Houston-based billionaire Tilman Fertitta first entered the Las Vegas market with a splash, purchasing a prized 6-acre plot on the Strip last fall for $270 million.
At the time, it seemed as though Fertitta was intent on developing the latest casino-resort in one of the busiest areas of the city, as demolition and licensing processes started right away.
In the months since, however, it would appear that the famed restaurateur and media personality has had somewhat of a change of heart. Truist Securities analyst Barry Jonas recently traveled to Houston to meet with Fertitta and representatives from his company, Fertitta Entertainment, to discuss the company’s future development plans.
Following the meeting, Jonas posited in a research note that with regards to future development on the site, “no firm start date has been set, and management is willing to wait for clarity on economic conditions.”
While Fertitta’s camp has largely remained noncommittal about its future plans since the acquisition was first announced, it did file plans with Clark County for a hotel with 2,420 rooms and a retail complex. Casino plans were notably absent, but that doesn’t completely rule out the possibility.
Not surprisingly, Fertitta is not the only one feeling somewhat lukewarm about the immediate future of the Las Vegas market. CBRE analyst John DeCree said in a recent investors note that the long-awaited $3.7 billion Fontainebleau Las Vegas on the north end of the Strip, the $750 million Durango Casino in the southwest part of town and the $2.1 billion MSG Sphere entertainment venue will likely be the last large-scale developments to debut for the foreseeable future.
In the note, DeCree said that due to the “rising cost of construction and tight credit markets, we suspect development activity will cool off, at least for now. This means the projects slated to open this year could be the last wave of major developments in Las Vegas for a little while.”
This may already be showing itself to be true, as the Las Vegas Review-Journal recently reported that the $550 million Dream Las Vegas project has now halted construction due to a lack of financing. The developers are said to be short some $25 million to $30 million, with no lifelines popping up as of writing.
Despite the cautious approach in Las Vegas, however, Fertitta is still bullish on the northern Nevada market, as Fertitta Entertainment recently announced it is acquiring the Hard Rock Lake Tahoe from Paragon Gaming for an undisclosed price.
Per the company, the property will be redesigned under the Golden Nugget brand once the deal closes—Fertitta currently operates five Golden Nugget properties in Atlantic City, Louisiana, Laughlin, Mississippi and downtown Las Vegas.
The deal is expected to close in the next seven to 12 months, subject to regulatory approval. The property, which sits on a 24-acre plot, is one of four casinos in South Lake Tahoe. Last year, the market reported $263.6 million in revenues, a 5.5 percent increase from the previous year.
In a statement, Fertitta said that he is “thrilled to be welcoming the Lake Tahoe property to the Golden Nugget family. This acquisition represents a significant opportunity for us to expand our footprint into the Northern Nevada marketplace.”
Hard Rock sits in close proximity to the under-construction Tahoe South Events Center, which, upon completion, is expected to hold a max capacity of 6,000.
Paragon has owned the casino since 2015, and has licensed the Hard Rock brand from Florida’s Seminole Tribe.
“We have had an incredible run over the last seven years in Lake Tahoe and couldn’t be more excited for what the future holds for our amazing team members,” Diana Bennett, CEO of Paragon Gaming, said in a statement. “ It’s been a privilege to own this historic property and we look forward to seeing the next chapter under the guidance of Fertitta Entertainment.”
Unfortunately, a shooting took place at the property on March 25, which resulted in one death. After a swarm of law enforcement officials converged on the scene, two individuals were taken into custody and the casino was reopened after a short lockdown period.
In addition to the recent Hard Rock deal, the firm also acquired the Wildwood Casino and Hotel in Colorado last year for a total consideration of $43 million. That property will also eventually fall under the Golden Nugget brand.
