Vegas Hard Rock Teeters Near Foreclosure

The Hard Rock in Las Vegas could face foreclosure if its owner, a subsidiary of Brookfield Asset Management, does not make a March interest payment on time.

Owner needs cash influx or restructuring

The Hard Rock Hotel & Casino in Las Vegas is scrambling to make a March mortgage interest payment and thus sidestep foreclosure.

The Hard Rock is now owned by Bref, a division of Brookfield Asset Management, and managed by a subsidiary of Vegas-based Warner Gaming. Affiliates of Brookfield Financial formed Bref in early 2011 to buy the interests of HRHH JV Junior Mezz LLC, owner of the Hard Rock, according to Mergers & Acquisitions. HRHH’s interests went to Bref in lieu of foreclosure after the company defaulted on a mortgage loan provided by Brookfield.

According to a report in the Sioux City Journal, in 2011 the company entered into a second mortgage loan agreement with Brookfield for $30 million. But in a December 23 filing with the U.S. Securities and Exchange Commission, the company raised concerns that it will not have the funds to meet an interest installment due March 1.

“Bref’s ability to continue depends on restructuring debt, obtaining additional financing or securing lender approval to use available cash reserves to make the interest payment,” according to the filing. “If the company misses the payment, the lender has the option to accelerate the loan, which could result in foreclosure.”

Sioux City Entertainment, also a Warner subsidiary, is in the process of developing the $128.5 million Hard Rock Hotel & Casino Sioux City, reports the Journal. Construction on the project should be complete late this summer.

The Hard Rock Las Vegas and Hard Rock properties west of the Mississippi are owned/branded by Bref. Anything east of the Mississippi or elsewhere in the world is owned/managed by the Seminole Tribe of Florida, which has held intermittent meetings with the various owners of the Hard Rock western properties talking about purchasing the group to no avail.