Friday, June 7, 1996 | 11:59 a.m.
Stratosphere Corp. reported lower-than-expected results for its first five weeks of operation and said it would borrow nearly $50 million to finance "enhancements" to the property.
The company said casino revenue was $7.7 million and total operating revenue $19.1 million.
"These results are below the company's expectations principally due to the project not being fully completed," said Stratosphere President Dave Wirshing.
He didn't say how far below expectations the results were.
Wirshing said 444,715 visitors ascended the resort's 1,149-foot-tall tower since the April 29 opening. At $7 per ticket for the elevator ride to the tower's pod area, that would account for about $3.1 million of revenue.
Occupancy for the resort's 1,500 finished rooms averaged 80 percent at an average daily rate of $71, he said. That equates to about $3 million in revenue.
"With new marketing programs and the addition of 1,000 hotel rooms, the opening of the retail shops and the completion of other amenities by the first quarter of 1997, we believe operating results should improve," he said.
Meanwhile, the company said Grand Casinos Inc., which owns 42 percent of Stratosphere common stock, has agreed to lend it $48.5 million pursuant to a previously agreed upon completion guaranty.
Most of the funds are for "enhancements to the original scope of the project," the company said.
The unsecured loan will bear interest at 14.25 percent and be subordinate to $203 million of first mortgage notes, Stratosphere said.