After closing its casino and restaurants earlier this month, Las Vegas’ troubled Lucky Dragon gaming resort is facing a forced sale next month to satisfy an unpaid $90 million loan.
The Chinese-themed property, the first ground-up casino hotel built in Las Vegas since the recession, is slated for foreclosure auction on February 6 after being slapped months ago with a default notice on the loan.
The loan was taken out by the resort’s developer, Andrew Fonfa, in the spring of 2016 and, according to news reports, was not mentioned in a press release sent out at the time and which described the boutique casino and hotel as “fully financed”.
Some $60 million of that financing came from investors looking to exploit the federal EB-5 visa program, which promises U.S. residency in exchange for a commitment of $500,000 or more in a U.S. business venture creating at least 10 full-time jobs.
It’s not known if the EB-5 funding is connected to the Fonfa loan, which was provided by an entity called Snow Covered Capital with links to San Francisco real estate investor Enrique Landa.
News reports citing the auction notice said $48.9 million is owed on the Fonfa loan.
The auction doesn’t necessarily spell the demise of Lucky Dragon, however; although the property has struggled to establish a clientele in the year since its opening and has been curtailing operations for months and shedding staff. The casino and the food and beverage operations that survived the earlier cuts were shuttered on January 4. The nine-story hotel is still operating.
