New deal announced for sale of Maxim

By Liz Benston (contact)

Monday, Sept. 9, 2002 | 11:13 a.m.

A Cincinnati-area owner and operator of hotel franchises said it has purchased the vacant Maxim Hotel & Casino near the Las Vegas Strip for approximately $38 million.

Columbia Sussex Corp., which last week said it purchased the Maxim under the entity C.P. Las Vegas, has signed an agreement with the Westin hotel chain to open an upscale Westin-branded hotel at the 800-room property. An attached casino will serve as an "amenity" rather than a main feature, said Joe Yung, the company's director of development.

Fort Mitchell, Ky.-based Columbia Sussex is a family-run enterprise that owns about at least 50 major hotel franchises nationwide. They include upscale brands such as Marriott, Hilton and Crowne Plaza.

The company also runs the Horizon hotel-casino in Lake Tahoe. It expects to bring in the management company that runs the casino there to manage the Maxim casino, Yung said. Yung declined to reveal what the renovations could cost. They will include peeling off the hotel's glass exterior and replacing it, he said.

The company expects to begin a nine-month construction process next month for a possible opening next year. The company has high hopes for the troubled property.

"Our philosophy for this property is that we're redeveloping a hotel with a very small casino component, where everyone prior to us has tried to develop it as a casino hotel," Yung said. "We certainly feel that the market is there for the hotel rooms in that location."

The property will target tourists and convention-goers along with other Strip hotels, but will also draw from individuals making business trips to office parks such as the nearby Howard Hughes complex on Howard Hughes Drive, he said.

Las Vegas hotel broker David Atwell said the company seems like a good fit for the Maxim, given Columbia's affiliation with the Horizon, a property roughly the size of the Maxim that was successfully remodeled. "They will probably be successful in Las Vegas with the proper flag." Houston seller Revanche LLC could not be reached for comment.

C.P. Las Vegas had eyed the Maxim before the terrorist attacks of Sept. 11, which put those plans on hold while another potential buyer came and went, said Jack Carr, a managing director for hotel brokerage Insigna/ESG Hotel Partners in New York. The company, attracted by the Maxim's proximity to the Las Vegas Strip, recently renewed its interest in the property, he said.

The hotel-casino, located two blocks east of the Las Vegas Strip on Flamingo Road, has a troubled history.

The property opened in 1979 but fell in and out of bankruptcy several times under various owners.

One of the more recent owners, Dallas-based Premier Interval Resorts Inc., declared bankruptcy in 1999. Premier and its casino operator then sued each other over allegedly unpaid rent and unfulfilled promises of financing.

Revanche, which never received a Nevada gaming license to operate a casino, later bought the Maxim. The property has a 32,000-square-foot casino floor as well as dining and recreational amenities.

The hotel-casino closed in 1999. The hotel portion later re-opened, then closed again in August 2000.

In December 2001 it was reported that Revanche had agreed to sell the property for less than the $42 million it paid. That deal, involving a Los Angeles hotel investor as a buyer, apparently fell through.

Another deal this year, involving Studio 54 founder Ian Schrager as the buyer with a price of $38 million, also fell through.