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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Warner Gaming seeks to take over operations at Hard Rock

25 February 2011

LAS VEGAS, Nevada -- Warner Gaming LLC is seeking to take over casino operations at the Hard Rock Hotel in under a plan to be considered Thursday by state gaming officials.

The Hard Rock is on the agenda of a special meeting of the state Gaming Control Board and the Nevada Gaming Commission in Carson City, according to a senior regulator.

"It is a special hearing to consider a new gaming license," Gaming Control Board Chairman Mark Lipparelli said Tuesday.

If the plan is approved, he said, Warner Gaming will take over Hard Rock's gaming license and casino operations from Morgans Hotel Group Co. Morgans Hotel Group manages the hotel-casino and is a minority investor.

The Hard Rock Hotel has been struggling to meet its monthly loan payments on more than $1.25 million in debt. In a court filing, Hard Rock was accused of missing a $460,000 debt payment that was due Feb. 1.

Lipparelli said it wasn't a sure thing that state gaming regulators would approve Warner Gaming's plan for the hotel.

Based in Las Vegas, Warner Gaming was founded in 2008 by former Station Casinos Inc. Chief Operating Officer William Warner. The company obtains private or public financing for the acquisition or development of casinos and offers development and management services.

Warner would take over operations under an agreement reached with Hard Rock lender Brookfield Asset Management Inc.

Andrew Willis, a spokesman with Brookfield in New York, said the lender had signed a confidentiality agreement concerning ongoing negotiations over the Hard Rock Hotel and could not comment. Messages seeking comment from Warner and Morgans Hotel Group were not returned.

The Hard Rock Hotel, owned by Hard Rock Hotel Holdings LLC and Credit Suisse Group AG, reached an agreement this month to delay an involuntary foreclosure by minority lender NorthStar Realty Finance Corp. The lenders have agreed not to seek to foreclose on the property until the agreement expires Monday.

In a filing on Feb. 3 with the New York Supreme Court, NorthStar argued that the "best chance of recovering the largest portion possible of its $95 million loan balance" was to take control of the Hard Rock Hotel.

The Hard Rock Hotel was built in 1995 and completed a $750 million renovation and expansion less than a year ago.