Las Vegas Sun

March 28, 2024

Tax woes could sink Debbie

In "The Unsinkable Molly Brown," a scrappy Debbie Reynolds fights to keep her bar in Colorado's pioneer days.

Today, Reynolds is fighting to hold onto her Las Vegas hotel.

The County Commission Tuesday followed a recommendation by the Department of Business License to take civil action against the Debbie Reynolds Hotel & Casino Inc. if it doesn't pony up the $90,000 it owes for four months of delinquent room taxes.

Commissioner Paul Christensen abstained because his cousin, city of Las Vegas Councilman Matt Callister, represents the hotel, located on Convention Center Drive near Las Vegas Boulevard.

Callister said the hotel has fallen behind on taxes because "they've had a substantial delay in refinancing."

The hotel also has no casino right now because all 182 slot machines and two blackjack tables were removed on March 31 by Jackpot Enterprises Inc. in a contract dispute.

The company announced it had received a $10 million loan commitment from CS First Boston Mortgage Capital Corp. to bring the property from the edge of bankruptcy. The loan, including a new first mortgage, will enable the 193-room hotel to pay off unpaid bills of more than $3.5 million.

The two-year loan requires that the hotel is appraised at $20 million.

Callister said the loan was delayed because the lender has asked for additional equity. "I'm confident it can be resolved," he said. "We're targeting Friday for refinancing."

In April, CS First Boston approved the new first mortgage.

At the time, CEO Todd Fisher, Reynolds' son, said it was also a big boost to the company's effort to win a gaming license.

The two-year loan has several conditions. A key requirement is that the hotel is appraised at $20 million.

The loan is secured by revenue from the hotel's time-share unit. CS First Boston will provide $8.5 million immediately, and an additional $1.5 million when the hotel receives a gaming license.

The first $8.5 million loan will bear interest at 500 basis points over the London Interbank Offer Rate. One hundred basis points equal 1 percent. When the remaining $1.5 million is lent, the interest rate on the entire loan will step up to 600 basis points over LIBOR.

The new loan will replace an existing first mortgage held by Bennett Management & Development Corp.

Reynolds is chairwoman and controlling shareholder of Debbie Reynolds Hotel & Casino Inc. Her 2.4 million shares have lost more than two-thirds of their value since last summer. The company owes her $1 million.

After 46 years in show business, Reynolds, 64, easily maintains a happy facade. Her screen credits include "Singin' in the Rain" and the Oscar-nominated starring role of Molly Brown, the Colorado socialite who survived the sinking of the Titanic.

Reynolds has pledged her Beverly Hills, Calif., home as collateral for loans to the hotel.

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