Las Vegas’ shuttered Lucky Dragon Hotel and Casino will be auctioned off on October 30, hopefully to a buyer with a better business plan than the developer who believed he’d created a resort to which deep-pocketed Asian players would throng.
If not, the 203-room hotel and 27,500-square-foot casino on Sahara Avenue near Las Vegas Boulevard, quite a distance from the main Strip action, could be foreclosed on by its main creditor, Snow Covered Capital. SCC could then shop it around, its 2.5 acres possibly attractive to someone looking to develop non-gaming meetings or residential space or an e-sports venue.
For now, though, Michael Parks of real estate services giant CBRE said an auction is the best way forward.
“For the right visionary and owner, this site and amenity-rich property represents an excellent opportunity to own a first-rate Las Vegas hospitality property distinctly situated between the blossoming north end of the Strip and the gateway to Downtown Las Vegas,” he said.
Conceived by developer Andrew Fonfa and built at a cost of $160 million, the Lucky Dragon opened in November 2016 as Las Vegas’ first ground-up casino hotel since the Great Recession and was hailed at the time as the forerunner of a boutique style of resort geared to a very specific gaming and tourism demographic, and as far as Las Vegas goes, a lucrative and well-established one.
Sheathed in red, with Chinese-language signage, a bilingual staff, an authentic pan-Asian food and beverage offering that included a tea sommelier, and a gaming floor weighted toward baccarat, pai gow and sic bo, it looked like a slam dunk.
But it may have been too targeted, according to Parks, who said Strip casinos do well because they “market to a wide audience”.
There were other problems as well. The off-Strip location proved a detriment, discouraging foot and vehicular traffic, and when it came to operational wherewithal, Fonfa lacked the capitalization to compete with the megaresorts on comps, credit, luxury and transportation.
In any event, the paint was barely dry when restaurants began closing, and Lucky Dragon’s troubles were apparent.
In February, 15 months after opening, Fonfa pushed the property into a Chapter 11 reorganization in a bid to avoid defaulting to SCC, which loaned him some $50 million after the city of Las Vegas rejected his request for millions in subsidies. Another $89 million is owed to 179 individual investors from outside the U.S. who’d hoped to trade $500,000 each for a shot at citizenship under the federal EB-5 visa program.
The casino was closed around the same time as the bankruptcy filing, and when no buyers were found to rescue the property out of reorganization it was left to limp along with only the hotel and the remaining restaurants. Those closed on October 2.
The auction will be held at the Nevada Legal News building on Fourth Street near Charleston Boulevard.
