Las Vegas Sun

April 21, 2019

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Bullish European investors eye casinos

Buoyed by a bullish new survey of the Las Vegas gaming market, a European investment group is intensifying its efforts to buy a Strip casino.

Boccardi Capital Systems Inc., headed by 30-year-old Italian resort investor Fabrizio Boccardi, is poised to complete a two-and-a-half year quest to find the right place to build a themed megaresort here, a company executive said Wednesday.

"We are in negotiations with a property on the Strip," said Corey Porter, president of development for Boccardi Capital.

"We're very, very close. The deal may be finalized by the end of next week. But because of confidentiality agreements with the seller, we can't disclose who it is," she said.

Casino owners considering selling a property generally insist on confidentiality until a deal closes, in part due to concerns that workers worried about their posts under new ownership might seek other employment, leaving the operation under-staffed in a tight job market.

But a survey released by Boccardi's Los Angeles-based public relations firm Wednesday dropped some tantalizing hints about the possible seller.

The survey quotes Economics Research Associates President Austin Anderson as saying, "The report substantiates our knowledge that the center of gaming activity lies in the heart of the Las Vegas Strip."

The survey, conducted by ERA and the Arthur Andersen consulting firm, also disclosed that Boccardi Capital "is on target in considering an on-Strip location, with final negotiations on a selected property under way ... (in) the most desirable location to acquire."

The survey's release, part of a Boccardi Capital marketing strategy designed to counter skepticism about the feasibility of building new resort projects here, has heightened speculation the company is looking at either a 15- to 16-acre site near the Polo Towers or the New Frontier.

Both sites are located on the Strip. The Polo Towers site consists of parcels owned by five different entities, including Lakes Gaming Co., a spinoff of the Grand Casinos Inc. company acquired by Park Place Entertainment Corp. earlier this year.

The Polo Towers site has about 500 feet of Strip frontage -- more than that of the MGM Grand just to its south -- and another 1,000 feet along Harmon Road, across from the new $1.5 billion Aladdin hotel-casino due to open next summer.

The Sun has learned that an offer has been made to the Polo Towers site's owners, who are seeking about $120 million for the parcel. The identity of the potential purchaser wasn't disclosed.

The New Frontier is further north along the Strip and across from the Desert Inn, which is being acquired by South African resort developer Sol Kerzner's Sun International Hotels Ltd.

Kansas businessman Phil Ruffin bought the Frontier from Margaret Elardi last year for about $165 million and has acknowledged he's received an offer for the hotel-casino he renamed the New Frontier. Ruffin didn't identify who made the offer.

Boccardi Capital's principal, Fabrizio Boccardi, has invested in and developed several European resort projects, including at least one on the French Riviera.

He has assembled an impressive team for his firm's Las Vegas project, including the French gaming concern Groupe Partouche SA and Perini Building Co. of Phoenix, which has been retained to oversee construction of the proposed mega-resort.

Group Partouche operates 20 casinos in France, Belgium, Morocco and Tunisia. The publicly traded company posted revenue of about $445 million in 1998. Porter described Partouche as "a co-founding member" of the Boccardi group, which includes other investors from both Europe and the United States. Their identities haven't been disclosed, though a Perini executive described them as "big players."

Perini has built some of the top hotel-casinos in Las Vegas. Its most recent project, the Paris Las Vegas resort owned by Park Place Entertainment Inc., has generated rave reviews for the quality of its construction.

Last year, a Perini executive told the Sun the Boccardi project "is unlike anything we've ever built ... an engineering challenge that will exceed the Luxor as one of our greatest building endeavors and change the look of resorts in Las Vegas."

On Wednesday, another Perini executive said the original design has been modified, but wouldn't disclose details, citing a confidentiality pact with Boccardi Capital.

However, Boccardi has previously disclosed the project would contain 2,500 to 3,000 rooms, a 100,000-square-foot casino and five to six restaurants.

"The project would be a dramatic landmark enterprise that goes beyond gaming," Porter said Wednesday. "It will take Las Vegas gaming and entertainment to a whole new level."

James Lee, a Boccardi spokesman in Los Angeles, said the survey results released Wednesday show the Las Vegas gaming market can support more high-concept casino developments.

"But it requires a powerful concept that will draw additional visitors instead of just shifting people from one property to another," he said.

"Our analysis indicates that with the right combination of innovation, management and concept, the Las Vegas market is capable of absorbing additional properties," said Steve Comer of Arthur Andersen. "New projects, such as Boccardi Capital Systems' proposal, that can meet those challenges can succeed in the current environment."

"This study reinforces the belief that the gaming market in Las Vegas will continue to grow," said ERA's Anderson.

The survey also concluded that "A well-conceived project that emphasizes gaming could achieve pre-eminence in a market where gaming is currently being downplayed in favor of retail and entertainment activities."

Normally, would-be casino developers commissioning feasibility studies disclose results only on a confidential basis to potential financial backers. Lee said Boccardi released the results publicly to counter cynicism about the market's viability.

"The feedback we've gotten is that some people are skeptical," he said. "This substantiates our belief that a unique marketing concept, management expertise and proper execution can make this a successful project."

While Boccardi Capital hasn't released any information on its capitalization, team members privately express confidence it has the ability to finance a project in the $800 million range.