Las Vegas Sun

August 20, 2014

Currently: 87° — Complete forecast | Log in | Create an account

Hard Rock Hotel investor granted state gaming license

Michigan-based Taubman Centers also had interest in other Las Vegas properities

A major player in retail shopping centers has received a Nevada gaming license after investing in the company that owns Las Vegas’ Hard Rock Hotel.

Robert Taubman, president and CEO of Taubman Centers, a Bloomfield Hills, Mich.-based retail management company, was unanimously approved for licensing by the Nevada Gaming Commission.

A subsidiary of Taubman Centers is a 16 percent investor in Morgans Hotel Groups, which operates the Hard Rock Hotel.

Taubman has other Las Vegas holdings. The company has a 20-year management contract with MGM Mirage for its Crystals retail and entertainment center at CityCenter. It also contracted with the M Resort on its planned retail center which has been announced but has no construction schedule.

Nevada Gaming Commission Chairman Peter Bernhard took advantage of having Taubman available to answer questions about the Hard Rock deal to inquire about the state of retail, particularly at Crystals.

Taubman said of the 70 retail spaces at Crystals, only three have not been leased. The high-end center is about 35 percent occupied, but he said stores are in the process of building in their spaces and 70-75 percent of it will be open by spring, with the rest open by fall.

Taubman said at the request of MGM Mirage, his company approached the highest of high-end retailers for leases to make it “the most upscale shopping environment anywhere.”

“Most of these are big flagship stores,” said Taubman, whose company’s biggest competitors are the Simon Property Group, operators of the Forum Shops at Caesars and Las Vegas Premium Outlets and General Growth Properties, which runs the Fashion Show mall and the Grand Canal Shoppes at the Venetian.

“Louis Vuitton, for example, is a 20,000-square-foot store, one of the largest the company has and they have the ability to expand to 30,000 square feet, which would make it the largest in the group,” he said.

In an interview after the commission meeting, Taubman said he is convinced Crystals would be a success and that other retail opportunities exist in Las Vegas after absorption occurs, a process that could take years. He said he has had preliminary discussions with his Morgans partners to explore opportunities at the Hard Rock, but did not elaborate.

The commission also approved the licensing of Las Vegas-based 777 Gaming Inc., parent company of Silver State Gaming, to operate six Northern Nevada casinos that had been controlled by Harold Holder Sr. The licensing was the first using the state Gaming Control Board’s new fast-track system to resolve emergency financial matters involving distressed casino properties.

Holder filed for Chapter 11 bankruptcy protection in June to reorganize the finances of the Commercial Casino and Stockmen’s Casino Hotel in Elko, the Scoreboard Casino in Spring Creek, the El Capitan in Hawthorne, Parker’s Model T in Winnemucca and the Silver Club in Sparks.

The Control Board tries to keep casinos open to preserve as many jobs as possible and to continue the tax revenue flow to the state. In the Holder case, the Silver Club, located in Sparks’ Victorian Square, was closed but the other five properties remained open.

The case was the first licensing matter addressed by the board since the formation of a special entity within the Control Board staff to move quickly on bankruptcies, defaults and other financial hardships when trustees, receivers and creditors exercising their rights become involved in Nevada’s highly regulated casino industry.

The new entity is comprised of representatives from the Control Board’s audit, corporate securities, enforcement, tax and licensing and gaming lab divisions and its purpose is to move quickly to gather information when distressed gaming properties default.

“We really don’t know how many cases will need this kind of a review, but it became apparent to me that there may be a lot of them,” said Dennis Neilander, chairman of the Control Board. “I wanted to have the agency as best prepared as we could.”

When the special entity was formed earlier this year, representatives of the different divisions built a template to gather critical information that could be shared by its members. Having the information available enabled the board to move quickly as foreclosure, defaults and bankruptcies progressed through the legal process.

In the Holder case, the bankruptcy was running simultaneously with a foreclosure and a request to appoint a receiver in Washoe County District Court.

Jeff Silver, a lawyer representing Northern Nevada Asset Holdings LLC, a landlord for the Holder properties, applauded the streamlined efforts of the Control Board. Silver said in the meeting that the board was able to manage the complex filing with greater ease as a result of the template that was developed.

777 Gaming Inc., a slot route operator led by Silver State founder Rory Bedore, will manage the six properties under the licensing recommended by the Control Board and has said additional capital may be required to get the Silver Club operational. A reopening date has not been announced.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy

Previous Discussion: comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

No trusted comments have been posted.