Las Vegas Sun

March 29, 2024

Las Vegas hotel serving gay market files for bankruptcy

Blue Moon Resort

The Blue Moon Resort, a small Las Vegas nongaming hotel serving the gay male market, and an associated company filed for Chapter 11 bankruptcy reorganization Tuesday.

The 43-room property at 2651 Westwood Drive, near Sahara Avenue and Interstate 15, will continue operating and believes it has a bright future once the economy turns around, manager John Hessling said Wednesday.

"It's business as usual," he said.

He said the property fell behind on its loan from Community Bank of Nevada after Las Vegas Strip hotels started offering deep discounts when the recession set in in 2008, forcing the Blue Moon to lower its rates to compete.

Blue Moon's room rates had been in the $100 range but now are about $90, Hessling said.

After Community Bank of Nevada failed, the Federal Deposit Insurance Corp. sold the Blue Moon loan and other loans to an affiliate of Los Angeles investment company Colony Capital LLC, which is best known in Las Vegas for investing in Station Casinos Inc. and the Las Vegas Hilton.

Hessling said negotiations over restructuring the loan with Colony failed, prompting Tuesday's bankruptcy filings.

Blue Moon Resort LLC listed assets of about $85,500 and liabilities of about $937,000 in its filing.

Associated company and landlord OHDB LLC also filed for Chapter 11 in U.S. Bankruptcy Court in Las Vegas. OHDB listed assets of $3 million for the value of the Blue Moon real estate and liabilities of $3.48 million -- including Colony Capital's claim of $2.8 million.

The Blue Moon, in the meantime, continues to market to gay men, offering a pool area, a Jacuzzi and grotto area and special events.

"Blue Moon Resort is proud to be Las Vegas' only hotel exclusively for gay men. Living up to being Las Vegas' only gay hotel is tough but we accept the challenge! Experience 'Gay Las Vegas' in the comfort of an all-male environment with a staff trained to meet the needs of the gay male traveler," the hotel website says.

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