Wednesday, July 21, 1999 | 10:57 a.m.
Harrah's Entertainment Inc. on Tuesday announced it has agreed to sell the 447-room Showboat Las Vegas hotel-casino to VSS Enterprises LLC.
VSS Enterprises members include gaming industry veterans Michael Villamor, formerly of Primadonna Resorts and Gem Gaming, and Gregg Schatzman, formerly with Primadonna and Ameristar Casinos. Another member of VSS is Dan Shaw, a real estate developer and private investor.
The price of the sale wasn't disclosed. Harrah's executive Pat Martin and Villamor both cited a confidentiality agreement in declining to disclose terms of the deal.
However, Villamor said the only contingency is receipt of gaming licenses for the principals and approval of the deal by state regulators. He and Schatzman have been licensed in the past, while this would be Shaw's first gaming license.
Villamor said VSS was formed recently to capitalize on his and Schatzman's experience in the gaming industry. In addition, he said, "Dan has been a very close friend of mine for 15 years and we've always thought about doing a gaming project together."
Shaw is the principal in DKS & Associates, a real estate investment firm, Villamor said.
He said it was "too early in the process" to determine whether VSS will retheme the Showboat.
"It's currently in positive cash flow and the property's more than 1,000 employees have done a great job of getting it there," Villamor said. "We don't want to have any major disruptions in what they're doing."
The Showboat has lost market share to new properties built south of it along the Boulder Strip, and Villamor said he hopes to reverse that trend.
"Our goal is to identify our core clientele by studying the market more closely, and build on that," he said.
Harrah's acquired the Las Vegas Showboat when it purchased Showboat Inc. in June 1998, and has consistently said the property has been for sale.
Showboat had three other properties in Atlantic City; East Chicago, Ind.; and in Australia.
Harrah's rebranded the East Chicago operation into a Harrah's casino, is selling its interest in the Australia operation and plans to keep the Atlantic City Showboat.
Harrah's said Showboat Las Vegas employees will be offered employment by VSS upon closing of the transaction, which is expected by year-end subject to regulatory approval. VSS also agreed to honor labor contracts at the property, Harrah's said.
The property will be operated under the Showboat name for up to one year from closing under a license agreement.