Monday, April 27, 2009 | 2 a.m.
So far, Jeff Soffer and his Fontainebleau Las Vegas LLC have the upper hand in their public relations war against banks that have threatened to halt $790 million in funding for the $2.9 billion Fontainebleau Resort under construction on the Las Vegas Strip.
When the banks respond, that may change.
The unspecified "event of default" revealed in Fontainebleau's lawsuit might relate to a lack of faith in Fontainebleau's ability to make payments on its debt, as spelled out earlier this year by credit-rating agencies Standard & Poors and Moody's.
They said, plain and simple, that Fontainebleau may default on its debt obligations because of a lack of condominium sales and because the trend of reduced visitation to Las Vegas is expected to continue after Fontainebleau opens later this year.
And, as a source told TheStreet.com financial news Web site, the default may be associated with the project being over budget.
Also, the bankers aren't oblivious to problems elsewhere in Soffer's Las Vegas portfolio that is dominated by his Turnberry brand, which led the high-rise condo trend in Las Vegas.
There is plenty of unleased office space at Turnberry's Town Square development -- no surprise given the over-built state of the Las Vegas office market.
And just days before suing the banks over Fontainebleau funding, Soffer and several of his Turnberry companies were themselves sued by Prudential after apparently weak condo sales at Turnberry Towers on Paradise Road and Karen Avenue led to Prudential taking over that project.
It's unclear if the lenders being sued over Fontainebleau -- such as Bank of America, JPMorgan Chase and Deutsche Bank -- actually want to walk away from the project.
If so, they'll face more heat as some have received federal bailout money.
Their counter-argument may be that Congress didn't intend for the banks to lose taxpayer dollars on money-losing projects. And bank regulators and shareholders likely wouldn't appreciate that, either.
Or, is their declaration of default simply legal jockeying? This would be aimed at improving their security interest in the project -- much like Dubai World seems to be doing with its lawsuit over CityCenter.
Two executives in the Las Vegas gaming industry have joined Hong Kong-based Galaxy Entertainment Group Ltd., operator of casinos in Macau.
Former Planet Hollywood Las Vegas CEO Michael Mecca, who left that resort in January, becomes president and COO at Galaxy. Before joining Planet Hollywood, Mecca managed Green Valley Ranch resort and earlier worked at Greektown Casino in Detroit, Mandalay Resort Group and Caesars World.
Also this month, Robert Drake was named chief financial officer at Galaxy. He had been vice president, finance of Harrah's Entertainment Inc.'s Western Division in Las Vegas that includes 13 Harrah's properties in Nevada.
Moving the other direction is Scott Peterson, who was named senior vice president and chief financial officer at Wynn Las Vegas. He had been vice president and CFO at Wynn Resorts Macau.
Nevada Public Radio has launched "[email protected]," an online and on-air outreach campaign designed to provide residents with a centralized source of reliable information on the foreclosure crisis.
The program offers information on local agencies and social-service organizations that may be able to help Nevadans facing foreclosure.
The campaign is a collaborative effort between Nevada Public Radio; local nonprofits, including Nevada 2-1-1 and Consumer Credit Counseling Services; and financial institutions such as Wells Fargo and the Federal Reserve Bank of San Francisco.
"Our goal for [email protected] is to use Nevada Public Radio’s unique position as a trusted, high-profile community partner to connect individuals affected by the mortgage crisis with resources and organizations that can help them make sound decisions about their futures," said Nevada Public Radio General Manager Florence Rogers.
"The foreclosure crisis has affected thousands of southern Nevadans who have never needed to ask for help before, and it’s impacting our community in unprecedented ways," she added. "We know both anecdotally and through research that local residents are having a hard time gaining access to reliable information they need to make decisions about their future. That’s where [email protected] comes in."
The centerpiece of the [email protected] campaign is a Web site, www.nvhopeathome.org, which features content from both Nevada Public Radio and Vegas PBS, as well as financial workbooks, site links and other online tools. In addition, KNPR’s State of Nevada, the station’s weekday public affairs program, will feature a segment on the mortgage crisis and related topics every Thursday during the 10 a.m. broadcast.
Nevada State Bank is hosting a free one-hour "webinar" on Thursday titled "Making Sense of the New SBA Lending Rules." A panel of experts at the online event will explain how business owners can take advantage of changes in Small Business Administration lending rules contained in the federal government’s new stimulus plan.
Speaking at the webinar and taking online questions will be John Scott, Nevada District director for the SBA; Guy Chaffee, vice president, corporate lending, Nevada State Bank; and Bob Hart, vice president, corporate lending, Nevada State Bank.
Topics will include which loans can — and can’t — be refinanced to get more favorable terms; how to take advantage of loan options featuring no out-of-pocket fees and how new government guarantee limits can reduce the cost of new loans. The interactive webinar, which will run from 9 a.m. to 10 a.m., may be accessed by telephone or over the Internet. The public can register by visiting www.nsbank.com/sba or by calling 866 618-3420.
The Jewish Channel (TJC) announced that it is available to Cox Communications subscribers in Las Vegas on a subscription on-demand basis on Channel 1.
"Many have described us as a Jewish HBO," said Aaron Hornung, a spokesman for TJC, noting that the channel is "like a Jewish film festival in your living room."
For more information, see www.tjctv.com.
During the week of Earth Day, McCarran International Airport said it expanded its recycling program in public areas so passengers can recycle trash and other items while traveling through the airport.
McCarran said that since 2000, it has recycled non-traditional items like paint, carpet, electronics, batteries, tires and oil.
In 2006, the airport formed a recycling committee to begin tracking existing practices and oversee the implementation of new recycling programs. One of the committee’s first initiatives was a desk-side recycling program, which for the past three years has diverted approximately 24 tons of plastic, aluminum and paper annually from local landfills.
Earlier this year, recycle bins were also placed in all Clark County Department of Aviation employee break rooms, allowing staff to recycle waste generated on breaks and during lunch.
"McCarran’s employees, tenants and customers generate approximately 14,300 tons of garbage each year, much of which is recyclable," said Randall Walker, county director of aviation. "Now that we’ve placed recycle bins in the terminal and increased our internal recycling efforts, we hope to divert as much of that from landfills as possible."
About 50 recycling stations that include separate cans for trash, aluminum, plastic and paper were installed in Terminal 1’s baggage claim and ticketing areas, the esplanade and at all security checkpoints. The off-site McCarran Rent-A-Car Center will be equipped with the same stations at the end of the month.
McCarran has other environmentally friendly measures in place. Efforts to reduce air pollution and conserve energy include implementing a fleet of common-use, clean-burning biodiesel buses that run between the airport and the McCarran Rent-A-Car Center; requiring commercial vehicle operators to shut down their engines upon parking, loading or unloading customers; minimizing the release of volatile organic compounds by purchasing more water-based paints and non-aerosol cleaning products; providing central power and air conditioning units for aircraft at the gates; upgrading escalators and moving walkways with energy efficient equipment and upgrading airfield lighting with LED technology.
The department said it will continue to explore new ways to reduce the airport’s carbon footprint while generating a favorable impression among travelers.
Harrah's Entertainment Inc. celebrated Earth Day by noting a broad range of sustainability achievements and the development of a company-wide set of industry best practices and goals known as CodeGreen. CodeGreen aims to take the best innovations that emerge from employee teams at individual properties, and to systematize them enterprise-wide.
The programs are aimed at dramatically reducing energy consumption, improving solid waste and recycling programs through good procurement practices, creating a more sustainable supply chain, increasing renewable energy supply, reducing carbon and other greenhouse gas emissions and building strong partnerships with the Environmental Protection Agency, carbon offset supplier Native Energy and key nonprofit groups.
Harrah's CodeGreen achievements include:
--A 2008 EPA Region Nine Environmental Quality Award, the highest public recognition the EPA presents
--Leading the charge in "powering down" the Las Vegas Strip for the World Wildlife Fund's Earth Hour on March 28. Every Harrah's resort in Las Vegas participated as did 19 other Harrah's casino resorts across the country
--100 "Green H.E.R.O." employees throughout Nevada walked neighborhoods passing out 75,000 compact fluorescent bulbs donated by NV Energy to help residents become more energy efficient
--Las Vegas resorts and the Harrah's Foundation provided more than $700,000 in funding to upgrade the Teacher EXCHANGE, a re-use resource center where Clark County public school teachers can obtain slightly used computers, office furniture, and supplies
--Employees from Harrah's and Horseshoe Council Bluffs, Iowa, donated trees. In the last 10 years more than 10,000 trees have been distributed to neighbors.