Aladdin to Sell Struggling Vegas Resort to Joint Venture
After months of negotiations, Aladdin Gaming has agreed Wednesday to sell its struggling Las Vegas property to a joint venture that will rename the mega resort Planet Hollywood Hotel & Casino.
Planet Hollywood International’s co-founder and chief executive, Robert Earl, Starwood Hotels & Resorts Worldwide Inc., and Bay Harbour Management of New York agreed to buy the Aladdin Resort & Casino and to invest heavily in the property, company executives said. The deal was valued at about $635 million.
“We’ve dealt with a lot of different people,” Aladdin President and acting CEO Bill Timmins said. “This is the entity that we wish to go forward with. This has been going on for quite a long time.”
As part of the deal the new owners will assume $510 million of the Aladdin’s debt and other liabilities. The partners also will invest $90 million in the property. The deal requires approval by a bankruptcy judge who could allow other companies to bid.
Court filings indicate that secured creditors, including a bank group, lenders led by General Electric Capital Corp. and the official unsecured creditors committee supported the deal.
The 2,567-room Aladdin opened in August 2000 and filed for Chapter 11 protection in September 2001.
The deal includes buying the $35-million Northwind Aladdin power plant on the Aladdin property that provides the hotel-casino with hot and cold water and a backup generator.
The company agreed to retain all 2,600 current employees.
Planet Hollywood of Orlando, Fla., has agreed to exhibit various movie and television memorabilia, company officials said.
Starwood, through its Sheraton brand, will manage hotel operations.
Bay Harbour helped provide financing.
Earl said the Arabian Knights-themed casino would change its identity.
“There will be a complete new look to the facade,” he said. “There will be significant construction to the property and improved entryways.”
Earl said investors think the project will be profitable.
“We’ve spent seven months on a very complex negotiation,” he said.
“Everyone I’ve presented the concept to has been excited. All the creditors like the concept and liked the new management. I think with the new theme and the completion of the project, I’m confident we will be able to increase the traffic flow.”
Mike Mecca, former general manager of the Green Valley Ranch hotel-casino outside of Las Vegas, will serve as president and CEO and oversee gambling operations.
“I think Planet Hollywood Casino will bring to Las Vegas yet another spectacular attraction,” Mecca said. “I think our neighbors will be thrilled that Planet Hollywood is joining the group.”
The purchase does not include the adjoining Desert Passage Mall, which is owned by Aladdin Bazaar.
