Vegas Ventures agrees to buy Downtown Grand out of receivership
Vegas Ventures LLC has agreed to buy the Downtown Grand hotel-casino in Las Vegas out of receivership. The deal still needs court approval and clearance from Nevada gaming regulators.
Court-appointed receiver Paul Huygens of Province LLC filed a motion in Clark County District Court seeking approval of the sale. The buyer signed the asset purchase agreement on 13 August and put $2.7 million into escrow, to be credited against the price. The price itself is not in the filings. Closing is scheduled for no later than 30 September, with a hearing set for 22 September.
Banc of California, holder of the senior lien on the assets, has consented to the transaction. Creditor claims move to the sale proceeds rather than to the transferred assets. Huygens said Vegas Ventures offered the best terms after nine bids were reviewed. None of them topped the size of Banc of California's secured claim.
Operations and the loan history
Vegas Ventures intends to keep the existing lease with Fifth Street Gaming LLC, which operates the Downtown Grand casino. A third-party operator is to be picked for the hotel, restaurants and non-gaming operations. Management agreements with CIM Group Hotel, Third Street Management Group, CIM Management and DTG Las Vegas Manager may be terminated.
The property has been in receivership since January, after a default on a construction loan for a new hotel tower. That loan started at $82.5 million and was later increased by $7.5 million. Debt now exceeds $105 million. Banc of California sued in December, saying the borrowers stopped paying interest in March and missed the 19 August repayment date.
Province sent materials to 167 potential buyers, strategic and financial investors among them. 79 responded, 45 signed confidentiality agreements and 43 got access to the virtual data room. 23 site tours were held for 13 parties. The marketing package ran to a 53-page memorandum and a data room with more than 940 documents.
Vegas Ventures was registered in Massachusetts on 18 August, five days after the purchase agreement was signed. Its manager and resident agent is William Keravuori, founder of the Boston development firm Able Company. The Downtown Grand had been on the market before receivership, but those talks never reached a closing.
