Hotel-casino abruptly closes

Wednesday, Jan. 9, 2002 | 11:16 a.m.

The Vacation Village hotel-casino abruptly closed Tuesday night, putting about 350 employees out of work and 66 guests scurrying for different accommodations.

Employees at the 315-room property at Las Vegas Boulevard South and Sunset Road said they have been told very little about the sudden closure, but some said it stemmed from a dispute between the former owner and the Las Vegas developer who acquired it in an auction in November.

Capital One LLC, owned by Shawn Scott, was the successful bidder in a U.S. Bankruptcy Court-approved sale. Scott beat 12 other bidders and agreed to pay $17.8 million for Vacation Village and its 24.9 acres of land.

Following the sale, Scott said he would "make every effort to keep Vacation Village open in the short term while developing a long-term plan."

That included operating the casino under a license held by the Heers family, the former owners of the property.

Following a court hearing Tuesday afternoon, Scott took possession of the property, but a long-term agreement for operating the casino isn't in place. Scott, formerly licensed to operate casinos in North Las Vegas and Henderson, no longer has a license, state Gaming Control Board officials said today.

Regulators said Scott relinquished his license in 1997 after his Cheyenne hotel-casino at Interstate 15 and Cheyenne Avenue was criticized for faulty accounting practices. Control Board officials said Scott has not applied for relicensing.

Scott could not be reached for comment today.

Tuesday night, managers began cordoning off the casino, which has 700 slot machines and 10 table games. Control Board agents took possession of the casino cage, a standard procedure during casino closures.

Agents supervise closures to make sure casinos have enough cash available to cover gamblers' winnings. The Vacation Village cage normally had about $300,000 on hand, said Jim Norcott, a member of the board of directors at Vacation Village.

Norcott said the property closed after negotiations broke down between the Heers family and Scott. He said the Heers had proposed leasing back the property, but those talks failed.

The sudden closure took many guests by surprise, but local entrepreneurs had already begun taking advantage of the closure this morning.

Guests who had checked into the hotel were allowed to stay Tuesday night, but were ordered out by noon today, and equipment vendors were told to start removing their property, employees said.

The 66 guests were being placed this morning at other hotels.

Roberta DeFraga, manager of the La Quinta Hotel at Valley View Boulevard and Tropicana Avenue, was at Vacation Village this morning encouraging guests to stay to her business.

"I just heard about it on the radio and I thought all of these people had no place to stay," DeFraga said. "So, I came down here and spoke to the assistant manager and told them that I had 35 rooms available."

A spokeswoman for the state Department of Employment, Training and Rehabilitation said the closure did not fall within the federal Workers Adjustment and Retraining Act.

The WARN Act requires companies to notify workers of impending closures, but the Vacation Village closure doesn't apply because the closure occurred because of an unforeseen act, said Karren Rhodes, public information officer for the department.

Vacation Village filed for Chapter 11 bankruptcy protection in November 2000 after it was sued by Wells Fargo Bank subsidiary Foothill Capital Corp., the hotel-casino's largest creditor, for failing to repay a loan debt. Foothill sought $24 million plus interest in the suit.

The hotel defaulted on a one-year $19.4 million loan with a 14 percent interest rate that had come due on Sept. 14, 2000.

Sun reporters Grace Leong, David Strow and Richard N. Velotta contributed to this report.