Wrestlers put up deposit for LV resort

John Wilen

Tuesday, Aug. 11, 1998 | 11:10 a.m.

A joint venture headed by the World Wrestling Federation wired $1.63 million to a Las Vegas escrow agent Monday, solidifying its offer to buy the bankrupt Debbie Reynolds hotel-casino.

"The WWF people put up their money today," said Lenard Schwartzer, attorney for the Debbie Reynolds operating company.

The money, together with $500,000 the WWF posted to qualify for last Wednesday's public auction of the property, is a deposit equal to 20 percent of the $10.65 million the WWF bid for the Debbie Reynolds in bankruptcy court Thursday.

Friday, Florida time-share developer David Siegel wired his own $500,000 to the escrow agent, laying claim to the backup bidder position for the resort. If the WWF should fail to close on the Debbie Reynolds by Aug. 20, Siegel will have an opportunity to buy the resort for $10.55 million.

"Siegel put up his $500,000 on Friday," said Schwartzer. "He somewhat would like to own the hotel."

But Siegel did not want the hotel bad enough to better the WWF offer.

"I went as high as I wanted to go," was Siegel's explanation last week.

At Wednesday's auction, the WWF bid $9.2 million for the Debbie Reynolds and most of the personal property inside the resort, which was auctioned separately. But some of the resort's creditors protested the WWF bid in bankruptcy court Wednesday afternoon, arguing they were not getting enough of their money back.

Liens against the Debbie Reynolds total $11.5 million.

By Thursday morning, the WWF had increased its offer to about $10.16 million, satisfying most creditors. Unsatisfied, however, was Siegel, who put $250,000 into the Debbie Reynolds earlier this year to keep it running while his earlier $14 million offer was processed. That offer was eventually rejected, but Siegel never got his money back.

Angry about those events and the fact that the WWF's new offer was still insufficient to repay him, Siegel bid against the WWF in bankruptcy court Thursday. When the WWF's offer reached $10.65 million, Siegle stopped bidding, but still promised to wire $500,000 to ensure his $10.55 million offer became the official backup offer.

Siegel replaces Full House Resorts Inc. as backup bidder on the resort. Full House, a San Diego company with casinos in South Dakota, Mississippi and Oregon, bid $8.4 million for the resort.

If Siegel had not wired his $500,000 Friday, the WWF's offer would have reverted to $10.16 million, and Full House would have remained the backup bidder. Now, Full House, owned in part by California entrepreneur Allen Paulson and former auto industry executive Lee Iaccoca, will get its $500,000 deposit back and be out of the running for the Debbie Reynolds.

Even at the higher price, Siegel will not recoup his $250,000 investment.

"He's not getting his money at this price," Schwartzer said.

WWF officials Monday said they still have not decided exactly what they will do with the property.

"The transaction happened so fast that we're just sort of coming off this week and focusing on closing," said Ed Kaufman, senior vice president and general counsel of the WWF.

The Debbie Reynolds is actually being purchased by a joint venture of the WWF and the Parkview Group LLC, a Cleveland investment group. The WWF is itself a subsidiary of Titan Sports Inc., of Stamford, Conn. The WWF owns 51 percent of the joint venture; Parkview owns 49 percent.

Principles in Parkview Group include George Simon, a Cleveland restauranteur, and Bob Risman, a Cleveland real estate developer. The WWF last year licensed worldwide rights to WWF-themed restaurants to the Parkview Group. The Debbie Reynolds property will be the WWF's first foray into the hospitality industry.

The resort will bear a WWF-theme, but the joint venture partners have not yet decided exactly what that theme will include. The property has 193 hotel rooms, and a 500-seat showroom. It sits on 6.1 acres, much of which is unused.

Also undecided, Kaufman said, is whether the resort will close during renovations.

"That depends on the significance of the renovations," Kaufman said.

WWF and Parkview officials will meet this week to discuss plans for the property, and whether renovations can be done piecemeal or require a closing. Whatever the plan, the joint venture will fully honor the property's 1,000 time-share agreements, Kaufman said.

The Debbie Reynolds currently employs 20 people.

The joint venture is also studying what to do about the resort's gaming license, Kaufman said. The Debbie Reynolds property has a "grandfathered" gaming license that allows operators to provide gaming even though the resort does not have the 300 rooms required by recent regulations.

The property's 25 slot machines are operated under lease by Capado Gaming. The joint venture partners have not yet determined whether to seek a license to operate the property themselves, Kaufman said.

"It's too soon," he said. "It's a new business for us."

Kaufman is sure the property will do well with a WWF theme, despite the fact that the last two operations there -- the Paddlewheel and the Debbie Reynolds -- failed.

"We have a lot of fans in Las Vegas and a lot of fans that visit Las Vegas," Kaufman said.

With thousands of fans worldwide to draw from, the WWF anticipates no problems attracting people to the resort.

"We're not the Paddlewheel or the Debbie Reynolds," said Kaufman.