CasinoCityTimes.com

Gurus
News
Newsletter
Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Recent Articles

Gaming Guru

Rod Smith
 

Future in Limbo for Castaways, Former Workers

11 February 2004

LAS VEGAS -- More than 100 former Castaways workers turned out Tuesday for help at a one-stop re-employment assistance center even while the new owner of the hotel-casino confirmed several businesses have expressed an interest in buying the property.

"It was a good first day, but there's a pool of over 650 workers who have until Friday" to go through the Nevada Partners center at 710 W. Lake Mead Blvd. in North Las Vegas, Culinary union spokesman Kevin Kline said.

Meanwhile, Vestin Mortgage, which bought the 49-year-old hotel-casino Feb. 2 for $20.7 million from VSS Enterprises, has started marketing the property, company spokesman Steve Stern said.

Vestin, which sees the sale of the 25.9-acre property at 2800 Fremont St. as a simple real estate transaction, has received substantial interest from a wide range of possible buyers inside and outside the gaming industry, he said.

But University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said it is unlikely the property that closed Jan. 29 can be reopened as a successful hotel-casino.

VSS had struggled with the property since buying it from Harrah's Entertainment for $23.5 million in 1998. At the time, the property was the Showboat hotel-casino.

Harrah's bought Showboat Inc. from its shareholders for $550 million principally for the brand name and to own and operate Showboat properties in Atlantic City and East Chicago that it still has rather than for the Las Vegas hotel-casino, Harrah's spokesman David Strow said.

When built 49 year ago, it was the original locals casino, Thompson said.

"It worked for the first 20 years, but when Sam's Town was built, the flavor for locals changed. The thing is, we just don't need it today if we're going to develop megaresorts," he said.

Thompson said it was conceivable the property could be themed to appeal to a niche market, or could be redeveloped as low-cost housing, an education center, a halfway house, a rehabilitation center or assisted senior living.

Real estate sources said the property likely will be closed six to 12 months no matter how quickly it sells or for what use, because of the time it will take any new owner to complete due diligence, negotiate a price, complete the documentation for closing the sale, and clean up the building and grounds.

While it is on the market, Vestin is left holding the tab for $40,000 to $60,000 a month for security, real estate taxes, insurance and the cost of the capital it has tied up in the property.

Sources have said Vestin will not honor the wages and benefits owed former workers for their last pay period or for the medical costs incurred by former workers under the property's self-insurance program, which was underfunded.

Former workers are eligible for job placement assistance at the center established by Culinary Local 226, the Nevada Department of Employment Training and Rehabilitation and other area agencies after the Castaways was forced to close when Vestin executed a foreclosure order allowing it to seize cash and property as collateral for a mortgage loan.

The center will offer assistance to the Castaways' 650 former union and nonunion workers during a group orientation that will handle 50 former workers at a time through Friday.

"If people can make it down Wednesday or Thursday, it would be a good idea because there could be a crunch on Friday," he said.

Workers' needs are being assessed and they will be referred to on-site agencies that will be able to help them with job hunting, training and placement. The center will also offer help applying for emergency economic funds, utility payment assistance and unemployment insurance.

Laid-off workers should bring their picture identifications, Social Security cards, their last pay stubs, and layoff notification letters, if possible. For added information, former Castaways workers should call the Castaways employment assistance hot line at 657-3335.