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StumbleRiviera bankruptcy plan includes new equipment, improvements
Monday, Aug. 30, 2010 | 10:51 a.m.
Sun Archives
- Riviera loss narrows to $4.2 million in second quarter (8-24-10)
- Riviera files for Chapter 11 bankruptcy reorganization (7-12-09)
- Riviera stays mum on report of Starwood takeover (3-26-10)
- Riviera loses $4.5 million, says bankruptcy possible (3-17-10)
- As earnings fall, Riviera unsure if bankruptcy can be avoided (11-9-09)
- Riviera skips another interest payment (7-8-09)
- Riviera misses interest payment, warns of possible bankruptcy (3-31-09)
Map of The Riviera
The Riviera
2901 S. Las Vegas Blvd. , Las Vegas
The Riviera Las Vegas hotel-casino would be spruced up and receive new gaming equipment under its parent company's bankruptcy reorganization plan.
Unable to service its approximately $291 million in debt and liabilities, Riviera Holdings Corp. filed for Chapter 11 reorganization in Las Vegas on July 12.
Investors led by longtime hotel and gaming industry executive Barry Sternlicht of Starwood Capital Group have acquired some of the debt and intend to lead the company out of bankruptcy.
Besides its 2,075-room Las Vegas property, the company owns the Riviera Black Hawk casino in Colorado.
The company this month said that in the second quarter, it lost $4.2 million or 34 cents per share vs. a loss in the year-ago quarter of $13.5 million or $1.08.
Net revenue of $32.3 million was down from $34.6 million as the Riviera Las Vegas continued to suffer from its isolated location on the northern portion of the Las Vegas Strip as well as the over-supply of hotel rooms and gaming space in Las Vegas.
In a Friday update to its disclosure statement for its reorganization plan, Riviera Holdings noted that it's been conserving cash and not investing much in capital improvements.
That would change under the new ownership, with exterior paint, select window treatments, elevator upgrades and exterior and interior signage improvements planned for Riviera Las Vegas; and new slot machines and gaming software and hardware planned for Riviera Las Vegas and Riviera Black Hawk.
Under these plans, maintenance and capital spending would jump from about $3.6 million this year to about $9 million per year through 2015.
The disclosure statement and reorganization plan note the reorganization proposal calls for Riviera Holdings to replace its $291 million in liabilities with a $50 million term loan and potentially an additional $30 million in term loans and working capital.
Financial projections filed with the documents show the value of the company emerging from bankruptcy would be $216.5 million.
Projected net revenue of $138 million in 2010 would increase to $140 million in 2011, $145 million in 2012 and $171 million by 2015.
Riviera, which is currently not paying interest on its debt, would have to make interest payments after it emerges from bankruptcy. With these payments, the company is projected to lose $6.1 million in 2011 and continue losing money until 2015, when a profit of $1.5 million is projected.
However, the losses from 2011 through 2014 would be mostly on paper. That's because they include accounting charges of ranging from $13 million to $17.5 million per year for depreciation and amortization.
Riviera's disclosure statement notes that during the economic boom, several hotel-casinos on the Las Vegas Strip had real estate valuations that peaked in 2007 at $30 million per acre. A recent appraisal found the 26-acre Riviera is valued at $157.2 million, or about $6 million an acre.
The Riviera noted that the mothballing of the nearby Echelon (former Stardust) and Fontainebleau resort construction projects and the lack of development of the New Frontier site has harmed properties in the area that include Circus Circus and the Sahara.
"The effects of such nearby vacant lots and uncompleted projects have been considerable. Although Riviera Las Vegas has fewer neighboring competitors, there are also fewer reasons for customers to venture to the north end of the Strip. Overall, the transformation of legendary casino resorts into vacant lots and inactive construction zones has greatly reduced the vitality of the area, and the attractions and synergies that such competitors once provided have been completely eliminated," Riviera's filing said.
"Compounding these difficulties is that Riviera Las Vegas has always relied on walk-in traffic by capitalizing on its Strip location, and its close proximity to several major casino properties as well as the Las Vegas Convention Center and several timeshare and condominium projects. Not only has walk-in traffic diminished due to the reduction in casinos and other attractions along the north end of the Strip, but any remaining foot traffic near Riviera Las Vegas is further reduced due to inaccessibility to the property due to construction hazards at nearby properties, streets or walkways," the filing said.
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Sounds like the grumpy, disgruntled staff is staying. Bummer.
They better hope they get Judge Zive as their bankruptcy judge and prepare a "Stalking Horse" bid for pennies on the dollar.
Good for them. As long as they don't close, we don't need ANOTHER eye sore on the north side of the strip. (Thanks Fountainblue and Boyd)
How about a new everything?
Doesn't Vegas have an excessive amount of rooms? Shut it down then!
Let's see. 291 in debt,two separate loans of 80 and 50 million, and revenue of approximately 140 million per year. That is nearly a half billion dollars and still has old signage and old gaming equipment. Huh?
I'm broke, let's go buy something!
Has anyone heard from Hew recently? How'd the Equador thing go?
I do not see how the Riviera will survive even with the upgrades.They blame there losses on mothballed construction project Echelon and the construction delay of Fountain Blue Plus they say the access to the Riviera (which relied on walk in traffic) has been diminished by construction hazards such as sidewalks and streets.What is going to change in the near future,to help it.Echelon is now a semi-built steel and concrete structure and Boyd has said it will not restart for many years to come if at all.There is no telling when Carl Ichan will restart Fountain Blue.How will the Riviera survive? I would hate to see it close but at this point it does not look good.Their only chance that Fountain blue finishes asap and opens.This will help and open up the northeast side of the strip again.When City Center was under construction the covered walk ways going past it were used but not like the open areas on the rest of the strip.People do not like being on vacation and having to walk through construction zones.They intemidate pedestrians and give a sense of being not safe.
I wish Riviera all the luck in the world and here in Vegas thats what you count on. LUCK !!!
P.S. Food for thought Riviera Management why not try and hold a WSOP Poker Tourney or something.Bring in some of the guns in poker and televise it.
They think they are the government. They are bankrupt so lets spend some more. Wonderful
I don't know how far $9 million will go, but any improvements to the building will be welcomed.
The Riv isn't a "dive" but it needs updates in key areas, despite their decision to keep the Old Vegas-style decor that we all remember from the movie "Casino".
Going from the tired mauve exterior to a color scheme more in the now is a start. Signage inside and some further updates to the rooms that have only been partially renovated will help. I would suggest, however, that the management allocate more dollars for general housekeeping and keeping the place sparkling clean day in and day out.
In terms of the casino, the place is certainly no Bellagio, but the house needs to bump it about two notches, maybe three, starting over with a more aggressive marketing plan to bring in local customers and tourists looking for a great middle-market experience. And by that, I don't mean the old 40-for-20 gimmick or the free deck of cards trick to lure people in.
I wish the Riviera luck. Got married there in 2002. Last time we were in Vegas, a cabbie picked us up from where we were staying (Caesars). When we told her we wanted to go to the Riviera. She just asked "Why?". Sad when even the cabbies that love to talk about Vegas think so low about a resort.
I truly hope this works. This place has a supper warm spot in my heart. I can honestly say the best times I have ever had in Vegas ( and there have been too many to count) and I have stayed at almost ever hotel on the strip were at the Riviera. Please do her proud once more.
"That would change under the new ownership, with exterior paint, select window treatments, elevator upgrades and EXTERIOR and interior SIGNAGE IMPROVMENTS planned for Riviera Las Vegas..."
Exterior signage improvments? Looks like we're about to lose more classic neon from the Vegas strip. Not sure why everybody is so intent on doing away with the neon signs that gave this town its identity.
How "isolated" is the Riviera, when you have Circus Circus across the street along with Slots O' Fun?
I doubt Circus Circus thinks it is "isolated."
fatabbot: I wish the Riviera luck. Got married there in 2002. Last time we were in Vegas, a cabbie picked us up from where we were staying (Caesars). When we told her we wanted to go to the Riviera. She just asked "Why?".
If you go to that "isolated" spot and look across the street you have that little powerhouse Slots O' Fun. Look at the hype! They have a large slot machine outside to give you a free pull, they advertise a $2(?) two foot hot dog, a special game of 21, and give out all kinds of enthusiasm to pull in the customers. The place is 100 times more inviting than the Riviera, and yet it is mostly a rip off of high prices, but it gets the customers.
The Riviera acts like Dah...what are we here for? Like they don't really know. They don't show a competitive attitude, they don't show enthusiasm. Of course, most people would never walk from Slots O' Fun across the street to check it out. It really goes the other way, you know.
Whatever happened to the Golden Nugget wonder boys?
Last I read quite a while back they went to work for Steve Wynn, then there has been nothing said about them pretty much since.
Do they still work for Wynn Resorts?
Are they in Macau? Las Vegas?
True Riviera is the "Icon" of the strip so why not preserve it. A shame management let it go down the toilet, but there is hope for us still there. The new owner's are smart to just do the cosmetic changes that will definately help people feel welcome. Riviera needs to step it up with good marketing promotion and get the people here. Just takes some determination to get it done. Most of all clean up this place, no one wants to visit a dirty casino inside or out.
I visit the Riv regularly. I have always found it to clean, friendly, and comfortable. I'm not a big fan fo the Mega resorts, they're just to big and intimidating. The riv has been a icon forever and I've been visiting since 1973. Should it close it would be a disaster for me and my wife. I'll be back at the Riv in four weeks, we love the place. Let's just remodel and continue forward.
It is obvious that these lower middle class hotels stand no chance in this crisis. The top resorts were forced to lower their rates in order to attract the players and fill their rooms. To lower their rooms by 20-30 dollars is possible and makes some people change their minds and pay a little more but having a nice room in a newer hotel than places like the Riviera, or perhaps Sahara, Circus Circus, Stratosphere.
It cuts both ways, as places such as the Riviera don't have the manouvering room to lower their rates by 20-30 dollars without actually losing money. In a consequence they lost clients that went to stay (and play) in other resorts. And what we have here is a disastrous (bankruptcy) situation.
I personally don't see a way for these resorts to make a comeback into profitability unless the economy recovers and the high end resorts raise their rates, and in a consequence, making it more interesting again for low budget travellers to stay at the Riviera or Sahara, etc.
It's not that the Riviera is old and crappy, but it's because the room rates have become so low over the past 2 years that the tourists choose to sleep in newer rooms in newer hotels. Nothing you can do about. The company that doesn't have enough cash in the back-up will find it difficult to make it during these tough times.
I think offering hotel deals plus a buffet at a good price might be something. The buffet can't be super world class, it doesn't have to be. It's important that it's good and affordable, so the low budget travellers might still pick one of the good old resorts , some do it even for nostalgic reasons already.
From Switzerland
@BorisR:
You're damn right, great post, Boris*...
...'some do it even for nostalgic reasons'
just to bring back the good ole times and let them roll:
http://www.youtube.com/watch?v=DD4_BD2en...
Btw, Circus Circus is still the best value on the strip:
http://www.youtube.com/watch?v=nyRrN0Dcv...
http://www.youtube.com/watch?v=33euZJJRH...
I agree with Boris from Switzerland.
There's no way they can survive the rate situation.
If I can stay at the Mirage for $55.00 a night, why would I want to even think about the Riviera?
Add into that the now isolated location, it's a huge hit.
Man, also how are SBE and their hedge fund partners going to hold the Sahara together?
They don't publish numbers, but that property must be hurting badly.
Too bad their timing was so poor, like so many.
It's about time. The Rivera has been an eyesoar for years. I would like to see that entire area rebuilt and have the post war 40's, 50's, and 60's entertainment and look back. That genra would be great and I believe it would work. Make it real classy. Have the Stardust and the Rivera be a drawer with strong Rat Pack, Elvis, and cruners style in smaller theaters, not stadiums. Not trinket tourisy. but real class. Dinner jackets, gowns, and coctail dresses a must. Make it dress up every night. Everyone would be envolved in the genra experience. Not a mega resort. Make it the real Vegas. To a special demographics. No children. No fast food. And not cheap. I believe it would make it.
Hey,,,those of you trashing the place have probably never even stayed there....the renovated rooms are quite nice, cheap and clean! the classic vegas feel of the place is a throwback and much more enjoyable than the stuffiness of the newer places. They should loosen up the slots.....and a suggestion...take down the tacky mirrored front and make it look more original!! such a shame that vegas doesn't appreciate it's history and ya'll are always so quick to tear down these great old places. there is a place for classic vegas to not only survive, but to thrive!!!!
Let some of Classic Vegas live!
and a great amusement park with roller roaster and a big wheel on the Echelon site while they're not decided if and when to resume construction. This would liven up the entire middle Strip zone and make the people happy :)
From Switzerland
One word: HEADLINER - Appearing nightly. Not a tired drag show either.
You've nailed it again, Boris*.
Way to go, great idea, great big roller coaster, that would also be lots o fun for the families and their children.
The Riviera used to advertise extremely loose penny machines. Why not advertising loose videopoker machines? Full pay progressives, such as found at the Palms, j-o-b for the retired, with coin-in/coin-out technologies, hand pay on the royal (for more tips to the slot attendants) and other cool promotions? I am sure there are way to liven up the old times and still make it somewhat profitable for the casino and entertaining for the visitors, as well.
Greetings from Switzerland
yeah, the Echelon Site is located in the center of the Strip. It's next to Circus Circus where a lot of families go , with limited budget but hence, willing to have fun and spend some. Why leave the Echelon site deserted and not instead build a nice little (provisional) amusement park? Doesn't have to be a multi-million dollar roller coaster, but I am sure there is a way to set up some fun facilities in the meantime while everybody's waiting for the economy to rebound.
From Switzerland
The redone rooms are nice. Upper management was changed (due to the death this past year of the CEO), and they will have a lot less debt to service when emerging from bankruptcy. Now the biggest problems will be like others here mentioned, the place is disgusting and dirty inside and out. Their food and beverage director has made every possible bad decision in the past couple years to give less and less to even go there for (removed the back bar completely instead of fixing it due to health dept. violations, closed the Italian restaurant, and wasted 10 million on building, an inconveniently located sports book that can't hold a candle to other local sports books, such as Hilton's superbook or even Bally's sports book, which are both convenient to pull up, park and go place a quick wager or two.
Then the Riv has the problem of old, grumpy union employees who would never get hired anywhere today. When the majority of waitresses and hospitality related staff are all older than me (I'm almost 50), the place starts to resemble a nursing home with slot machines instead of a casino.
Clean up, revamp and restaff and the Riviera may stand a chance at coming out of Bankruptcy as a Retro Vegas property that many tourists won't want to miss. As it is today, it is a perfect place to avoid unless you just happen to like dirty, nasty places with disgusting public restrooms and old, out of shape, grumpy people to serve you your drinks or hand you your chips.
About the drag show,who really wants to see some guys dressed as women? is this supposed to shock people from small towns that come here?
Right said, Boris*, you came in and hit it again.
The Riviera could easily get back into business by inviting those clients who want to relive the good ole times, at least when they're on vacation. And by inviting the folks, who always loved to visit Vegas as a family.
So, some outdoor fun facilities constructed for the kids would be a good point to start from and would surely draw more tourists by providing some outdoor action during the cooler times ahead from November to April.
The Riviera is extremely spaceous, especially towards the rear of the building and the garages. They filled it up with some strange "vending zones" but I can't support that. On the other hand, leaving it all empty would make it look like walking through a subway zone. Perhaps it's better this way. I like the casino floor as it really reminds me of the old days. There are areas where you can see that there used to be the high limit zone and the race and sports book zone has been converted into the players club. It's a bit too big from my point of view but still ok.
I don't know what would have to be done in order to bring in more customers. The Riv is tumbling along just like all the other old casinos, hoping for a rebounding economy. Won't happen so soon, no matter what new ideas will come from Helicopter Ben Bernanke. The entire nation has too much debt that needs to be paid back first before a new life can start. Just like in poker.... before good play can start, ....bad play must stop. Stop buying new big trucks when your old truck still runs. And stop buying big color tv's very room of your home, paid on debt. You can't impress nobody. In a few years from now you can be out of the debt and have more breathing room, and more money for Las Vegas.
Greetings from Switzerland
My wife and I were just talking the other day about how much fun we used to have on this side of the strip. Walking back and forth from the Riv to Stardust to the Westward Ho and the Frontier. Even visited Circus Circus. The staff were great, the gambling was relatively inexpensive, and the fun was enormous. We miss it. We still have fun at the mega-resorts but it's just not the same. Hopefully the Riv stays, I'll be in Vegas in November and I haven't stayed there in almost 8 years, but i will this time.
Boris, once again you suggested making LV more family friendly and putting in an amusement park near the Riviera. They tried doing something like that back in 1992. Circus circus opened their Adventuredome and MGM Grand opened an amusement park in back of the hotel. The circus circus dome has become quite shabby and it has not done well for the last 20 years. The MGM amusement park was horrible with crappy rides. I don't know what became of it. The whole "family friendly" thing disappeared rather quickly in LV. Maybe that's why there are fewer magic shows and more Cirque du Soleil shows with $100 admission prices on the Strip.
The main problem with building amusement parks in LV is that they have to compete with the parks in Southern Calif.--just a few minor places like Disneyland and Universal Studios and Knott's Berry Farm. The MGM amusement park was built for $100 million -- and just one new ride at Disneyland can cost that much.
manfromuncle1
Thanks for sharing your ideas. I remember that MGM "theme park" and even bought a day pass one day. Or was it just a half day pass? Can't remember, but the rides weren't special, that's true. It was back in the days when I wanted to be everywhere in Vegas at the same time :)
I just think that perhaps a provisional theme park on the Echelon construction site could be something. Just like there is at times in Henderson right next to the Fiesta and on the way to Summerlin on the right side in front of some shops on the parking lots. I mean, just a little something where there will be nothing for probably quite a long time...
Last time I went to Primm trying to ride that old school roller coaster it was down for heavy winds or because of some saving reasons. I ended up in the Outlet and drove back to Vegas very soon after getting my stuff. Hopefully the Primm Roller Coaster will be open in October. It's always part of my trip. One ride per visit :)
Greetings from Switzerland
Boris