Golden Palm to be shuttered, sold

NEVADA -- The Golden Palm Hotel is in its final days.

The property's owners, who tried and failed to redevelop the Golden Palm for the past seven years, decided to close the property March 12 and sell it by sealed bid April 5. The property's casino has been closed for more than a year.

The Golden Palm's site, on a 3-acre island on the southeast corner of Tropicana Avenue and Dean Martin Drive, made expansion difficult; the property is bordered by a flood channel to the south and Interstate 15 on the east.

The land the Golden Palm is on was appraised at $46.6 million in November. The property, which is in the gaming enterprise district, now has Clark County approval for a 41-story hotel tower with 560 rooms, 100,000 square feet of shops and restaurants and a 31,000-square-foot casino.

An official for Gold Rush Casino & Hotel, Golden Palm's parent company, said rising construction costs and failure to line up a joint venture partner prompted the property's sale.

NRC Realty Advisors, a Chicago-based real estate firm, is handling the sale, which has been advertised globally in The Wall Street Journal and through direct mailings to high-income investors and commercial and real estate investors.

NCR Executive Managing Director Evan Gladstone said the company has received 95 inquiries about the property. Gladstone said the 150-room, six-story hotel is a "tear-down property" and that the land will have to be scraped clean and development started from scratch. He said the company will hold a bid seminar for the property March 16 at Wynn Las Vegas.

Gold Rush President and Chief Executive Officer Marvin Lipschultz said the property will not necessarily go to the highest bid but to the bid that best fits the property. He added that the property could be sold outright or could be part of a joint venture with the current owner.

"If someone put up $30 million and wanted me to absorb the rest, it might be something I looked at," Lipschultz said.

He believes that only a boutique project would work on the small parcel in the current market. He said his earlier plans for a 20-story hotel-casino called South Beach collapsed as building and construction costs rose.

"I'd like to get a four- or five-star hotel," Lipschultz said.

Lipschultz said he wasn't willing to go into debt, so he started looking for joint venture partners a couple of years ago. The inability to expand the land into neighboring properties kept many possible joint-venture partners, including Station Casinos, away, Lipschultz said.

The hotel was built in 1980 and operated by Travelodge and then Howard Johnson. Lipschultz bought the franchise in 1999 for $6.5 million. Two years later the underlying land was purchased for $3.7 million and the name was changed to Golden Palm.

Lipschultz said he last tried for a joint venture in November 2005, joining restaurateur Charlie Palmer in a plan to develop the property into a large boutique hotel. The project collapsed four months later over financing. Gold Rush sued Palmer in District Court in August.

The failed deal forced the surrender of the property's gaming license, shutting down the property's 56 slot machines in January 2006.