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They burned the Monte Carlo ... and may get away with it
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They burned the Monte Carlo ... and may get away with it
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Where to start? Well, Gov. Steve Beshear is about to throw in the towel on his casinos-for-Kentucky push, having decided he couldn't get it past the House. And remember: That was supposed to be the easy part; the state Senate's approval and popular ratification were considered to be much greater long shots.
So it's off the table until 2010, meaning that Columbia Sussex CEO William J. Yung III, having shoveled hundreds of thousands of dollars in Beshear's direction, has nothing to show for it but some empty buildings in Covington, Ky.
Then today, the Indiana Gaming Commission had to weigh whether to allow Yung to keep his Casino Aztar riverboat (above), in Evansville. Quoth the Courier-Press of Evansville: "By law, the Indiana Gaming Commission may not license a company that has seen one of its gambling licenses revoked in another state." The vessel's been on the market since December and no buyer had been identified, perhaps because -- under Yung's errant captaincy -- aged Casino Aztar has become the least-visited casino in the Hoosier State and lost almost 250 employees.
IGC Executive Director Ernest Yelton, got his wish though. Just minutes ago, the Carano family's Eldorado Resorts came to the rescue, bearing a $245 million purchase offer (possibly less, if Casino Aztar doesn't meet certain benchmarks). Although this spares the IGC from having to actually strip Yung of his license, commission members did split the baby, after a fashion: Columbia Sussex will relinquish day-to-day operations to state-appointed trustee (and former Harrah's exec) Robert Dingman.
This is something of an experiment for the IGC. A bill that "would have set up a procedure for operating an Indiana casino temporarily if the owner lost its license, filed for bankruptcy or abandoned a riverboat" died in this year's Indiana Lege for mostly unrelated reasons. So the commission has to move forward into uncharted waters, reliant on a gentleman's agreement (and power of attorney) from Columbia Sussex.
About the new owner: In addition to owning an eponymous casino in Reno, Eldorado Resorts recently was awarded full ownership of a former Hollywood Casino riverboat in the Shreveport market, which it is currently operating under the Eldorado brand.
And a Columbia Sussex that was puffing with pride a year ago, having won a runaway bidding war for Aztar Corp., now must look upon a much-shrunken version of its merged C.S./Aztar empire. It had to surrender Aztar's Carurthersville, riverboat to Missouri regulators right out of the gate, then lost the Atlantic City Tropicana last December. Now Casino Aztar is going bye-bye, leaving only the LV Trop and a former Ramada Express in Laughlin (above) as the only remnants of Aztar.
For the upside, what the Courier-Press' editorial page describes as Yung's "short, unpleasant tenure in Evansville" is fast nearing an end.
On other fronts ... The largest loan in a pool of cross-collateralized hotel loans held by Bear Stearns Commercial Mortgage Securities happens to be that of -- you guessed it -- Bill Yung! Here's the techno-speak:
The Columbia Sussex Portfolio (93%), the largest loan in the pool, is collateralized by 14 full-service hotels located in 13 major urban markets with a total of 5,821 rooms. At issuance the portfolio occupancy was 76% with an average daily rate (ADR) of $131 and revenue per available room (RevPAR) of $99.6. At year end (YE) 2007 the portfolio occupancy declined to 65.2% with an ADR of $158.9 and a RevPAR of $99.4. Fitch stressed YE2007 net cash flow (NCF) also declined 6% compared to issuance NCF. The initial maturity date was October 12, 2007. The loan has three one year options to extend, and is currently in the first of the one year extensions with a maturity date of October 12, 2008 and mortgage rate of 6.3%. As a condition of the extension the loan was converted from interest only to amortizing.
A.C. Tropicana workers want a say in who their next boss turns out to be. While I sympathize, given what they've been through, New Jersey regulators need to tell Unite-Here Local 54 to take a step back: This is what Justice Gary Stein and, through him, the New Jersey Casino Control Commission get paid to do. After the fiasco that was 'ColSux,' they're unlikely to make the same mistake twice.