Tuesday, March 16, 2004
Copyright © Las Vegas Review-Journal
Proposed Castaways buyer gets extra time from Vestin
Partnership wants to review plans, secure financing for deal
By ROD SMITH
GAMING WIRE
Vestin Mortgage has granted the three-man partnership trying to buy the Castaways, shown here Monday, a 20-day extension to complete due diligence. The hotel-casino was closed Jan. 29.
Photo by Gary Thompson.
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The partnership of Randy Miller, Rich Gonzales and Rich Iannone, the group trying to buy the Castaways and reopen it as a hotel-casino, won a 20-day extension Monday from owner Vestin Mortgage.
The trio, owners of the Longhorn casino on Boulder Highway and the Bighorn casino in North Las Vegas, had signed an exclusive option Feb. 24 to buy the 49-year-old landmark property at 2800 Fremont St. near Boulder Highway.
Vestin spokesman Steve Stern said the March 15 deadline was extended to 6 p.m. April 4 to give the Miller group more time to complete its due diligence.
Miller said he and his partners want to review plans for expanding the Castaways, get full reports back from subcontractors and vendors, and make sure they have appropriate financing in place before entering a final sales agreement.
"We haven't found any reasons yet to make it, so we aren't excited about buying the Castaways," said Miller.
He reiterated his confidence that the Castaways, formerly known as the Showboat, can be reopened and operated successfully, but said it needs operators who know the community and have experience here.
"There are a lot of considerations that go into making the decision. The added time will allow us to talk with architects that have plans for new designs and expansion of the Castaways, especially the public areas, and we want to explore our options," Miller said.
In addition, the interior will need substantial repairs and appropriate financing for the acquisition and expansion still has to be secured, he said.
While due diligence proceeds, more than 650 jobs remain in limbo for former Castaways workers put out of work when the casino closed Jan. 29.
Meanwhile, Vestin is still marketing the Castaways and getting continued interest from both gambling companies and commercial real estate interests, Stern said.
Vestin bought the bankrupt 25.9-acre property for $20.7 million Feb. 1 at a foreclosure sale after its bankrupt former owners were unable to satisfy terms of a $22 million-plus mortgage note.
The Castaways was closed Jan. 29 after Vestin, acting under authority of a U.S. Bankruptcy Court order, notified Castaways owner VSS Enterprises it would enter the casino and collect its collateral backing a mortgage loan.
No equipment has been removed from the property since bowling machinery and leased slot machines were removed under order of the U.S. Bankruptcy Court here, although Stern said it would not be surprising if vendors with security interests in leased equipment seek to remove it from the property.
