Regent vows to stay open while renegotiating loans

Friday, Dec. 29, 2000 | 10:47 a.m.

Owners of the Regent Las Vegas hotel-casino are being allowed to renegotiate their debt financing and say the resort will stay open while operating under Chapter 11 bankruptcy protection.

Meanwhile, a surge in customers has improved cash flow for the property at Summerlin Parkway and Rampart Boulevard.

Interviewed on "DayONE Las Vegas" on Las Vegas One Wednesday, Lanis O'Steen, chief restructuring officer for the company and a member of the company's board of directors, said the U.S. Bankruptcy Court gave the company the opportunity to renegotiate its debt because the terms were "too severe."

A scheduled meeting of creditors Wednesday was postponed by the court until Jan. 23 and another hearing on collateral and debt financing is planned Jan. 9 before Judge Robert C. Jones. Both were postponed due to holiday conflicts.

Resort at Summerlin LP, the partnership that opened the $270 million property in October 1999, filed for bankruptcy protection Nov. 20 this year, listing assets of $296.4 million and liabilities of $365.8 million. The largest creditor is John Hancock Financial Services Inc., which is owed about $30 million.

In February, the Regent and its general contractor, J.A. Jones Construction Co., filed suits against each other in U.S. District Court. The Regent's suit, seeking $200 million in compensatory and punitive damages, blamed J.A. Jones and two subcontractors for delaying the opening of the resort, a reason cited for the bankruptcy.

The Jones countersuit seeks $28 million in compensatory damages for unpaid work. Both cases are pending.

"I feel it was a mess from the beginning," O'Steen said.

O'Steen said the property was "in a pretty deep hole from the beginning," but the court's allowance of the renegotiated financing will enable the company to reorganize and pay off creditors.

O'Steen said the company is gearing for a New Year's Eve bash at the casino and has begun negotiating with shops and clubs to beef up the property's retail component.

The September opening of the Suncoast hotel-casino just south of the Regent property has worked in the Regent's favor, O'Steen said, because it has drawn traffic to the area. Customers have visited the Suncoast for its theaters and bowling facility, but wander to the Regent for meals, O'Steen said.

Critics of the Regent have said it was unable to attract an upscale clientele away from the Strip and a locals market that looked upon the resort as too expensive.

But O'Steen said the recent surge in customers has resulted from the company paying more attention to the needs of locals.

"We represented ourselves as a five-star hotel and in so doing, neglected to pay attention to our local customers," O'Steen said. "We never extended a very strong invitation to them. But now we are. We've listened to them and it's shown some positive results."

O'Steen said one of the biggest new attractions has been the opening of a 24-hour coffee shop, which he said has had a strong customer response.