Where is your pride, Boyd Gaming? After being kicked in the teeth by Morgans Hotel Group last summer (when Morgans leaked the news of Echelon's suspension before Boyd's planned announcement), the casino company is crawling back for more.
Today's announcement by Morgans extends the life of a deal that was set to expire on Rosh Hashanah (Sept. 30), but at terms that represent a total capitulation by Boyd. In addition to receiving an extra 15 months to finance its two-hotel commitment to Echelon, Morgans: A) gets its $30 million deposit back, stat; B) is released from $41 million worth of funding obligations toward Echelon; C) obtains complete control of how the Delano and Mondrian brands are used in connection with Echelon, and D) is not required to guarantee its construction loan.
That's one sweet deal — for Morgans. Boyd gets bupkes. Clearly, it was negotiating from a position of extreme weakness. Is it so hard up to find a hotelier as a joint-venture partner that Boyd must assent to such a lopsided deal? In spite of having taken a 9-12 month pause for reflection on Echelon, Boyd has obviously not backed off from its Ahab-like determination to build the whole thing in one great gulp.
Meanwhile, the other JV partner, General Growth Properties, continues to melt down. It'll be interesting to see whether Boyd continues to pursue that dysfunctional relationship also. If Boyd felt — as it said — that it could open Echelon in stages, then there's no reason it can't build the metaresort in the same way, mothballing the mall/boutique hotel aspects of Echelon until more reliable partners can be found. It's difficult to read the present course of action as anything other than sheer obstinacy … with perhaps a large portion of masochism mixed into it.
