In February 2007, less than two years after the old San Remo was sold for $67.5 million and transformed at a cost of $130 million, the principals of Hooters agreed, in principle, to a sale of the property for $225 million to NTH Advisory Group, a private southern California-based development and advisory company specializing in the casino, hotel, and restaurant industries; NTH helped Hooters buy the San Remo.
At the time, the details were sketchy, but it looked as if the Hooters brand would remain in place. The deal, which could have closed as early as June 30, but didn’t, was meant to bail Hooters out of its doldrums, which included a reported loss of $16 million in its first nine months of operation.
In June, Hooters officially accepted the buy-out offer and the first $1.5 million nonrefundable deposit. At the time, it was hoped the deal would close by Oct. 31, but it didn’t. It was announced that the agreement stipulated June 2008 as the hard deadline for the sale. Again, no immediate changes in the property were anticipated.
In September, it was announced that the sale had been "slowed" due to the tightening credit market. A spokesman for the buyer, now listed as Santa Monica-based Hedwigs Las Vegas Top Tier, a joint venture between NTH Advisory Group and an unnamed a private equity investor, stated that the deal itself wasn’t at risk, but that the condition of the markets had altered the financing options. NTH had until Nov. 15 to pay a $1.5 million installment, which it did.
Finally, last month, the investment group behind the $225 million buyout of Hooters, said the deal should close by "late spring." Hedwigs made its last nonrefundable deposit of $500,000 in early March.
As soon as the sale closes, Hedwigs plans to invest $130 million in remodeling the hotel-casino in an effort to court a more upscale clientele. For the first time, it was announced that the Hooters brand would be dropped (so yes, no more orange shorts), but a new name and theme hadn’t been selected. (Interestingly, NTH Advisory Group is involved in developing a Hooters casino in West Wendover, Nevada, 400 miles northeast of Las Vegas on the Utah border.)
Reportedly, Hedwigs is negotiating with a "boutique hotel operator" to run the hotel. It’s unclear whether the property will be closed during the renovations, which could take up to 18 months.
Bottom line: Hooters should sell to Hedwigs by the June deadline, by which time we'll probably know what the new brand/theme will be.
