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Gaming Guru

Rod Smith
 

Las Vegas County Club Counters Wynn's Campaign

24 June 2004

LAS VEGAS -- The Las Vegas Country Club board launched a counterattack to a hostile takeover campaign by Las Vegas developer Steve Wynn, club members said Wednesday.

"This is the hottest potato in town right now just because there's so much politics around it," said one member who asked not to be named.

Other members noted that many of the major decision makers in Las Vegas are club members and have an interest in how the issue comes out.

However, they said opinion is sharply divided, with some members arguing the only membership golf club in town needs to be preserved and others saying the time has come to put to better use the land and the water rights that come with it.

Club members this week received letters from the board describing a $40 million offer from Wynn Resorts as "unsolicited" and "hostile."

Wynn last week offered to pay $50,000 to each of the club's full equity members and $25,000 to half equity members and to pay off $7 million in outstanding debt to buy the landmark Las Vegas Country Club on Joe W. Brown Drive across from the Las Vegas Hilton.

Wynn Resorts already is developing an 18-hole golf course, designed by Tom Fazio and Wynn, on the old Desert Inn site, but Wynn Resorts spokeswoman Denise Randazzo said her company needs a second course to handle overflow demand a second tower will generate.

Several members speculated that Wynn is really after the water rights, which he may need to support water features at his Wynn Las Vegas development.

Others speculated that he may want to redevelop the entire country club, and possibly the Las Vegas Hilton as well, as another megaresort.

Wynn was in China and was unavailable for comment. Las Vegas Country Club officials could not be reached.

On Monday, Wynn Resorts hand-delivered a more specific bid letter to David Smith, president of the Las Vegas Country Club's board of directors.

The offer is considered unsolicited and hostile because the board was not given an opportunity to evaluate it on behalf of members before an offer letter and irrevocable proxy were distributed to all country club members.

Further, the board argued in its letter that there are representations made in the Wynn Resorts correspondence, including the question-and-answer enclosure, that are not accurate.

"As a result of these communications, your board has retained counsel to assist it in analyzing the offer on behalf of the membership," the board said in its letter to club members.

The board advised members not to sign or return the proxy until it has had an opportunity to analyze the offer and make a recommendation.

"If you sign and return this document, you are giving away your right to evaluate and vote on the Wynn Resorts proposal and you will not have any opportunity to change your mind at a later date," the board said.

In addition, some club members said the board is offering to sell back club memberships it recently bought, since the board's treasurer, who holds those memberships, could not vote on Wynn's offer.

In addition to Wynn's offer, unconfirmed rumors of two other takeover efforts surfaced Wednesday, one by the so-called BBX Group and a third by an unnamed group supposedly holding conversations with individual members.

The board's letter said more is involved than the money because the country club has become a way of life for many members.

"As your board we are prepared to seriously evaluate this Wynn Resorts offer. Although we intend to approach this matter with open minds, we must advise you that the last appraisal of the real estate owned by our club ... was dramatically higher than the Wynn Resorts proposal," the board letter said.

The Las Vegas Country Club site was first developed in 1920 as Anderson Field, Las Vegas' first airport, which was later renamed Rockwell Field.

It was moved to a new site near what is now Nellis Air Force Base in 1929, but the air strip was maintained for occasional use, especially by private aircraft.

A thoroughbred racetrack, originally named Thunderbird Downs and later called Las Vegas Downs and Joe W. Brown Racetrack, was built on the site in the 1950s.

Brown, who owned and operated a gambling casino in New Orleans, bought the property out of bankruptcy in the early 1960s and sold it to Marvin Kratter of Nevada Equities, who built the first true country club in Las Vegas.

Work on the course was wrapped up in 1967 and the clubhouse was finished in 1968 when Kratter opened it as the Las Vegas International Country Club.

In the late 1960s, he sold it to the Bonanza, a Strip hotel at the time, and it was renamed the Bonanza Country Club and Corral.

In late 1970, it was sold to four partners of Realty Holdings -- Moe Dalitz, Harry Lahr, Nate Adelson and Irwin Molasky -- who renamed it the Las Vegas Country Club and took it private in July 1971.