Texas hotelier joins Regent bidding

David Strow

Wednesday, Sept. 19, 2001 | 10:56 a.m.

A prominent operator of upscale hotels has emerged as one of the bidders for the bankrupt Regent Las Vegas hotel-casino.

Omni Hotels Corp. of Irving, Texas, submitted a $91 million offer for the Summerlin resort, set to be sold in court Sept. 25. Omni's partner in the bid is Peccole Nevada Corp., a Las Vegas real estate development company that withdrew an earlier $150 million bid after it broke up with Heller Financial Inc. of Chicago.

The Omni-Peccole bid is one of three received by Regent officials Tuesday evening, the deadline by which potential buyers must make bids on the property. These bidders will compete with Larco Investments Ltd., a Canadian owner of resort properties and shopping malls, that was designated the preferred bidder just days ago with an $80 million offer.

The other two bidders are American Property Management of San Diego and Winecoff Hotel LLC of Beverly Hills, Calif. Lanis O'Steen, chief restructuring officer of the Regent, said he knows little about American Property Management, other than it is an owner of a number of hotels. American Property Management offered $85 million.

And O'Steen said he had no information on Winecoff. It claims in its bid to be a Nevada corporation, but the Nevada Secretary of State's office has no record of such a company. Even the value of its bid isn't clear yet, O'Steen said.

"We haven't been provided with any due diligence (by the bidders)," O'Steen said. "That's part of the job we have ahead of us in the next few days."

Omni, on the other hand, is a prominent hotel operator. The privately held company owns and operates 31 upper-end hotels in the United States, Canada and Mexico, and has eight more hotels franchised to third-party operators. In addition to hotels in such major cities as New York, Chicago, Atlanta, Los Angeles and San Francisco, the company owns and operates a golf and spa resort in Tucson, Ariz., and two beach resorts in Mexico.

Peccole, meanwhile, is a well-known developer of shopping centers and upscale residential and commercial developments in the Las Vegas area.

The two companies don't intend to operate the casino, and have not designated a casino operator yet. They would temporarily lease the casino to the Regent's current owner -- a subsidiary of Seven Circle Resorts -- while a licensed operator was secured.

Other potential bidders that had been rumored, but had not emerged as of this morning, included Coast Resorts, Station Casinos Inc., Arizona Charlie's and Stratosphere owner Carl Icahn, Silverton owner Ed Roski Jr., Starwood Hotels and Resorts Worldwide and Desert Inn owner Steve Wynn.

Although the deadline has now passed, it is possible further bids could be received, O'Steen said.

"My suspicion is if someone comes in with an overbid and they ask the court for leniency (because of recent events nationally), they'll probably get it, in terms of meeting the deadline," O'Steen said. "I expect some other bids to come in."

The Regent must now select one of the bids as the best offer for the property, and take that offer to bankruptcy Judge Robert Jones on Sept. 25 for final approval. At that hearing, bidders will have the opportunity to increase their bids in an auction process, though only companies that have submitted overbids will be allowed to participate.

There is another party that could take over the Regent in that hearing: the property's mortgage note holders. They are owed $110 million, and O'Steen said he believes they have the right to submit a credit bid for the Regent of up to that amount. The Regent's last preferred bidder, Los Angeles real estate company Maritz Wolff, withdrew its offer for the Regent after the mortgage holders refused to waive the right to make this credit bid.

"That (the right to credit bid) is subject to legal interpretation and subject to valuation," O'Steen said. "It can get complex."