Real estate, like almost anything else, is worth only what someone will pay for it.
As this week’s sale of the Lucky Dragon shows, the shuttered resort wasn’t worth anything close to what its developer or lender pegged it at.
Don Ahern, chairman and chief executive of Las Vegas construction equipment firm Ahern Rentals, acquired the Lucky Dragon for $36 million on Monday, property records show.
Ahern, who bought the failed resort from lenders nearly six months after they foreclosed on the property, said he plans to reopen it as a nongaming hotel and turn the former casino building into conference and convention space. He also plans to change the name.
The Lucky Dragon, 300 W. Sahara Ave., will be remembered for its fast flameout and failed attempt to capitalize on a coveted slice of Las Vegas’ tourism market — Asian gamblers. It was the first hotel-casino built from the ground up in Las Vegas since the Great Recession, and it shut down less than two years after it opened.
The property was sealed off with chain-link fencing in early October, but several months before that, the developers pushed the Chinese-themed resort into bankruptcy. Two wildly different valuations were given in court filings.
Lucky Dragon developer Andrew Fonfa’s group, citing an appraisal, said the off-Strip property was worth $143 million. But project lender Snow Covered Capital, an entity linked to San Francisco developer Enrique Landa, said it obtained an appraisal that valued the property at $60 million.
The 203-room resort — cozy by Vegas standards — could get visitors who don’t want to stay in a massive hotel on the Strip. But foot traffic outside seemed minimal to nonexistent even when the Lucky Dragon was open, and without a business there generating revenue these days, Landa’s group ended up selling the property for the price of an apartment complex.
It wasn’t for lack of interest. Yours truly received numerous phone calls from people saying they wanted to buy the Lucky Dragon. Listing broker Michael Parks, a hotel-casino specialist with CBRE Group, said it drew “by far” the most interest of any property that he and broker John Knott, head of CBRE’s global gaming group, have ever tried to sell.
“It was crazy,” Parks said.
His team got calls from “everywhere,” but almost all of them came from “dreamers” with no chance of closing a deal, Parks said. As he described it, callers often couldn’t show proof of funds.
“It was bizarre,” he said.
We’ll find out soon enough whether Ahern ushers in a brighter future at the hotel. He can only hope it doesn’t end a few years from now with a parade of wannabe buyers with empty pockets saying they want it next.