Facebook
Fark
Digg
Reddit
Stumble
LAS VEGAS SUN FILE
Casino MonteLago has a small residential base to draw from compared with other Southern Nevada properties.
Monday, March 1, 2010 | 2 a.m.
In Today's Sun
Timeline
Lake Las Vegas ad from 2006
Viewing video requires the latest version of Adobe's Flash Player
An advertisement for Lake Las Vegas from 2006.
Sun Archives
- Casino MonteLago at Lake Las Vegas to close next month (2-16-2010)
- Ritz-Carlton Lake Las Vegas to close in May (2-8-2010)
- Current, past owners spar in Lake Las Vegas bankruptcy case (9-21-2009)
- Lake Las Vegas proposes bankruptcy plan (9-5-2009)
- Judge approves bankruptcy for Lake Las Vegas golf course (6-29-2009)
- Another golf course to close at struggling Lake Las Vegas (6-25-2009)
- Lenders seek control of Lake Las Vegas hotel (6-4-2009)
- Ritz-Carlton bought amid financial woes (3-24-2009)
- Residents of bankrupt Lake Las Vegas face uncertainty (3-23-2009)
- Lake Las Vegas can abandon golf course, judge says (1-15-2009)
- Resort golf course’s fate spurs debate (12-16-2008)
- Bridge over troubled water (5-24-2008)
- Casino MonteLago swaps managers (6-17-2007)
- Grand opening set for new Lake Las Vegas casino (5-7-2003)
- Ritz-Carlton Lake Las Vegas spa and golf resort opens (2-11-2003)
One of Las Vegas’ maxims is that a casino is a license to print money.
Casino MonteLago, closing next month for lack of business and liquidating its assets, is the rare exception to that rule.
The recession and the failures of Lake Las Vegas golf courses and hotels that surround MonteLago hurt the casino, of course. But it was a long shot from the beginning for a more basic reason.
The casino, located 17 miles from the Strip and seven miles from downtown Henderson, failed to meet a prerequisite for a suburban casino: It doesn’t have enough potential customers living close to it.
Given the casino’s location and the recession, “it’s no wonder that it wasn’t able to survive,” said Grant Govertsen, a principal with casino consultants Union Gaming Group in Las Vegas. “It’s like trying to run a business with its hands tied behind its back.”
Most casinos operate at a decent profit before making payments of interest and principal on the mortgages and other loans to develop them. Even overleveraged casinos have moved into the black once mortgage debts are reduced or eliminated in bankruptcy. The ones that file for bankruptcy typically stay open and transfer to new owners who can operate them profitably.
In contrast, Casino MonteLago was barely making enough money to cover operating expenses.
Many observers attribute that problem to the fact that Lake Las Vegas, a 3,600-acre master-planned community that once had three golf courses, an open-air retail district and three upscale hotels, has built only 1,700 residences, far short of original plans for more than 9,000 homes. Fewer than 500 homes surrounded the 320-acre, man-made lake by the time the casino opened in 2003.
According to real estate research firm Claritas, about 3,500 homes are within a 10-minute drive of Casino MonteLago. The casino has a smaller number of homes nearby than any other casino in the Las Vegas Valley, including the relatively remote Aliante Station in North Las Vegas, which has about 64,000 homes within a 10-mile drive and the M Resort in southwest Henderson, surrounded by about 35,000 homes. Green Valley Ranch, located in a more established neighborhood, has about 70,000 homes in that vicinity to draw from. (The three casinos, like most others, are hurting in the recession.)
Early critics of Casino MonteLago said it also lacked a sufficient number of restaurants and other attractions to draw customers from more populated areas, which offer bigger casinos with more amenities. Lake Las Vegas’ retail district, MonteLago Village, was mostly vacant when the casino opened and was eventually populated by independent boutiques and curio shops that have struggled in the recession.
Early warning signs emerged for the casino and attached Ritz-Carlton hotel. (The 348-room hotel, another victim of the recession, will close in May.)
The original landlord, Cook Inlet Region Inc., is owned by an Alaskan Indian tribe with rights to oil and gas royalties and extensive real estate holdings. Cook Inlet owned a stake in the Hyatt Regency and Ritz-Carlton hotels at Lake Las Vegas and also owned the company that operated the Casino MonteLago, CIRI Lakeside Gaming Investors LLC.
By 2006, after incurring “substantial operating losses” following the casino’s opening, the tribal company decided to sell its casino operating company, according to Cook Inlet’s latest annual report from 2008.
Cook Inlet sold Lakeside Gaming in September 2007. In 2006, the operating company lost $6.5 million and reported an additional loss of $5.2 million to write off the value of casino assets and related operations.
In 2006, the tribal company sold its stake in the Hyatt and Ritz-Carlton hotels, along with a third resort, the Westin Kierland Resort in Scottsdale, Ariz. The company reported a loss of $90,000 in 2008, income of $54,000 in 2007 and income of $76.5 million in 2006 from the three resorts, excluding the casino, according to the annual report.
In 2007 a group of investors bought Lakeside Gaming, retaining the original name. The Casino MonteLago building is owned by Deutsche Bank. One of the new Lakeside Gaming owners, Johan Finley, acknowledged it was “definitely a mistake” to have opened the casino ahead of a critical mass of homes in the region.
Yet he held out hope that the casino could thrive, claiming at a Gaming Control Board hearing in 2007 that his group had brought the money-losing casino into the black, improving operating profit by more than 80 percent within a few months of taking over through a combination of cost-cutting and aggressive marketing targeting locals.
Then came the recession.
“The number of customers continued to rise until ... the entire economy turned down,” John Tipton, legal counsel to Casino MonteLago’s owners, said last week.
Now, even though the new owners of Lakeside Gaming don’t pay rent on the 40,000-square-foot space, the casino is barely breaking even, Tipton said.
The planned closure of the Ritz-Carlton, announced in February, was the last straw, Tipton said. Although most casino customers are residents rather than hotel visitors, the Ritz-Carlton, which helped market the casino, drew decent traffic to MonteLago, he said.
Under both old and new casino ownership, managers mailed a slew of offers to Henderson residents and held events typical of suburban casinos. Built to resemble a 15th-century Tuscan winery, MonteLago developed a following among Henderson residents who appreciated gambling discounts typically offered by low-rent casinos in an upscale resort atmosphere. They had to drive for miles, past downtown Henderson, past older casinos, past dilapidated buildings, a trailer park and a wide swath of desert to get there, however.
Knowing locals are reluctant to travel more than a few miles to neighborhood casinos, bosses advertised slot machines that paid back a greater percentage of wagers than most Las Vegas casinos.
But to no avail.
In 2007, Finley said he was betting on the growth of Lake Las Vegas to fuel a turnaround.
Now, casino owners see no point in continuing to gamble on growth that may be a long time in coming.
LV is a desert, some people seem to forget that..
Why drive to Lake Las Vegas to the casino there when u can go to Fiesta or Sunset Station in Henderson? If you just want to play slots, go to any minimart at a gas station.
There was never any real reason for this casino's existence in the first place.
They should made it an Asian theme instead of Italian.They always have money and they love golf.
"One of Las Vegas' maxims is that a casino is a license to print money."
No, it is license to STEAL money.
WAY over priced hotel, spa, golf and shops. I can't pay over $300 for a round of golf. Nothing to bring in tourists when everything is so far over priced.
The entire Lake Las Vegas project is doomed to failure.
I went out there numerous times, but as Judy said, it was always way too over priced for anything. Especially for being a local casino. If the good deal fliers were not sent out, there was no reason to go.
They apparently never thought to improve their horrible blackjack games to bring in some table games players. Awful rules with constant shuffling = no players.
Again, there is a way to salvage this entire property. Sell it to an water park operator to build an amusement park like Raging waters, Knotts, or Disneyland. Advertise it to the masses and this could be a huge success. Something has to be done with it, it's too valuable to mothball..
What was the draw to those of us who live here in LV, unless you lived within a short drive? It is a shorter drive to The Strip and The Strip offers more than LLV does/did.
LV isn't a Golf City and thus doesn't have the draw like a Scottsdale or Palm Springs has. Not only do those cities have a better choice of courses and a better "golf community feel" but those cities have better weather to support golf.
I wish LV was more of a Golf City, but it isn't. LV is still pretty dumpy compared to Palm Springs and Scottsdale.
Johan Finley had some foolish ideas. First of all he had technicians pull out the slot machines, and replace them with lower payback machines. Right in front of people playing other machines. Think a local would want to come back?
Then the brilliance continued. He build a high limit slot room that was always empty. If you're going to bet a bundle, you take a limo to the Strip. Right?
Then he tore up one part of the small casino to install a large meeting room. The idea was that there would be entertainment and whatever there. But nothing ever happened. It was a total waste of money.
But wait, there's more. He decided to develop a "High End" steak house.
Way over priced food. The day it opened, he had to fire his manager who showed up drunk. So after a while they lowered the prices-to no avail. So they lowered prices again, but it was too late. Now they're back to decently priced food. But it's too late.
Johan got lucky. With the adjacent Ritz closing, they avoided the 60 day WARN requirement, just 30 days. A great excuse.
In closing, it was obvious that when the casino got in trouble, they brought in a bunch of boobs who only made the situation worse.
It's just so sad for the 180 employees of CML. Good people, bad management.
Yes the local population does not like to drive, for us long time residents, having to drive between half an hour to an hour is too long. The exclusivity of the place as it was being marketed, backfired. Now the whole area is a deserted ghost town. If the authorities managing the place cannot come up with $$$$ to maintain the man made lake, one of their options would be to empty the lake and when that happens, this area will be just like any other suburban development in Vegas. At least in the NW side of town, Desert Shores, the Lakes and Summerlin, we have Red Rock Canyon as our backyard. The best part we are only a quick 15-30 minute drive to the Strip where majority of the jobs are in this city.
Goodluck with Lake Las Vegas, a nice place but not nice enough to warrant a 45 minute drive across the city.
Management, management, management. That was the problem. I visited the property not that long ago on an early Sunday morning. Every tablegame was open and fully staffed. It seemed to be the same scenario in the bars and restaurant. The access from the mall was not utilized and the place was dead. Directional signage to the property is NILL. It is run by a guy who is a lawyer with no gaming experience. Of course it is going to fail. The prior GM/operator was the former Caesars GM from days gone by and was never there. The place was doomed for failure due to the management that was put into place.
Regarding comments about bad management...for whatever it's worth...I have worked in 3 casinos, 2 in las vegas and one in ac, as well as several other industries. I have an mba and I have never seen an industry that is so badly run by management. Most casino managers would not last a week in another industry. I don't know anybody mentioned in the comments but even the best are really bad. I don't know where upper management finds these people! Do they screen for the worst candidate or just hire otherwise unemployable friends and relatives?
I have lived in Lake Las Vegas for 2 years and wonder why people are so nasty. Here is a nice community that makes things nicer and you get people with nasty comments. Would you rather have a Lake Las Vegas or all those crappy neighborhoods around Fiesta.
Can't believe how bad people are here with littering, speeding, tailgating. You don't deserve such as nice community.
You're right about the exclusivity. I lived here for 3 years and did not know that there was anything in there for the "public" until last year when I went to an separate advertised event. Bad marketing.
Let me go fishing or kayaking in the lake and I might spend a few bucks at the local restaurants.
Good article Liz! Interesting detail.
One other key factor which I believe led to the downfall of Casino MonteLago was its ventilation system, which never seemed to work effectively. Most non-smokers would notice, immediately upon stepping onto the casino's escalator from the parking lot bridge, a massive, disgusting intense smoke cloud. It made a terrible first impression. The smoke cloud was there every time I set foot in the place.
And, of course, regardless of the real amount of smoke on the casino floor, that disgusting smell stayed with one all the time one was in the casino. Who as a non-smoker would want to eat a meal or gamble there?
The place smells like one of the dives on Water Street.
I realize the gaming industry thrives on business from "compulsives" who they define as smokers. However, for whatever reason there were not sufficient smokers to keep the casino, its restaurant and bar afloat.
Perhaps the surrounding neighborhood demographic is not filled with compulsive smokers. Perhaps the landlord, Deutsche Bank, needs to consider a new non-smoking casino. Or simply forget the casino operation and put in a nice restaurant to attract locals and hotel guests.
The smoke smell problem, caused by its defective ventilation system, was certainly exacerbated by the small size of the casino, and it will take a tremendous cleaning job by the landlord (Deutsche Bank) in order to remove all of the surfaces (carpet, furniture, wall coverings, draperies) to get rid of the disgusting odor.
it just seems like the era of rooms full of slot machines from wall to wall has passed.
even when i go on the strip on a saturday night, 9 our of 10 slot machines is not being used.
casinos are going to have to get some kind of video game based gaming system.
i just can't see the playstation and xbox generation sitting down for 10 minutes and just hitting "spin" on a slot machine.
there needs to be a guitar hero style or halo style slot machine where 4 or 5 people could play at one time.
people play darts and billiards for money, right?
why not just do the same thing in casinos?
think about how cool it would be if you and 3 of your friends could throw in $20 each and race a 3D car around a track for 5 minutes and whomever wins the race gets 50% of the "pot" and the casino keeps the other half?
I played BJ at CML one night. All they had was 6 deck shoes and dealt about 60% of the deck. I got sweated by the PB's for raising my bets from $5 to $50. Then at 2:00am they just shut down the table I was at and closed the pit. Huh?
You could put a casino anywhere and if the house offers fair games people will go there. Keep the drinks flowing and be nice to customers and people will come back. Be reasonable with comps and take care of people. Whatta a simple formula. CML did not follow the formula. C-YA.
There is a 1/2 hour documentary produced by Vanguard called "Lost Vegas". It pretty much sums up the horrible situation Vegas is facing right now and most likely for years to come.http://www.hulu.com/watch/91549/vanguard-lost-vegas
I agree with some of the comments that the casino was always mis-managed. I just recently learned that CM had a great 5 times points bonus. However, nobody knew that. There is no poker room. The dealers were not the friendliest.
Maybe LLV doesn't need a dedicated casino. As LLV is family friendly, how about a Lucky Strike Bowling alley with an attached game room with, pool tables, hi-tech games, Wii etc and maybe a few slots, tables and poker room. I heard there is an entire upstairs that is not even being used.
A venue like this, would certainly be a great way to spend a hot summer afternoon in Nevada! It's time to change our thinking and adapt to new things and think outside the box!
ATTENTION ALL READERS! Bdover is the same person as NedNougat. Below is the proof!!! While commenting as Bdover, he gave a NedNougat email address. Makes you wonder how many other aliases there really are!?!?
--------------
Comments by user: bdover
Page 49 of 63
Older Newer Posted on: Residents of bankrupt Lake Las Vegas face uncertainty
Oops. nednougat@hotmail.com. Sorry, old lawyer, I was educated on the west coast.
(Suggest removal) 3/24/09 at 5:15 p.m.
Posted on: Residents of bankrupt Lake Las Vegas face uncertainty
Old lawyer guy, I didn't mean to infer that LLV is a toxic waste dump. No, it's built on a nearby hillside, so it has avoided the perchlorate and hexavalent chromium runoff nearby in the groundwater. But think about it-the departing mayor pushed through all kinds of remediation projects to allow development on toxic waste areas near LLV. Tuscany is one, there is now underway a project at Lake Mead Pkwy and Boulder that might lead to 15,000 homes being built on the same toxic waste-nearer to the WW2 factories that produced the hazards. I have such an amazing article from 2007 that points out the corrupt way that the City of Henderson, and specifically Mayor Gibson, pushed through remediation on these toxic areas. Did you ever watch the film "Erin Brokovitch?" Hexavalent chromium big time. I'd be happy to send you the article-I sent it to Jon Ralston-He did nothing. My e mail is nednouget@hotmail.com. Best of luck...
When we first moved down there, we looked at property at Lake Las Vegas. The prices were ridiculous for what the property was and the location. Driving out there is like driving thru Juarez. You take your life in your hands if you stop to get gas along the way. Poorly planned, poorly managed, and overpriced to the max! Its sad to see another property go, but this is only the beginning of whats to come. If you don't have any jobs for people to support themselves and the community, the community will fail. There are NO jobs here worth anything, and the prices keep going up and up. Used to be Vegas was cheaper than most major cities to live, not anymore! Check out your NV energy bills lately? Or your water? How bout your grocery bill?
My advice: Get out while you still have money in your bank account and go where the jobs are!
Just the "O" man for the money. I travel through Las Vegas a lot. You have got to be kidding me. You have what look like Guatemalan trash picker handing out lady of the evening cards, It's GROSS.
There isn't a decent part of town, you have to drive through ghetto after ghetto and your elected officials think adding computers and training poor people to pay bills online & email friends (completed with instructions in Spanish) will generate jobs. How the hell to they expect to replace the call centers, now in India where people make .50 cents and hour. Yep that will simulate the economy. You have federal and local money funding a highway expansion to a three times defunct suburb. Then you have the monorail (oh please let's shake more hands in China!). Instead of a 4 mile mistake, let's make it a 40 or 400 mile mistake. Your shaking hands with Dubai really worked out great. Let me get this straight. America is in trouble because people can't pay for their houses but nobody considers the stupid deals our elected officials are making? Yet nobody asks why we send our kids to schools for 12 years, and they don't even have enough skills to work at a hamburger joint. We have to retrain them at the community center? What the heck is wrong with people? Rise up and demand accountability from your government.