Nevada gaming commission approves restructuring at Resort at Summerlin

Friday, Dec. 19, 2003 | 10:55 a.m.

CARSON CITY -- The Nevada Gaming Commission on Thursday approved a complicated deal permitting operators of the Rampart Casino at the Resort at Summerlin to share 50 percent of their profit with the company that owns the property.

Commission Chairman Peter Bernhard said the property, which fell into Chapter 11 bankruptcy protection under former ownership, should not be a "question mark" in the future as to its stability.

"This financially troubled resort will not have trouble in the future," Bernhard said.

The gaming is run through corporations whose principals are Robert Mendenhall, William Paulos and William Wortman.

The casino will share 50 percent of its net profit in the future, minus such expenses as management fees, improvements and advertising with Hotspur Casinos Nevada. Hotspur is owned through a string of off-shore corporations finally up to the Hilfreich Stiftung Foundation in Zurich Switzerland.

The property owners are now receiving $4 million a year in rent and that goes up $300,000 annually until it reaches a rent of $6 million.

Thaddas L. Alston, president, secretary, treasurer and director of Hotspur, said the new casino operators have spent $10 million in improvements, including new restaurants and installing slot machines to cater to the local clientele, which is "fairly upscale."

Bernhard said the original owners sought to make the property a destination resort, but that was not successful.

The resort cost about $400 million to build but the new owners paid only $81 million for it. Alston said the owners put up $30 million in equity and have a loan of $50 million.

Bernhard said the owners have enough cash to pay off the loan if they want to.

In approving the deal, the commission also licensed Alston, who investigators said had a clean background.

The commission conditioned its approval of the sharing of profit on the licensing of Shiraz Lalji of London, who is an advisory board member and beneficiary of the Hilfreich Stiftung Foundation. Lalji has extensive holdings in hotels and shopping center developments.

Lalji has already started submitting documents for his application to be licensed.

Traditionally, a landlord receives only a set fee or rent without sharing in the profit of the gaming unless the state gives him or her special permission.

In other action, the commission gave final approval to regulations to impose the 10-percent live entertainment tax beginning Jan. 1.

This replaces the casino entertainment tax and will apply to live entertainment that takes place outside gaming casinos.

It closes prior loopholes in the law where some of the major Strip casinos with large showrooms were exempted from charging the 10 percent tax to customers.

The new tax is expected to yield $41.2 million this fiscal year and $75.4 million next fiscal year.

The regulations have gone through extensive hearings and have gained prior approval from the Legislative Commission and the Nevada Tax Commission.