Thursday, April 2, 1998 | 10:10 a.m.
The new Venetian casino/hotel and its adjacent Sands Convention & Expo Center will generate 10 million room nights annually but be able to accommodate only a 10th of that number, boosting business for other Las Vegas hotels, Las Vegas Sands Chairman and Chief Executive Sheldon Adelson says.
Adelson, speaking before the state gaming control board Wednesday, described the Venetian's advance bookings as "fantastic."
Adelson's comments came at the end of a presentation by other Venetian officials touting the new resort. Venetian President William Weidner told Control Board members the "first and largest phase of The Venetian's master-planned development" will include 3,036 hotel suites, a casino, restaurants, upscale retail shopping and 1.6 million square feet of meeting and convention space -- all under one roof.
Weidner also described some of the Venetian's construction secrets. For instance, the large marble-like statues that will grace the Venice-themed resort will actually be carved from blocks of foam, he said.
The board approved conversion of a portion of the debt that's financing construction of the resort to publicly tradeable securities.
If confirmed by the Nevada Gaming Commission, the Control Board's action will allow Las Vegas Sands Inc. to swap privately held notes for identical securities that can be bought and sold by public investors.
As part of its $923 million in debt financing for the first phase of The Venetian, LVS sold $425 million of 12.25 percent first-mortgage notes and $97.5 million of 14.25 percent senior subordinated notes to institutional investors.
Once registration statements have been filed with the Securities and Exchange Commission and the Gaming Commission approves the transaction, the notes will be available for public trading.
LVS, wholly owned by convention magnate Adelson, also arranged a $150 million bank credit facility, a $140 million construction loan for a shopping mall and about $100 million in equipment financing. Adelson put up $95 million cash and $225 million in unencumbered real estate to complete the $1.2 billion financing for the first phase of the resort.
Adelson financial aide David Friedman said The Venetian's financing package features a blended interest rate on the total debt of 10.5 percent, "which we believe is the lowest total cost of financing for any new Strip project."
Adelson said the Venetian is on schedule for an April 1999 opening.
The board also acted on a number of other gaming issues:
--Approved a nonrestricted gaming license application filed by a number of investors to buy and operate the Exchange Club casino in Beatty. The approval was contingent on the withdraw of investor Kent G. Snyder from the project.
Board members were concerned about Snyder's past association with reputed drug smuggler Peter Combs. While living in Southern California in the early 1970s, Snyder served as Combs attorney, helping him set up off-shore corporations, and as his friend, going so far as to buy a house specifically for the purpose of renting it to Combs.
Officials said Snyder also served as errand-boy to Combs, taking time out from a European vacation to fly to Vienna, Austria, to tell a Combs associate to return to California.
Snyder said he was Combs attorney only, denying that he was ever involved in Combs' drug-smuggling operations.
"I denied those allegations in 1974 and I deny them now," he said.
Board members said their concern was not so much that Snyder was involved with Combs, but that he had not fully disclosed the association to the board.
"Mr. Snyder has a very selective memory here," said board member Steve DuCharme.
Snyder would have owned 13.3 percent of the Exchange Club. Other investors include Roger Allen De Young and Roger Allen De Young Jr., Douglas Ayres De Young, Wendy De Young Gerdau, Douglas Ayres De Young and Cathryn Brogan De Young.
--Approved a waiver for Fidelity Management & Research Co., one of the largest institutional holders of gaming stocks, of a regulation limiting ownership of securities of casino companies by passive investors to 10 percent. The board approved a 15 percent threshold, and said Fidelity can hold securities for up to two years, both without the necessity of applying for a gaming licence.
--Granted a two-year conditional license to long-time Northern Nevada gaming executive Bob Cashell to continue operating the financially strapped Ormsby House hotel-casino in Carson City.
Since assuming control of the property, which is in bankruptcy reorganization, Cashell has reversed several months of losses and told board members he expects positive cash flow for the Ormsby House from April through November.
Between now and then, Cashell plans to re-build a $1 million credit line, which has been drawn down to $230,000. By November, the line will be back to $700,000 or more, allowing the property to weather the normally slow winter months, Cashell said. This year, though, a legislative session in the state capitol could help ease the seasonal downturn.
--Approved American Wagering Inc.'s plan to acquire Imagineering systems Inc., a Reno-based keno equipment supplier. The purchase price wasn't disclosed.
--Approved a limited 18-month license for International Sports Wagering Inc. to operate an inter-casino linked system. ISW's SportXction system is an interactive personal computer-based wagering system.
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