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Gaming Guru

Brian Wargo
 

California company buys Ravella, Casino MonteLago for $46.8 million

3 December 2012

LAS VEGAS -- A California real estate company has acquired the Ravella at Lake Las Vegas and adjacent Casino MonteLago for $46.8 million.

Arcadia-based Kam Sang Co. bought the casino building and 349-room Ravella at Lake Las Vegas on Nov. 21 from Village Hospitality LLC, said Phil Wolfgramm, the company's senior vice president.

Village Hospitality, an extension of Deutsche Bank, acquired the property in February 2009 after the previous owners sought bankruptcy protection. Ravella, formerly a Ritz-Carlton, reopened under its new name in March 2011 nine months after it closed.

Wolfgramm said Kam Sang has long been interested in the property and offered to purchase the hotel in 2009, but it was rejected. In February, the company again approached Village Hospitality about acquiring it from them for a price less than what the company offered in 2009. He declined to disclose the difference.

Deutsche Bank foreclosed on the Ritz-Carlton in 2009 after it defaulted on a $103 million mortgage.

"It's great timing for us and for the hotel to have a nonbank owner," Wolfgramm said. "Our company is looking to get to the next level on acquiring properties of the scale and quality of Ravella, and it's a great opportunity for us and we are looking forward to getting more involved in that area of the hotel world."

Kam Sung owns Southern California hotels, retail, residential, restaurants and other mixed-use properties, but this is the first acquisition outside of Southern California for the 33-year-old development company.

Among the hotels it owns are the Embassy Suites in Glendale, The Sheraton Hotel in Anaheim, Courtyard Marriott in Baldwin Park, Residence Inn by Marriott in La Mirada, Rancho Cielo Estates in Rancho Sante Fe. Its retail properties include Puente Hills East in the City of Industry, Kaleidoscope in Mission Viejo, Simi Valley Town Center in Simi Valley.

Southern California real estate developer and owner Ronnie Lam is majority owner of Kam Sang. He also owns a chain of Southern California sushi restaurants called Tokyo Wako.

Kam Sang plans to hold the hotel long term and will study other hotel opportunities in Las Vegas, Wolfgramm said, though nothing is pending.

"It's a great market because it's a natural extension for us in Southern California," Wolfgramm said. "It's not a far away drive for a lot of Southern Californians who come to Las Vegas for the entertainment."

New-Jersey-based Dolce Hotels & Resorts will continue to manage the hotel, he added, crediting the previous owners of re-establishing the property.

"They put themselves back on the map for business," Wolfgramm said. "There are still some ways to go. A hotel like that needs to get out of the cloud of bankruptcy and bank ownership. When a lender owns a property, there is some uncertainty."

When selling rooms and conference space to businesses, companies prefer to deal with a hotel viewed as stable and not bank owed, Wolfgramm said.

As for opportunities, there continues to be a heavy interest in businesses to conduct training and hold seminars away from the Strip so those attending aren't distracted.

"It's close enough to take advantage of the Strip but far enough away so people can focus," Wolfgramm said.

Between the Ravella and Westin and condos in the area, there are about 1,000 rooms and the potential exists for groups to use both hotels for events, he said. Locals also remain an important part of the hotel for staycations and weddings, he said.

There are no plans to change the name of the hotel, and Wolfgramm said there are advantages to having an independent name because Las Vegas has stand-alone names.

"It's been open for more than a year and has name identification," he said.

The original hotel opened in February 2003, and Wolfgramm said some upgrades and improvements are needed such new carpeting. No major construction is planned at this time, he said.

Casino MonteLago, which is connected to Ravella via a walkway, is part of the acquisition and is leased to a gaming company, Intrepid gaming. Wolfgramm said the company would talk with the casino operator about upgrading the casino and adding table games that would draw more locals and outsiders to come to Lake Las Vegas. The casino reopened in May 2011 after closing in March 2010.

"We hope changes will attract not just locals but folks who come to Vegas to gamble and bring some more business to the area," Wolfgramm said.

The manager of Lake Las Vegas applauded the acquisition.

"We're happy there is new investment being made in Lake Las Vegas because it shows other people believe in it and willing to invest capital and think they are going to get a return," said Atalon Group Principal James Coyne.

In August, a hedge fund operated by billionaire John Paulson, purchased 835 acres in Lake Las Vegas for $17.3 million.