Breaking Vegas News: Harrah's buys the IP

[GreenDoberman]

It's official as of 1pm today, Harrah's purchased the Imperial Palace Hotel and Casino.


:finger:

 

[5teamparlay]

Interesting, knock the IP down 1st, then build a bigger and better Harrahs, i allways though why the biggest gaming company (arguably accross the wholeUS) had such a crappy flagship. Harrahs is decent but not up their with the biggies. it will be interesting to see what happens. The Casino Royale must have been targeted too.

 

[GreenDoberman]

Actually, geographically the Barbary Coast is the next target. I am unaware of any desire to buy the Royale and it's not needed in Harrah's "empire".

 

[5teamparlay]

Coast casino's are doing well I like the Orleans/ BC deal. Allthough maybe Coast casino's could give the BC a makeover. Love Vegas allways changing, keep us updated San Remo still open? New Frontier? Bourbon Street Plans? Any other plans out there.

 

[VegasMike01]

GD, thats actually funny, because when we were talking I asked you if IP was owned by Rio/Harrahs... remember?

 

[WildBill]

Amazing, GD and I spent 10 mins talking about this at the bash and what do you know? Maybe we are insiders after all and move markets...

 

[GreenDoberman]

Yeah, we had our suspicions but I guess it was closer than I thought. I figured it would be a few months away.

 

[tuleythetout]

This purchase certainly makes sense.

Coast has said it has no desire to sell the Barbary Coast (though, it's not a stretch to think they're just saying that to drive up the price since it's such a prime piece of real estate...they really can't go wrong with either selling now for a huge sum or waiting 5, 10, 20 years and just letting it appreciate).

5teamparlay...San Remo is still there, but it's being rethemed as a Hooters Casino (no joke)...Aladdin is being rethemed as Planet Hollywood Resort and Casino...haven't heard anything about Bourbon Street...New Frontier has long been rumored to be torn down and rebuilt as a San Francisco-themed resort (with replica Golden Gate Bridge, Alcatraz island, etc.) but nothing announced officially.

Let's see...what else?...Coast is building South Coast on south end of Strip...Stations is building Red Rock Station in the far west suburbs/Summerlin.

 

[winkyduck]

Let's see...what else?...Coast is building South Coast on south end of Strip...Stations is building Red Rock Station in the far west suburbs/Summerlin.

drove past both of these sunday. Sis lives near the Suncoast - this she lives near Red Rock. it is coming along nicely and i think she said it will be done in spring or summer. residents aren't happy for it takes away part of the view.

saw South Coast coming/going this weekend. wish them luck - that is awfully far out there but i guess they know more than i do (btw - driving home sunday - leave vegas around 6:30P - i am doing at least 80 all the way to Stateline when traffic stops. guess there were 3 bad accidents on my way home to "The O.C." - people need to know the 15 is a 2-lane "highway" most of the way from around Jean to Barstow and if you can't drive w/o causing an accident - take a plane and stay off the freaking road so you don't "F" it up for those of us capable of driving w/o making it a "contact sport").

by the way - Tuley - good seeing ya this weekend. you are a quality person in a town that has far too few of them

 

[Jarbo]

GD - How is this going to effect you ?



Hope it will be good.



Take care and great to meet you at The Bash.

 

[sherman]

I went to the Harrah's in New Orleans last month and HATED it....are they all that bad?

 

[Fishhead]

WOW, interesting news.

GreenDoberman--Will be down at the IP early this afternoon and be looking you up.

-Fish-

 

[GreenDoberman]

Fish,

I was around at work all day and left instructions with the poker room to call or page me if anyone came looking for me.

Jarbo,
As for how it is going to affect me, I don't know. I have tried to build the reputation of the room up by being generous in comps and providing value in our tournaments. Harrah's is not noted for their generosity in comps, so some things may be compromised. Whether I am there or elsewhere, I will still maintain my business and customer service sense.

 

[5teamparlay]

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</TD></TR><TR><TD vAlign=top><TABLE width="100%" valign="top"><TBODY><TR><TD>Imperial Palace Purchase Is Strategic Move For Harrah's
Aug 24, 2005
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Harrah's Entertainment Inc. has signed an agreement to purchase the Imperial Palace for $370 million, giving the company a larger foothold on the Strip and ownership of four adjacent casinos. Harrah's said Imperial Palace management will continue to operate the 2,640-room property until the transaction closes, which is expected by the end of the year. The property employs more than 2,000 people.



The company said it has "no plans for substantial operational changes" at the property in the near term. But some Wall Street analysts said it would make the most financial sense to tear it down and build anew, as new Las Vegas resorts can generate higher profit than older properties that cost millions to maintain.



Harrah's has accumulated enough land between its O'Shea's, Flamingo, Imperial Palace and Harrah's casinos to eventually redevelop something new, analysts said.



Spokesman David Strow said the company hasn't decided whether it will implode the property.



"We have a number of options for this location and we will look at all those options," he said. "Whatever we decide we will proceed with a project that takes full advantage of its potential."



Rumors about the company's interest in the Imperial Palace have circulated for years and intensified with the purchase of Caesars Entertainment Inc. in June. Imperial Palace is located between Harrah's Las Vegas and the O'Shea's and Flamingo casinos, both of which Harrah's acquired from Caesars. Also this year, Harrah's acquired the Bourbon Street, a small hotel and casino on eight acres behind the Flamingo, as well as a few acres adjacent to the property.



Across Flamingo Road from its Flamingo resort, Harrah's expects to redevelop and rebrand its Bally's Las Vegas property.



"The Imperial Palace is located in the heart of the Las Vegas Strip and between two casinos we own. This was a property we absolutely wanted to have and have wanted for some time," Strow said.



Harrah's has been jockeying for a larger presence in Las Vegas, where the company had previously owned only two resorts. The company continues to eye expansion opportunities in Las Vegas because business remains strong and is avoiding expansion in other states where casino taxes are high and regulations are more burdensome, executives have said.



In a research note to investors Monday, Bear, Stearns & Co. stock analyst Joe Greff speculated that the Imperial Palace site could be part of a "major redevelopment" of the Harrah's Las Vegas and Flamingo properties.



Greff said the purchase price represents "fair market value" of the land and said the Imperial Palace was likely generating from $5 million to $10 million in operating cash flow per year.



Another Wall Street analyst, who declined to be named, said the property may not have been generating much profit given that typical casino maintenance and capital expenditures can cost in the millions of dollars each year.



"It might be slightly more cost effective to quickly implode this thing," the analyst said.



The transaction included no debt. Analysts said the transaction valued the 18.5-acre site at $20 million per acre -- a going rate on the Strip.



The Asian-themed property, which is privately-owned, recently renovated its casino floor and had begun remodeling hotel rooms as part of a multi-million-dollar upgrade. Prior to Monday's announcement, the Imperial also was in the process of updating its signage, promotional materials and logo.



Calls to Imperial Palace management were referred to Harrah's. Owen Nitz, an attorney and Imperial Palace trustee, did not return calls by press time.



The Imperial Palace opened in 1979 and is known for its classic car collection, luau parties and "Dealertainers" -- card dealers who look and dress like celebrities. The often-overlooked property does little in the way of major marketing campaigns but has historically had high occupancy rates because of its location and relatively cheap rooms.



Imperial Palace owner Ralph Engelstad passed away in 2002, leaving the property to his widow, Betty, and a group of trustees. The sale did not include the Imperial Palace casino in Biloxi, Miss.

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