The Ritz-Carlton Lake Las Vegas, a five-diamond hotel at the troubled resort community in Henderson, told its 340 employees Monday that it will close on May 2.
Transcontinental Corp. opened the 349-room hotel in 2003, but Deutsche Bank took over ownership of the property last year through an affiliated company called Village Hospitality and decided to stop funding the resort.
"The unprecedented economic downturn has had a significant impact on the hotel's operations. As a result, Village Hospitality LLC concluded that continuing to fund operations was no longer economically viable and consequently decided to close the hotel effective May 2, 2010," Assistant Vice President Scott Helfman said in a statement.
"The entire Las Vegas region has been financially impacted, probably more than any other region in the United States," said Vivian Deuschl, corporate vice president of Ritz-Carlton, which operates the hotel.
She pointed to a decline in individual visitors and an even bigger drop in group business.
"It's not a reflection on the hotel," Deuschl said.
The Ritz-Carlton is one of eight Southern Nevada hotels with AAA's highest five-diamond rating for 2010.
The workers have excelled in their work, she said. "This is a very sad day for them. It's a sad day for all of us."
The hotel has two restaurants and a spa, but two of the golf courses at Lake Las Vegas have been shut down during the luxury community's Chapter 11 bankruptcy proceedings.
A local developer, who spoke on condition of anonymity, said he was offered an opportunity to buy the Ritz-Carlton for $20 million but summarily rejected it.
The Ritz-Carlton Lake Las Vegas filed for reorganization in 2008 to avoid foreclosure.
The closing of the Ritz-Carlton is the latest in a string of troubles for the 3,600-acre resort community, which is built around a 340-acre man-made lake.
Actor J. Carlton Adair acquired the land and rights to 10,000 acre-feet of water in a transaction with the federal government in 1966.
Transcontinental Corp., which is owned by Ron Boeddeker, began development on the land in the 1990s. Other investors included Sid and Lee Bass, the billionaire Texas brothers.
Critics said the project was ill-conceived in part because of its location 14 miles from the Strip.
The community has a second hotel, the 493-room Loews Lake Las Vegas, which is still operating, but Lake Las Vegas has no grocery store. The nearest schools are in a working-class neighborhood of Henderson. The only gambling at the community is at the Casino MonteLago.
Singer Celine Dion and her husband, Rene Angelil, bought a home on the lake shore for $1.2 million in 2002.
In 2004, the community owners pulled $470 million from Lake Las Vegas, representing a large portion of money borrowed from a group that included Credit Suisse.
In January 2008, the previous owners turned over the project to a group led by Frederick Chin. In July of that year, the new owners filed for Chapter 11 bankruptcy. Bankruptcy Judge Linda Riegle approved a post-bankruptcy loan from Credit Suisse, Goldman Sachs Asset Management, Lehman Bros., Guggenheim, Hartford Insurance and others so that Lake Las Vegas could continue operations.
At one point, a bankruptcy attorney said he feared the 7-foot-diameter drainage pipe that runs underneath the lake could rupture and turn the lake into a smelly, mosquito-ridden swamp. Repairs were made to the drainage structure during the bankruptcy proceedings.
Riegle is scheduled to hold a hearing on Feb. 16 to discuss a document that outlines the plan of reorganization for Lake Las Vegas. Creditors will vote on the plan, and the judge will hold a second hearing on April 13.
Ritz-Carlton Hotel Co. is a separate division of Marriott International.
Employees at the Lake Las Vegas hotel were told of the closing Monday. Hotel officials said they will try to place all of the resort's workers at other Marriott hotels or other local properties.
Contact reporter John G. Edwards at firstname.lastname@example.org or 702-383-0420.