Las Vegas Sun

March 28, 2024

Report: Marriott joining bid for bankrupt Aladdin

SUN STAFF AND WIRE REPORTS

Marriott International Inc. is entering the bidding for the Aladdin hotel and casino in Las Vegas, the Wall Street Journal reported on its website Friday afternoon.

Marriott officials couldn't immediately be reached for comment this morning.

Marriott is already a big player in the Las Vegas lodging industry with thousands of rooms under its Ritz-Carlton, Renaissance, Residence Inn, Courtyard, Fairfield Inn and Ramada International brands.

The company also operates the JW Marriott Las Vegas Resort in Summerlin under an arrangement in which a separate company runs that property's casino.

In April, Marriott entered a sales and marketing alliance with the owners of the Polo Towers time-share development on the Strip, near the Aladdin, and said it will jointly develop the previously announced 840-unit Chateau time share on Harmon Avenue across the street from the Aladdin.

The Journal reported that under the terms being discussed, Marriott would manage the Aladdin hotel for 20 years as a Renaissance hotel. The hotel giant would invest $25 million in the hotel-casino as a partner with a Los Angeles investment group called the Financial Capital Investment Co., according to Richard Alter, Financial Capital's managing director.

Marriott would also enter into a 50-50 joint venture to develop an adjacent property with timeshares, the Journal said. It wasn't immediately clear if Marriott would proceed with both the Chateau and the proposed timeshare development at the Aladdin.

The long-troubled Aladdin is in bankruptcy proceedings in Las Vegas. Marriott's main rival, Starwood Hotels & Resorts Worldwide Inc., has linked up with Planet Hollywood executive Robert Earl and New York financial firm Bay Harbour Management LC as the so-called stalking horse bidder for the Aladdin.

That group has agreed to spend $90 million to renovate the place over three years and to assume $510 million in refinanced debt from the original lenders, turning the Arabian-themed place into a Planet Hollywood casino and a Sheraton hotel with Westin timeshares built nearby.

Starwood agreed to invest $20 million in cash in the venture.

The Marriott-Financial Capital plan would turn the Aladdin casino into "ASIA," a Far East-themed casino aimed at middle-market American gamblers, while the hotel would operate as a Renaissance. Marriott "would have nothing to do with the casino," Alter told the Journal.

Plans include jugglers and animals, a fantasy garden and fiber-optic features.

Marriott-Financial Capital have also cut a deal with Trizec Properties Inc., a Chicago real estate investment trust that owns Desert Passage, a shopping mall adjacent to the Aladdin, the Journal said, according to people familiar with the talks. Alter described the agreement as a "mutual cooperation deal" and said the casino might lease space from the mall, the Journal said.

Marriott in the past considered another bid for the Aladdin with another investment group, but passed on the deal.

Initial bids for the Aladdin are due in Bankruptcy Court on June 17 and the property is scheduled to be auctioned in court June 20.

The sale process is one of the highlights of a 58-page reorganization plan and a 110-page disclosure statement the Aladdin's holding company, Aladdin Gaming LLC, filed in Bankruptcy Court on Friday. The plan is scheduled for confirmation July 8 and is contingent upon the sale of the hotel-casino.

The reorganization plan identifies 13 classes of creditors and how they would be paid following the property's sale. Claims totaling $588.4 million have been filed in the case, including $441.1 million by bank lenders; $77.2 million in claims from G.E. Capital Corp. (lender for gaming equipment and furnishings), $35.1 million from other secured claims and $35 million from unsecured claims.

The disclosure statement also outlines legal claims against the Aladdin that would be adjudicated in Bankruptcy Court following the sale. The largest dispute involves claims from Aladdin Bazaar LLC, the holding company for the Desert Passage mall, which shares a parking garage with the hotel-casino.

Dow Jones News Service and the Sun's Richard N. Velotta

contributed to this report.

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