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Gaming Guru

Richard N. Velotta
 

Owners End Negotiations to Sell Hacienda to NPS

8 September 2004

The owners of the Hacienda -- the first hotel-casino U.S. 93 travelers from Arizona see after they cross Hoover Dam -- have ended negotiations to sell the property to the National Park Service.

The Hacienda's owners, all executives of the Mandalay Resort Group, began formal talks with representatives of Lake Mead National Recreation Area last month after Secretary of Interior Gale Norton green-lighted spending $20 million for the purchase and restoration of the property south of Boulder City.

But in a news release issued Tuesday, the Hacienda's owners -- Michael Ensign, Bill Richardson and David Belding -- said they decided against the sale of the hotel and casino and 34 acres surrounding it.

Belding said today that he and his partners would continue to manage the development and that it is no longer for sale to any potential buyer. The dramatic change in direction resulted from the lengthy period that it would have taken the Park Service to take possession of the 300-room hotel as well as the pending $7.9 billion merger of the Mandalay Resort Group with MGM MIRAGE.

Belding said the timing of the Hacienda deal would have resulted in too much uncertainty for the property's 200 employees.

Belding said the Hacienda partners recently learned that the Park Service would not be able to take possession of the property for another two years. Meanwhile, MGM MIRAGE's plan to acquire the Mandalay Resort Group is expected to be finalized sometime early next year.

Belding said Mandalay properties helped provide jobs for displaced workers when a fire severely damaged the Hacienda -- then known as the Gold Strike -- in June 1998. Belding said there was too much uncertainty for how displaced workers would be accommodated if the Hacienda were closed after the MGM MIRAGE-Mandalay deal is completed.

"Not all business decisions have to be based on economics," Belding said. "There was an overriding human factor in this decision."

He added that there are no negotiations planned with other potential buyers.

Last month, Belding said there were other interested buyers for the property that has been owned by the Ensign family since 1953 and co-owned with the Belding and Richardson families since 1977. Belding said the owners have been approached by other developers, including one interested in building high-rise residential towers on the site.

"We're disappointed that they (Hacienda owners) have decided not to sell," said Lake Mead National Recreation Area spokeswoman Kay Rohde. "There was a lot of support for it and we were excited for the opportunity to acquire it."

The Park Service attempted to buy the property prior to the creation of Lake Mead National Recreation Area in 1964. Eventually, the Park Service bought 87 undeveloped acres around the property in 1973 as part of a federal court eminent domain settlement, but was unable to reach an agreement on buying the rest of the acreage.

The court settlement specifically prohibited the Park Service from discussing a sale unless approached by the casino owners first. Rohde said the Park Service would remain bound by the settlement agreement and would not re-approach the owners about a potential deal.

Belding said last month that the owners wanted to give the Park Service the first crack at buying the property, leading to an Interior Department review and the authorization to spend $20 million on an acquisition.

The government was looking to convert the property into either a visitor center for Lake Mead and Hoover Dam, regional offices for the Park Service or a training center. Park Service officials said if they took possession of the property that they would probably tear down the 16-story tower, long considered an eyesore by environmentalists and park managers.