Herbst family quiet on bankrupt property

Wednesday, Aug. 18, 1999 | 11:39 a.m.

The Herbst family is staying mum on its plans for the Hotel Continental, which it's buying out of bankruptcy.

The 400-room hotel-casino on 10.5 acres at Flamingo and Paradise roads closed March 31 after owner American Realty Trust Inc. foreclosed on the property.

Attorney Sean Higgins said the Herbst family began negotiating to buy the property from American Realty in May. The purchase is expected to close in one to two months, he said, but he declined to disclose terms.

"We'll own it free and clear," said Higgins, general counsel for the family that owns the Terrible Herbst gas-station chain and has gaming investments in Coast Resorts Inc., which owns the Gold and Barbary Coast and Orleans hotel-casinos.

Higgins said plans for redeveloping the property are "up in the air," though a final option will be selected by the time the purchase closes. He didn't rule out a possible joint venture, noting "people have approached us" about such a strategy.

"'But you'll see construction right after we close," Higgins said. "We're trying to move forward as quickly as possible."

The Continental filed for Chapter 11 bankruptcy protection in February 1998. Its largest creditor, Crowne Gaming, was to take over the property, but Crowne also fell into bankruptcy and American Realty Trust foreclosed in April 1998.

American Realty agreed to lease the property back to Hotel Continental Inc. while it sought a new buyer. But that management team balked at a rent increase American Realty demanded last April, setting the stage for the hotel's closure. About 380 workers lost their jobs.