The much-anticipated billion Alon is on hold while American debt markets remain weak, Australian billionaire and project developer James Packer said.
Packer on March 2 told the Sydney Morning Herald he wants to obtain $1 billion in debt financing to help fund the $2 billion project, but he’ll have to put the entire plan on hold while awaiting improvements in the U.S. debt market.
Packer wants to build the Alon on the site of the former New Frontier Casino, which was torn down in 2008, leaving an empty lot that was supposed to be developed years ago. Unfortunately, the Great Recession put an end to those plans.
Although Packer says his plan is on hold, it hasn’t ended. He says he still intends to follow through on the project, and there is not timeline for completing it.
Packer controls Crown Gaming, which teamed with Oaktree Capital and Wynn Resorts Executive Andrew Pascal to buy the 35-acre site for $260 million in 2014.
Initial plans call for building a 1,100-room hotel with two towers, and Alon Leisure Management last summer filed necessary paperwork to obtain land entitlements for the various intended uses.
Crown Gaming initially bought a 73 percent stake in the Alon project, but Packer is shopping around for investors and wants to reduce Crown Gaming’s ownership interest to about 45 percent.
Packer wanted to open Alon in 2018, but that date clearly will be moved back as Packer and his partners wait for financial conditions to improve, making it easier to obtain debt funding for reasonable rates.
In the meantime, Crown Gaming says the property continues to appreciate in value, making it a near certainty Packer and his partners eventually will turn a profit, even if the Alon never opens.
