DeathWatch V : VegasTripping Interview With Nick Christenson 2009

Turn Your Head and Cough Las Vegas, The Doctor Is In (again)

Posted by Chuckmonster

Las Vegas Casino Death Watch

VT: What's the over/under on Tropicana closing?

Nick: As with all these places, I think the odds the Trop will close is low, unless things get much worse for a very long period of time. Actually, in some ways the Trop is in better shape now than it was a few years ago. Appointing Scott Butera to run the place was the smartest thing Columbia Sussex did since they bought the place.

VT: What do you make of Boyd Gaming's decision to halt construction on Echelon?

Nick: When it first happened, I was confused by it. After I learned more about what happened and the economic environment became worse, the decision went from being mystifying to being genius. Remember that as part of Echelon there were going to be four hotels, one of which would be managed by Morgans Hotel Group, and one by shopping mall maven General Growth Partners. These are two companies that are in real trouble, and many have suggested that either or both may have to go the Chapter 11 route. In any case, it appears to be clear that neither of them could have raised the money to meet their obligations to Echelon as a whole, and given that, the decision to mothball the project was practically mandatory. As a result, Boyd is now in one of the stronger financial positions of any Las Vegas casino operator. Certainly their bid for Station's assets is an example of this.

VT: Do you see Station Casinos accepting Boyd Gaming's offer?

Nick: I believe the Fertitta's might rather cut off each others' limbs than accept Boyd's offer. This was another genius move on Boyd's part. If Station accepted the offer, Boyd gets a huge chunk of the Las Vegas locals market at fire sale prices. With Station turning Boyd down, Boyd drives a wedge between the company and their debt holders. As I understand it, the Fertittas were offering their bond holders about ten cents on the dollar. Boyd's plan gives them about thirty cents on the dollar. Either Station is going to have to up their offer, which helps keep Station down for a longer period of time, or they're facing a revolt.

It's entirely possible that the bond holders may force Station into bankruptcy, have a special master appointed to run the company, and insist that they sell off assets to Boyd. Station management may not have a choice in this matter. Either way, it's good news for Boyd. They played this brilliantly.

VT: Since the Stardust closed, Boyd Gaming has sunk a bunch of money into their downtown properties including new rooms, new public areas and upgraded amenities. How are they doing downtown?

Nick: They continue to do their regularly scheduled upgrades, but they're not making big changes downtown. Downtown has been in trouble for years, and the latest climate has only exacerbated things. That said, Boyd seems to do okay in that market, so I expect things there to continue on the same trajectory for the next few years.

VT: Speaking of downtown, we're both big fans of Binion's "Horseshoe". Last year, Four Queens' owners TLC bought Binion's, how are they doing?

Nick: Well, like everyone else they're hurting in the economy, but overall I believe Terry Caudill buying Binion's has been the best thing to happen to that place in perhaps more than a decade. For the first time in quite a while we have someone who understands the downtown market, who has fixed up the Four Queens and made money, someone who has their feet on the ground locally and can react to events as they happen. Caudill understands the value inherent in the Binion's brand and history, and I think he'll do the right things. Certainly the changes I've seen in that property have been improvements. Of course, that doesn't mean that times aren't tough. I'm actually more encouraged about Binion's future than I have been in quite some time. As long as they can ride through the next few years, I think they have a chance of becoming part of the eventual (cough) downtown revival that's going to happen any decade now. No really.

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So, like..when is Bellagio going to get rid of the old tube TVs?

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