,” Parks said. “It will be exciting to see what happens next and who ends up with it and what the property becomes with the new owner.”
