James Packer has abandoned his dream of a luxury megaresort on the Las Vegas Strip.
Packer’s ASX-listed Crown Resorts has hired brokers CBRE Group to try to get $400 million for the 35 north Strip acres, located directly across from Wynn Las Vegas and just north of the Fashion Show Mall.
The sale comes six months after Crown announced it was scrapping plans to develop a 1,100-room resort at the site called Alon Las Vegas.
The appears consonant with a strategy that has seen Crown dismantle its international presence in favor of paying down debt, focusing on its domestic operations, including development of its Crown Sydney super-resort, and possibly marshaling resources for a bid for one of the casino IRs that will be licensed in Japan.
The strategy was capped recently by Crown’s final exit from the Macau market with the sale of the last of its stake in Lawrence Ho’s Melco Resorts and Entertainment, formerly Melco Crown Entertainment.
Crown still holds a 50 percent interest in the Aspers casino group in Great Britain.
Packer, officially a Crown director and owner of 48 percent of its stock (he resigned as longtime chairman in August 2015) once claimed a “special reverence” for Las Vegas. But the town has not been so good to him. Over the years he’s lost nearly $2 billion on gaming investments in the U.S., most of it in the form of high-profile Strip projects abandoned when the Great Recession hit.
Alon, pegged at $2.4 billion at full build-out, was to be different.
Vegas in 2014 was roaring down the comeback trail when Crown joined with deep-pocketed investment group Oaktree Capital Management and former Wynn Las Vegas President Andrew Pascal to take control of the site. The New Frontier, which had stood there for decades, had been demolished in 2007 by an Israeli group whose plans for a multibillion-dollar resort called Plaza Las Vegas also had crashed and burned in the recession. The partners bought the land out of foreclosure for $280 million. The Israelis had paid $1.2 billion for it just seven years before.
The Alon holding consists of 18.4 acres, which the Crown partnership owns outright. Another 16.2 acres were leased from the family that had owned the Frontier. Both parcels are part of the sale, says CBRE.
John Knott, an executive vice president of the firm, described the parcel as “one of the most exciting properties to become available in Las Vegas in a long time”.
Yet, despite robust post-recession visitation and convention numbers and strong non-gaming spending, Las Vegas has seen little interest in greenfield casino development since The Cosmopolitan opened in 2010. Land prices on the Strip are high, for one thing, and large-scale projects aren’t as feasible today as when the region was awash in easy money during the boom years.
On the north Strip, the SLS Las Vegas, which has struggled since its 2014 debut at the site of the old Sahara Hotel, was sold earlier this month to an outside investment group.
Not far away, Genting Group recently announced yet another delay in the opening of the first phase of its $4 billion Resorts World Las Vegas. The project occupies the site of one of the recession’s other big-name casualties, Boyd Gaming’s aborted Echelon. Genting acquired the site from Boyd in 2013 with plans to open in 2016. Major construction has yet to start, however, and the latest announcement is for an opening no sooner than 2020.
