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Tim O'Reiley

Investor gives rivalry of Las Vegas Strip wheels a new spin

23 August 2012

LAS VEGAS -- SkyVue, the 500-foot Ferris wheel rising across the Strip from Mandalay Bay, has quietly found an ally in its rivalry with Caesars Entertainment Inc.'s Project Linq.

Shotgun Creek Investments, headed by Wayne Perry, a prominent Seattle businessman and part-owner of baseball's Seattle Mariners, has "invested tens of millions" in the project and may put in more, according to a statement released Wednesday by SkyVue.

Exactly how much Perry's company has invested or will invest, and what form the investment will take, remains unclear. SkyVue developer Howard Bulloch declined to detail the terms of the investment other than to indicate that Shotgun Creek won't be the sole source of money to finish the $300 million project, and that he remains in control of SkyVue.

According to county records, Shotgun Creek in May loaned the project $3.5 million, and last week injected another $1 million. In June, it also purchased a $5 million loan made by Specialty Mortgage Corp. of Reno.

Bulloch said Shotgun Creek's investment is a loan, but that the company has "options to convert some of their debt" to an equity stake "moving forward."

Perry, who recently visited the construction site, issued a brief written statement through SkyVue that mentioned the competition between SkyVue and Caesars Entertainment's Project Linq.

"We've completely explored the effect of the Linq project; whether Linq is built or not, be believe SkyVue is a great project," Perry said in the statement. "More than anyone, we know the financial and legal situations of the SkyVue project and we are completely comfortable."

One such situation arose Feb. 23, when Specialty Mortgage filed a $31.4 million foreclosure action involving two SkyVue-related entities controlled by Bulloch and partner David Gaffin, Desert Land LLC and Desert Oasis Investments LLC. The foreclosure covered two parcels immediately to the south of SkyVue.

Bulloch said the foreclosure action came after unsuccessful talks aimed at restructuring the debt. He said the loans were paid off "immediately," bring the foreclosure to a halt. Bulloch said some of the financial help was from Shotgun Creek, but did not divulge specifics.

On March 5, Shotgun Creek's Facebook page announced, "We are excited to be part of the new Las Vegas Wheel project." This followed a Feb. 7 announcement promising news about "one of our new developments in Las Vegas."

Desert Land LLC and Desert Oasis Investments LLC also owed $598,000 in back taxes to Clark County on land near SkyVue, but became current between April and June.

Shotgun Creek's website notes that it "assembles and oversees a professional development and marketing team" for each of its real estate projects. Bulloch said that's a reference to himself and his SkyVue team.

In recent weeks, only a small construction crew has worked at the SkyVue site, which now has two towers more than 200 feet tall that will hold the wheel, plus massive concrete bases to anchor support cables. Bulloch said few workers are needed at this stage of construction.

"We're now to the point of precision, where things have to be within centimeters," he said.

He added that he was still on his previously announced schedule to open by the end of 2013.

SkyVue would have three sources of revenue once it opens, according to its business plan.

¦ Tickets to ride the wheel

¦ Income from renting 140,000 square feet of retail space and 21,000 feet for meetings and conventions;

¦ Advertising displayed on large video screens on the wheel's hub and exterior walls of associated buildings.

Bulloch wouldn't disclose how much of the retail area has been leased.

Project Linq is budgeted at $550 million. Rising behind the Imperial Palace hotel, its High Roller wheel will be the 550-foot tall centerpiece of a retail-and-entertainment center including 215,000 square feet of shops, restaurants and bars, plus a 70,000-square-foot entertainment venue. Last month, Jon Gray, Linq vice president and general manager, said 72 percent of the retail space had been leased.

The opening is listed as 2013, but with no specific date.

Although several places, including Moscow, Singapore and London have one wheel, Las Vegas would likely be unique with two. Market analysts have questioned whether there is enough demand to support both wheels, but both developers have consistently said they would be profitable.
Investor gives rivalry of Las Vegas Strip wheels a new spin is republished from