Lender foreclosing on Las Vegas hotel-casino

Wednesday, June 25, 2003 | 11:02 a.m.

A Las Vegas mortgage investment company has initiated foreclosure proceedings against the owners of the Castaways casino-hotel for allegedly not repaying a $20 million loan balance by its due date this month, according to documents filed last week with the county.

Castaways owner VSS Enterprises LLC obtained a $20 million bridge loan from Vestin Mortgage of Las Vegas in March 2002.

The loan, secured by the property, was intended to refinance existing debt and fund property improvements, Vestin said at the time.

Owens Financial, another mortgage investment company based in California, is also an investor in the loan. Both Vestin and Owens invest in trust deeds secured by commercial property.

Owens Financial referred calls to Vestin Mortgage, which did not return calls for comment.

VSS Enterprises Chief Executive Michael Villamor did not return calls by press time.

The company acquired the former Showboat casino from Harrah's Entertainment Inc. in March 2000. Harrah's acquired the property, along with other casinos in Atlantic City and East Chicago, Ind., when it bought Showboat Inc. in 1998.

Later that year, VSS ditched the Mardi Gras theme for a Spanish resort look and adopted the name Castaways Hotel & Casino.

The property, at 2800 E. Fremont St., sits on more than 20 acres and has about 450 hotel rooms.

VSS Enterprises was crafted from the names of its members. Villamor is formerly of Primadonna Resorts, while Gregg Schatzman came from Primadonna and Ameristar Casinos. Dan Shaw is a real estate developer and investor.