No deal made yet for D.I.

David Strow

Thursday, April 27, 2000 | 11:09 a.m.

David Strow

The owner of the Desert Inn said today it's examining all bids for the Las Vegas Strip property, even as rumors heat up that Steve Wynn is on the verge of striking a deal to buy the 50-year-old resort.

Dan Gibson, spokesman for Starwood Hotels & Resorts Worldwide Inc., acknowledged Wynn is among the interested buyers.

"But we have a number of other good (offers)," Gibson said. "There is a lot of interest. At this point, no deals have been signed."

Mark Advent, the hotel designer and developer competing with Wynn for the D.I., also said this morning that the battle for the property isn't over, saying he was in contact with Starwood officials Wednesday and hoped to speak to Starwood Chairman Barry Sternlicht by telephone today.

"It is not a done deal with anyone," Advent said. "Starwood has a fiduciary obligation to shareholders to thoroughly explore all credible offers. It's my understanding, as of this morning, that no final decision had been made.

"I'm hoping to meet with Barry as early as next week."

Sternlicht is traveling in Europe, Advent said.

"I would think the decision will happen within one week," Advent said. "By next Friday, someone will be under contract."

However, sources close to Wynn continue to say that the outgoing Mirage Resorts Inc. chairman remains by far the favorite.

This would suggest that Wynn has already received the blessings of Mirage Resorts' board to proceed with the Desert Inn buyout.

"The only thing left to happen is for the Starwood board to meet, and say, 'we accept (Wynn's offer),' " a source said.

If a deal was struck, the source said it is likely it would include a provision that Mirage Resorts would acquire the Desert Inn if Mirage's merger with MGM Grand Inc. fell through. Mirage has apparently examined the land before, but decided not to seriously pursue it, since it already had land south of the Bellagio for future development.

"For Mirage Resorts, it would make sense," the source said.

The speed with which Wynn closed in on the property surprised many, given that he first toured the property only 12 days ago.

"When this guy makes up his mind to do something, he does it incredibly quickly," a Wynn colleague said. "It's my understanding they (Wynn and Starwood) pretty much cut a deal, that his cards are on the table."

Irwin Molasky, Wynn's partner in the Park Towers condominium project, was helping lay the groundwork for a Wynn acquisition of the Desert Inn on Wednesday.

Molasky said he met with about 50 homeowners who reside on the Desert Inn golf course. Molasky said he offered to buy the homes at a 5 to 10 percent premium over their highest appraised value if Wynn acquired the D.I. Molasky would then flip the homes to Wynn.

"I asked Steve if he'd consider buying these homes, and he said, 'I will pay above market, but not unrealistic prices,"' Molasky said. "Those who did not want to sell would not have to. He would not go back to the people who did not want to sell."

Molasky said he would not be involved with the long-term development of the land acquired. "I'm just a friend, doing him (Wynn) a favor," he said.

Starwood is currently attempting, in federal court, to win the right to develop high-rise timeshares on the golf course -- a development that would dramatically increase the revenues produced by the Desert Inn. Currently, this is prohibited by the homeowners association's covenants with the resort.

Wynn hasn't determined what he would do with the parcels, but Molasky said it would not be high-rise timeshares.

"That was a stupid idea," Molasky said. "Nobody knows ... we're just talking about ideas now."

Separately, rumors that Wynn had a second partner in his Desert Inn plans -- famed Hollywood director Steven Spielberg -- were quashed Wednesday.

"(Wynn and Spielberg) have known each other for a lot of years," said Marvin Levy, spokesman for Spielberg. "(But) they have nothing they're doing together."

Meanwhile, Wynn's competitor provided more details on his plans for the Desert Inn -- and how he intends to sweeten the offer for Starwood.

Part of Advent's plan for the property involves significant time share developments. Advent said he is inviting Starwood to participate in a time share joint venture through Vistana, Starwood's time share subsidiary.

"Starwood-Vistana is one of the leading time share developers in the world," Advent said. "Another component of our offer is to participate with Starwood on an extensive time share development plan."

Advent also plans to build a "large scale megaresort complex" on the 32-acre vacant site next to the Desert Inn, should he acquire the property -- though Advent said he doesn't plan to reveal the scope or theme of this project for about 45 days. Advent said he'd allow Starwood to have branding rights on this development.

"There are some major names in the world associated with this project," Advent said. "I firmly believe our offer presents significant shareholder value."