Regent picks Peccole as preferred buyer

Wednesday, May 23, 2001 | 10:54 a.m.

A prominent Las Vegas real estate developer whose focus has been in shopping malls and upscale residential properties has produced the best offer to buy the bankrupt Regent Las Vegas resort, the property's restructuring team said.

Lanis O'Steen, chief restructuring officer for the Regent Las Vegas, said initial information on a $150 million bid from Peccole Nevada Corp. was delivered to U.S. Bankruptcy Court in Las Vegas late Tuesday.

O'Steen said between now and June 18, more documents will be presented to the court along with the Regent board's recommendation.

The Peccole proposal -- known as a "stalking horse" bid -- would be a starting point for other bidding if the judge approves it next month. O'Steen said the judge would be presented the proposal June 18. After that, competing bids would be accepted for three to four weeks, he said, and then a hearing would be set for the final selection of a buyer. The process assures that creditors get the maximum return in the bankruptcy proceeding.

The Regent Las Vegas, a 461-room resort on Rampart Road near Summerlin Parkway, filed for Chapter 11 bankruptcy protection in December. The resort, owned by Swiss Casinos of America, opened in the summer of 1999, but never attracted the upscale crowd it was marketing for. Cost overruns and delays in the opening snowballed into $300 million in debts to creditors.

O'Steen's team shifted the marketing strategy to attract more local customers while keeping its upscale restaurants, spa and other amenities. It also opened a 24-hour coffee shop. The strategy appears to have paid off and the resort's finances have begun to stabilize.

"We believe this proposal is good for the creditors and great for our employees," O'Steen said of the Peccole bid in a statement today. "It requires that we continue to operate substantially as we operate now and that is good for both creditors and employees. We expect to continue a trend of improving results as we move forward with the bid process."

Peccole Nevada issued its own statement, but would not comment on specifics of the bid or the company's plans.

"The Regent Las Vegas is the premier off-Strip property in the valley," said Kent Barry, director of commercial development for Peccole Nevada. "With this offer, we look forward to playing a key role in its successful operation to the benefit of the employees, creditors and the local community.

"Due to the confidential nature of this process, we can provide no further information or comment at this time," he said.

Peccole Nevada was one of 10 bidders for the property, but O'Steen would not disclose the names of other bidders.

Peccole Nevada developed Peccole Ranch, the Canyon Gate Country Club and Queensridge upscale residential areas as well as the Charleston Plaza and Westland Mall shopping centers. It also has built the Nevada Financial Center, the Angel Park Firehouse and the Badlands Golf Club.

Late last year, the company announced plans for 300-unit "fractional ownership" nongaming resort on the northeast corner of its Queensridge property near the Badlands golf course.

Fractional ownership is similar to timeshare ownership, with buyers acquiring a larger percentage of time per unit.

The announcement of the unnamed development came on the heels of dissociation with Toronto-based Taurus Development on a luxury condominium project known as Versailles.

None of Peccole's resort ventures have gaming licenses and experts have speculated that the company would sell the casino at the Regent to another company or have an existing licensed company manage it.

"This seems more like a real estate opportunity for Peccole," said Andrew Zarnett, a gaming analyst with Deutsche Banc Alex. Brown. "I suspect they won't operate the casino, but they could turn it over to someone who knows how to run the hotel and the casino."

Station Casinos Inc., a company speculated to be among the bidders for the Regent and a possible casino management partner if Peccole doesn't hold onto it, had no comment on the selection of Peccole as the favored bidder.

Another prospective bidder, Carl Icahn, owner of the Stratosphere hotel-casino and the two Arizona Charlie's hotel-casino properties, has taken many bankrupt companies and turned them into profitable ventures. Icahn and his local casino management team could not be reached for comment today.

Representatives of the secured creditors committee and the lienholders on the property could not be reached for comment on Peccole bid today.