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April 23, 2014

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Palazzo sues timeshare company over missing rent

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Steve Marcus

The parent companies of the Palazzo and its shopping mall, the Shoppes at the Palazzo, filed suit this month in Clark County District Court against Consolidated Resorts Inc. over missing rent. Consolidated was supposed to open timeshare marketing booths at the properties but did not, the suit says.

A lawsuit has been filed over a multimillion-dollar dispute pitting the Palazzo hotel-casino and its shopping mall against a Las Vegas vacation timeshare company.

The parent companies of the Palazzo and its shopping mall, the Shoppes at the Palazzo, filed suit this month in Clark County District Court against Consolidated Resorts Inc.

Consolidated, which is based in Las Vegas near Summerlin, is accused of failing to open marketing booths as agreed at two locations in the Palazzo and two more locations in the Shoppes at the Palazzo.

Officials of Consolidated could not immediately be reached for comment.

Consolidated has three timeshare properties in Las Vegas: Tahiti, Tahiti Village and Club de Soleil; along with properties in Florida and Hawaii. The lawsuit claims the hotel and mall are each owed $4.25 million in annual rent -- along with damages for allegedly interfering with plans by the Palazzo parent to sell the mall to General Growth Properties Inc. of Chicago.

The lawsuit says Consolidated is owned or controlled by Whitehall Street Global Real Estate LP (limited partnership) 2007, which is in turn sponsored and managed by Goldman Sachs Group Inc., the fund’s largest investor and a longtime investment banker for the parent company of the Palazzo.

The Palazzo and Shoppes at the Palazzo lawsuit says that after Consolidated was acquired by Whitehall, Consolidated was directed not to establish the marketing booths and that Goldman knew this would harm the plaintiffs since Goldman was aware of the plan to sell the mall.

The $1.9 billion Palazzo and the Shoppes at the Palazzo had their grand opening in early 2008. They are part of Las Vegas Sands Corp.’s collection of properties on the Las Vegas Strip and Sands Avenue that include the Venetian resort and the Sands Expo Center.

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