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Best of Liz Benston

Gaming Guru

Liz Benston

Owners Plan Lady Luck Renovation

16 May 2005

The management company running the Lady Luck casino has purchased the downtown property from its landlord and plans to remodel it in addition to expanding the casino and hotel.

Las Vegas-based Henry Brent Co., whose majority owner is Timbers bar and grill chain founder Andrew Donner, last month purchased the 758-room property for $10.3 million from a private real estate company based in Newport Beach, Calif.

Henry Brent is working with Strip casino architect Klai Juba on a major remodeling effort that will involve gutting and refurbishing parts of the property, Donner's business partner Keith Grossman said. The company also expects to add about 20,000 square feet to the casino floor and eventually build up to 1,000 hotel rooms at the site of two old towers on the property -- one at two stories and another four stories high.

The remodeling work is expected to begin in about three months and cost up to $25 million. The entire master plan, including the expansion, could take up to three years, Grossman said. The Lady Luck's existing 780 or so employees, minus a few management workers who were with the former landlord, will remain with the property, he said.

The management company, which had the first right to purchase the property as part of its lease agreement, jumped at the chance to buy the Lady Luck, Grossman said.

"Our plan all along was that we'd be the tenant and operate the casino," he said. "We always had a desire to buy the property but we just didn't think it would come up."

The Newport Beach company that sold the Lady Luck, called Steadfast AMX, was new to Las Vegas and intended to enter the timeshare business.

AMX converted about 16 hotel rooms on two floors to timeshares as individual signed up to buy, attracting more than 600 owners.

Grossman said he didn't know why AMX decided to abandon its timeshare experiment downtown but said the Lady Luck was the only casino and only Las Vegas property for the company, which owns other commercial buildings in California. AMX officials could not be reached by press time.

Henry Brent Co. intends to halt the conversion of additional timeshares but will honor the ownership rights of those who have purchased units so far.

The Lady Luck has struggled under various owners in recent years and has tried several marketing strategies including affiliating with national hotel reservation systems.

Grossman said he is bullish on the Lady Luck's future downtown, which has an emerging cultural district in addition to several high-rise residential towers under development.

"The timing is great. Instead of one person trying to come in and doing something downtown you've got a lot of new owners coming in" and trying new things, he said.

Last year the company bought 3,500 square feet of business space across Third Street from the Lady Luck. The site of the former Trolley Stop casino, the frontage has been converted into a series of restaurants, bars and nightlife venues that will open in late June.

Those include the Hogs and Heifers bar, a slot bar called Cuba, a blues bar called Blue and a steakhouse called Triple George Grill. The company will open more attractions later this year along the single block of Third Street, which has been closed to traffic and transformed into a landscaped promenade.

Henry Brent Co. in 2003 received a two-year, limited license from regulators to operate the property because of concerns that the company -- new to casino management -- was thinly financed. Donner, who loaned money to the company, was initially prevented from being involved in the casino's management because he had made mistakes on his tax returns. Regulators are expected to vote on whether the company can receive a permanent casino license in September, Grossman said.