Four Queens sale OK’d

Thursday, April 4, 2002 | 11:09 a.m.

CARSON CITY -- Terry L. Caudill, who is buying the Four Queens hotel-casino, is high on the business potential of downtown Las Vegas even as he admits it "will not be easy to attract" customers.

The state Gaming Control Board on Wednesday gave preliminary approval to the sale.

Caudill noted that new government and private office buildings are being constructed downtown, along with housing.

"I'm impressed with the support by city officials, Mayor Goodman and the council," he said. "There is not a city administration more dedicated to the revival of a downtown area."

Caudill, who runs 15 video poker bars in Las Vegas, is paying $22 million for the hotel-casino, plus assumption of an estimated $4 million in debt from the Elsinore Corp.

According to documents filed with the state Board of Equalization, the Four Queens produced $4.6 million in net income last year. It was originally valued on the property tax rolls at $45.5 million, but the Clark County Board of Equalization reduced that to $35.5 million. The business is asking the state Board of Equalization to reduced it further, to $28 million.

Caudill's lawyer Bob Faiss said his client will "bring new energy to Fremont Street."

Caudill started as a dice dealer at Harrah's in Reno, became a certified public accountant and then served as corporate vice president and chief accounting officer of Circus Circus Enterprises Inc., leaving that company in 1994.

He owns a string of businesses in Clark County including Magoos, Loose Cabooses, Chicago Brewing Co. and Hurricane Harry's.

Caudill said Best Choice Mortgage would provide "bridge" financing for one or two years and then provide permanent financing when it sees a satisfactory operating history. The Control Board told Caudill to have the loan documents filed by the April 18 meeting of the state Gaming Commission in Carson City.

Caudill said he intends to retain 100 percent of the staff and added the property has "been well run."

Control Board member Bobby Siller told Caudill he had a "captive audience" of downtown workers and he should take advantage of this in attracting them at noontime and after work.

The board also approved the application of Majestic Investor Holdings, LLC, owned by Don Barden, to register as a publicly traded corporation. Barden purchased Fitzgeralds in downtown Las Vegas last year from bankruptcy court for $149 million.

Mike Kelly, an officer of Majestic Investor, told the board that January business at Fitzgeralds was "soft" and the company operated at a loss. But he said the loss was made up in February and March and there was a "positive cash flow" at the property.

The board also:

Approved Las Vegas auto dealer James Marsh to take over Tonopah Station in Tonopah, which has been closed. Marsh said the hotel-casino is being renovated and he hopes to open by the end of the month. He will have 77 slot machines, two blackjack games and one craps table. Marsh said Tonopah has "been going downhill," with the population dropping from 4,000 10 years ago to 2,600 now. But he said he will try to affiliate with Ramada Inn in hopes of drawing motorists driving through the central Nevada town.

Approved John M. Sullivan to be vice president, secretary and general counsel at Las Vegas Dissemination Company and to hold a distributor's license to promote a new jackpot payout game for bingo. Sullivan told the board that bingo games in various clubs would be connected and there would be "progressive jackpots" offered to the players. He is associating with a company called Planet Bingo that developed the device.

Approved Robert A. Vannucci as president and chief operating officer at the Riviera on the Las Vegas Strip.

Granted a waiver to Fidelity Management and Research Co., which manages mutual funds that buy stock in Nevada casinos. Regulations prohibit institutional investment companies from owning more than 15 percent of the stock of a casino. Sometimes a casino company will buy back some of its stock and Fidelity will end up holding more than 15 percent of the outstanding shares. The board agreed Fidelity could hold up to 19 percent but gave the company a year to sell off the stock to reduce the interest to 15 percent.

Recommended a license for Allan Fiegehen and Donald Lehr, both of Carson City, to convert the first floor of the garage at the Ormsby House hotel-casino into a club with 125 slot machines and a bar. Fiegehen and Lehr are doing an extensive remodeling at the Ormsby House, and it won't be open at least until July 2003. In the meantime, the two want to open their gaming operation across the street from the hotel-casino.