Thursday, Oct. 31, 2002 | 11:13 a.m.
Isle of Capri Casinos Inc. on Wednesday closed on the previously announced sale of its money-losing Lady Luck hotel and casino in downtown Las Vegas to a new business entity with plans to convert a wing of the property into timeshares.
The sale price to AMX Nevada LLC wasn't disclosed.
The Delaware-incorporated company is made up of a group of investors with a variety of real estate holdings including hotels and restaurants.
Hospitality Systems LLC, a new business entity, has signed an agreement with AMX Nevada to manage the hotel.
Marty Gross, chief operating officer of Hospitality Systems and a former executive at MGM Grand and the Mirage, will become general manager of the Lady Luck. Most recently, Gross was general manager of the Four Queens Hotel & Casino in downtown Las Vegas.
The Henry Brent Co., owned by Las Vegas businessmen Andrew Donner and Robert O'Neill, will manage the hotel's casino.
Donner and O'Neill also own the Timbers chain of pub restaurants and are already licensed to operate gambling establishments in Nevada. They would need to obtain an additional license to operate the Lady Luck casino.
An Isle of Capri subsidiary will continue to operate the casino for up to six months until the casino operator is licensed with Nevada regulators, Isle of Capri said.
AMX Nevada aims to continue with a previous Isle of Capri plan to convert the hotel's west tower into a timeshare complex.
The company's chief operating officer, Neal Bullock, is a partner in a San Clemente, Calif. company that offers marketing services for timeshare complexes nationwide.
Bullock had said the company plans to maintain the Lady Luck brand and is interested in promoting downtown revitalization.
He could not be reached by press time today.
The sale was relatively quick and smooth, Isle of Capri spokeswoman Lori Hutzler said.
Isle of Capri's broker, Jack Carr, agreed.
"The sale was one of those deals where you had a motivated seller and buyers with a unique business plan that seems to make sense for the downtown market," said Carr, a managing director with the hotel division of Insignia ESG.
Officials for both Hospitality Systems and The Henry Brent Co. said downtown's growth potential prompted their interest.
"Downtown has a great deal of potential and we really want to be a part of that," Gross said in a statement.
Gross said his management company aims to transform the hotel into a "premier downtown resort."
Mississippi-based Isle of Capri acquired the Lady Luck for $14.5 million in September 2000 as part of the company's purchase of Lady Luck Gaming Corp. It also acquired riverboat casinos in the transaction. The aging Lady Luck was generating negative cash flow for Isle of Capri and didn't fit into the company's focus on riverboat markets, analysts said.