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Black Gaming demolishing Oasis casino in Mesquite

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Leila Navidi

A lone truck drives along I-15 past the shuttered Oasis casino in Mesquite.

Updated Wednesday, May 19, 2010 | 8:33 p.m.

Scenes from Mesquite

The Oasis casino in Mesquite, owned by Black Gaming, temporarily closed its doors in December 2008. The highway billboard for Oasis now advertises Virgin River, another one of Black Gaming's casinos in Mesquite. Launch slideshow »

Bankrupt Black Gaming LLC is preparing to demolish its closed Oasis casino in Mesquite and some of the 900 Oasis hotel rooms.

The demolition, planned for this summer, is part of a company plan to focus on two other operating properties in the Mesquite market, about 80 miles northeast of Las Vegas.

They are the Virgin River Hotel & Casino, which has 717 rooms; and the CasaBlanca Hotel & Casino, which has 472 rooms and 24 time shares.

The plan to take down the Oasis shouldn't be viewed as a negative reflection on the long-term outlook for gaming in Mesquite, said Greg Garman, a bankruptcy attorney for Black Gaming with the Las Vegas law office of Gordon Silver.

Garman said Wednesday that as the market improves, Black Gaming intends to reopen the more modern 210-room Mesquite Star hotel-casino, which Black acquired out of bankruptcy in 2000 for $6.3 million.

That property, now known as the Virgin River Convention Center, is a non-operating casino with 12,000 square feet of gaming space. It has been used over the years as a special events facility and for overflow hotel traffic from other Black Gaming properties.

"The Oasis is an outdated, inefficient property," Garman said.

It wasn't immediately clear how many of the Oasis rooms would be demolished, since some are reserved for time share use. Garman said it hasn't been determined what the company will do with the Oasis land sitting on 26 acres across the street from the CasaBlanca.

Company Chief Executive Robert "Randy" Black Sr. today said planning is under way for the casino demolition and that the company hasn't decided how many hotel rooms to demolish.

Black said that depending on business conditions, it's likely at least 300 of the hotel rooms would be unaffected by the demolition and remain in operation.

The Oasis has 73 time share units that won’t be affected under the plan. They are the Grand Destinations Vacation Club with 34 units and the Peppermill Palms at Mesquite with 39 units. The CasaBlanca time shares are called the CasaBlanca Vacation Club.

Portions of the Oasis hotel date to the 1960s, when it was known as the Western truck stop, Black said.

Black said the company's bankruptcy reorganization process is going well and that the company is looking forward to growth as the Mesquite gaming market recovers from the recession.

"We think the future is bright for us," he said.

Because of weak business conditions, operations were reduced at the Oasis beginning in December 2008 and the property was eventually closed except for the operation of 16 video poker machines and use of the property as hotel overflow.

Even as it prepares to take down the Oasis casino, Black Gaming is seeking bankruptcy court approval to replace the old Virgin River hotel and CasaBlanca marquis signs with modern LED signs and renovate other signage at the properties at a cost of about $1.35 million.

"Due to the age of the (existing) signs and significant lead time required for display charges, such signs are ineffective at meeting marketing needs," Black Gaming said in a court filing.

Sean McKay, chief financial officer of Black Gaming, said in a March 13 court filing that the company budget called for $275,000 to be paid this week and another $275,000 next week for the Oasis demolition.

But the Oasis demolition has been postponed until June, he said in the filing.

Using the demolition money in the budget for the signs will result in the payment of the demolition expense later than initially anticipated, McKay said in the filing.

The proposed demolition would cost $1.1 million, court documents show.

“Following court approval, it is projected that the demolition of the Oasis will commence in May and that the costs of such demolition will be paid in four equal weekly installments (of $275,000) starting in the week ending May 14 and continuing through the week ending June 4,” a March 1 budget submitted to the bankruptcy court says.

Additionally, an April 28 financial projection filed with the court includes “the projected costs associated with razing a substantial majority of the Oasis Casino.”

Black Sr., in noting the demolition was still in the planning stages, said it was conceivable the demolition could be called off and that the Oasis could be reopened someday.

The March 1 Chapter 11 bankruptcy filing by Black Gaming and eight subsidiaries followed a December announcement that the company, unable to meet debt payments because of the recession, would be reorganized and investors would gain equity stakes. The investors include South Point hotel-casino owner Michael Gaughan, Black Gaming executives Robert "Randy" Black Sr. and Anthony Toti; and Texas company Newport Global Advisors LP.

The companies in their filing listed liabilities of $253.4 million.

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