How Did Station Casinos Wind up with the Palms?

So the Palms has reopened finally, under new ownership. I understand that Station Casinos made a series of bad decisions -- overbuilding, paying ridiculous prices for artwork and performers, and generally running the place into the ground. So when everyone talks about the "heyday," they're referring to the Maloof era, right? But what happened there? How did Station Casinos wind up with the place when it was in its heyday?

The Palms is a lesson in hotel-casino development: Don’t build luxury condos in Vegas just ahead of a recession.

Palms Place, the other tower on the Palms property, was the beginning of the end for the go-go years there. The $350 million tower was a bust, but it was also one of a cascade of business problems to hit the Maloof family, which opened the Palms in November 2001. They were heavily invested in Wells Fargo (to the tune of $248 million in 2002), whose stock took a nosedive in 2009, along with other banks and investment firms, and their cash cow, the largest beer distributorship in New Mexico, was sold, eradicating an annual revenue stream pegged at $100 million.

During the boom years of the 2000s, George Maloof added the $600 million Fantasy Tower and the 600-unit Palms Place (estimated at $350 million). But by May 2009, condo sales had petered out and he had to offer to underwrite financing of the sale of 150 units. Occupancy in the condo-hotel was reported as low as 33%. Condos that had sold for as much as $3.2 million hit the resale market at deep discounts. Unable to meet debt covenants, Maloof was inexorably dragged down by Palms Place’s failure.

Reduced to figurehead status, Maloof had to stand by while his casino president, Paul Pusateri, was sacked in favor of Joseph Magliarditi, late of the deeply troubled Hard Rock Hotel & Casino. Signature Maloof amenities like Garduño’s and the Playboy Club were stripped from the Palms.

Strapped with $400 million in debt and missing interest payments, in June 2011, the Maloofs "partnered" with Leonard Green & Partners and the Texas-based TPG Capital investment firm, two of the larger debt holders. TPG-Green converted their debt to equity, leaving the Maloofs with a 2% ownership.

Station Casinos held a 6% ownership position in the Palms from the start (the Greenspun Corporation, publisher of the Las Vegas Sun and large landowner in Henderson, held another 6%) and in June 2016 bought out TPG/Green for $312 million.

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Comments

Adam May-07-2022

QOD answer needs rewrite

This answer feels like a bad cut-and-paste job. "This let to the low ebb of George Maloof's Vegas career last Thursday" Sure-- if 'last Thursday was in 2013. The QOD answer makes it sound like this just happened. Also, the Sacramento Kings ownership interest was sold by the Maloofs to Vivek Ranadivé in 2013. The answer's phrasing "right now" makes it seem like the Maloof's still own the team, which isn't the case. If QOD is going to reprint past material, it should directly state that in the answer.

Lotel May-07-2022

What??

That was confusing

VegasVic May-07-2022

Palms Place

I've stayed at Palms Place several times.  Big rooms and suites, good rates (not always though), quiet. Short walk, indoors, to Palms casino.

VegasVic May-07-2022

Adam is Right

This "answer" has info that hasn't been accurate for many, many years.  And there are typos in it. Hopefully fixed and/or replaced sometime today.

Llew May-07-2022

???

Sorry, I don’t see how Stations came to own the Palms, which was the original question, no?  I have no idea who/what Leonard Green and Partners is/are.  Owners of Stations?

Llew May-07-2022

Adam

Since we’re picking nits here, Maloofs does not need an ‘.   
Signed, the Apostrophe Police. 😁

Deke Castleman May-07-2022

fixed

Sorry for the mishap. All's well that ends well.

Jeff May-07-2022

The answer is a retread from 2013

I wrote the following before deke@lva posted his apology, but I was slow in posting it, however my comment still applies to much of his edited and truncated QoD answer.

After reading the above comments, I Googled "This let to the low ebb of George Maloof’s Vegas career,"  because it contained the typo "let" instead of "led." 

The search revealed that today's QoD was an almost verbatim retread of a QoD from 2013. https://www.lasvegasadvisor.com/question/2013-01-28.

At least when LVA plagiarizes, it plagiarizes itself. Repeating the misspelling from eight years ago is typical of the QoD writer's lack of proofing of his copy.

To LVA's credit, Anthony will not delete these comments.

This could have been avoided by prefacing the retread with "As we reported back in 2013," but then pasting an eight year old answer to a 2022 question would have been a glaringly non-responsive reply. [The "corrected"  truncated version still isn't much better.]

Jackie May-07-2022

@Adam

The question was "How did Station Casinos wind up with the place when it was in its heyday?
Meaning 8 years ago.

So Deke's answer was appropriate.

Eileen May-07-2022

Maloof and The Palms

Hang in there LVA - you're doing great!

Roy Furukawa May-07-2022

The Palms

Lots of nitpicking going on over this one, but I do have to say the Maloof brothers got it right when they ran the joint and it was a place to be in its heyday. When it closed, it felt more like a deja vu moment of the end of the movie Casino where all the old hotels get imploded and no one knew you, what you play or what you drink. It's all corporations now.

Question of the Day - 07 May 2022

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