LOOKING IN ON: GAMING

By Liz Benston (contact)

Sunday, April 8, 2007 | 7:27 a.m.

When the topmost girders of high-rise buildings are fitted into place, construction companies often have "topping off" ceremonies by hoisting American flags and pine trees atop the structures.

In Japan, they pour sake and pray at the get-go.

Builders of the coming Cosmopolitan Resort & Casino, for months little more than a conspicuous hole in the ground to Strip passers-by, will host a traditional Japanese wine-pouring ceremony Monday to celebrate the first upward construction of the resort at Harmon Avenue and the Strip.

Contractors have spent several months digging 75 feet for an underground parking garage, hauling away about 800,000 cubic yards of dirt . Developers also awaited another milestone - signatures on the Wall Street financing package.

One of the two largest excavation projects in Las Vegas history, the construction of the Cosmopolitan, which is using Tokyo-based steel fabricator JFE Engineering Corp., will be memorialized by pouring sake into a steel column. Engineering drawings in Japanese and English also will be put in a time capsule and buried in the hole.

They'll eventually be retrieved. Imploded hotels have yielded casino chips in concrete chunks.

Call it a long goodbye. Riviera owners don't want to part with their casino for $27 a share even though executives wanted to sell the parent company to the same group of shareholders, Riv Acquisition Holdings, for $17 per share late last year.

Blame market speculators and the fact that Riviera Holdings is publicly held by several large groups of independent shareholders.

At least two of those groups have tried to buy out the company and would oppose efforts by competitors to acquire it on the cheap. All the parties are having difficulty pinpointing a price that will make everyone happy.

Land deals along the Strip have boosted the company's stock to levels that are based on what developers could pay for Riviera's land rather than what the casino earns.

The latest drama, unfolding in public with long, exasperating letters between the latest bidders and Riviera management, could be chalked up to bad timing. Management accepted the $17 per share bid last year , but outside shareholders rejected it as too low. Since then, the stock has soared on news of pricey land deals on the Strip - most tied to special circumstances that couldn't be replicated with other buyers or properties. Riviera executives are turning down the higher bid because of undercurrent concern that shareholders expect still higher prices. Management also is upset that the would-be buyers, against management's advice, tried to buy up shares owned by a third party to lock up a favorable vote, potentially limiting the ability of other shareholders to vote against it - or launch their own bid.

The infighting probably will continue as long as speculators continue to bid up the Riviera. Too bad for Chief Executive Bill Westerman, who sold his shares to Riv Acquisition Holdings for $15 a share.

Last year Sahara executives were offering their property for sale as a $700 million-plus package deal with acreage across the Strip and west of the property. Potential buyers who balked at paying more than $13 million per acre for the entire 55 acres are even more surprised by what prospective buyer Sam Nazarian of SBE Entertainment Group is offering for a smaller parcel today.

Nazarian, who expects to buy the Sahara with backing from Stockbridge Real Estate Funds, expects to pay more than $17 million an acre for a property that many investors say should be torn down and rebuilt before it can make money for a new buyer.

Nazarian offered such a good price for the Sahara's 17.5 acres that management relaxed the package-deal requirement, though it remains to be seen which party will ultimately be the richer from the deal.