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Las Vegas casino project Lucky Dragon sold

Thu, Apr 25, 8:41am by Staff Writer

Off-Strip casino project Lucky Dragon was sold for $36 million on Monday to a developer who wants to turn the building into a non-gaming hotel and conference space.

Don Ahern – who is the chairman and CEO of Ahern Rentals, a Las Vegas based firm that hire out heavy construction equipment – confirmed to the Las Vegas Review-Journal that he had acquired the Lucky Dragon and that he would “absolutely not” be keeping the name, which has proved to be anything but lucky.

The $160 million Lucky Dragon was one of the shortest lived casino ventures in Las Vegas history.

The first to be built from the ground up since the recession, the Asian-themed “boutique” casino opened its doors in 2016 with a mission to capture the Asian locals and high-roller markets.

Feng shui and Asian street food alone weren’t enough to tempt the target market down to the “wrong” end of the Strip, where the Lucky Dragon was tucked away on West Sahara Avenue.

They wanted decent comps like those on offer at Boyd and Station properties, which the Dragon – financially stretched from the outset – could not offer.

During construction, developer Andrew Fonfa asked Las Vegas City Council for $25 million in subsidies, adding that work on the project would be delayed or even abandoned without help.

The City rejected the request.

Doomed venture from the outset

The idea of propping up a private casino development with public money was unheard of, officials said.

Fonfa had previously claimed the project was “fully financed”, largely through $89.5 million in loans from Chinese families seeking US citizenship.

Under a program called EB-5, foreigners who invest $500,000 into US businesses that generate jobs are eligible to receive green cards, although these may now be in jeopardy.

In January 2018, the Lucky Dragon faced foreclosure and shuttered its casino and restaurants.

A month later it filed for bankruptcy.

Fonfa said the property was worth $143 million.

His main creditor, Snow Covered Capital, anxious for a quick sale so it could claw back its money, said it was worth less than half that.

It turned out to be even worth even less than the latter valuation.

Ultimately, the $36 million will not be enough to repay in full the $50 million owed to snow, but it could have been worse.

The property failed to attract any bids when it was offered for sale at auction last year.

The casino – a facility said to cover 27,500 square feet – closed in January 2018, and the 203-room hotel was shuttered in October that year under circumstances involving foreclosure.

Prior to the venue’s opening, its website described William Weidner, a former president and chief operating officer of casino group Las Vegas Sands Corp, as a senior advisor for the scheme.

Also originally associated with the project was Andrew Fonfa, developer of a US$240 million condominium project called Allure Las Vegas, located next to the Lucky Dragon site.

“It was very weird,” listing broker Michael Parks, of CBRE Group, said of the response.

Parks said the Chinese-themed resort did not have an asking price but that he and broken John Knott, head of CBRE’s global gaming group, were trying to get Snow Covered Capital’s money back.

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