Friday, Nov. 19, 2010 | 2:35 p.m.
FX Luxury-owned land
Instead of an Elvis Presley-themed hotel-casino, land across the street from CityCenter on the Las Vegas Strip will continue to be occupied by small retailers and restaurants.
That's the bottom line in a bankruptcy reorganization plan involving more than half a billion dollars in debt.
The reorganization plan received final approval this week for the company controlling the 17.72 contiguous acres of land at the southeast corner of Las Vegas Boulevard and Harmon Avenue.
Las Vegas Bankruptcy Judge Bruce Markell gave final approval to the latest revision of the plan in which the land's owner, FX Luxury Las Vegas I LLC, will see its interest in the property wiped out but will have an option to re-invest in the property by buying a 5 percent stake in the successor company.
FX Luxury is controlled by American Idol TV show owner Robert F.X. Sillerman and co-investors. When their plans for an Elvis Presley-themed resort for the property fell through, FX Luxury defaulted on its mortgage and the company filed for bankruptcy in April.
Efforts by Sillerman and his coinvestors to hold on to the land during the bankruptcy case were rejected by second-lien lenders, led by their agent NexBank of Dallas.
The second-lien lenders, which reached a compromise with first-lien lenders, are now creating a new company to own, invest in and manage the property.
FX Luxury in a regulatory filing said the plan calls for the land to be encumbered by a new mortgage notes issued by existing lenders totaling up to $266.5 million.
The new notes will replace debt held by first-lien lenders led by German bank Landesbank Baden-Württemberg. They're owed $270.8 million.
Second-lien lenders owed $233 million are swapping debt for equity.
First-lien lenders will have a "contingent profits" interest in the new company of 4 percent of profits until the second-lien lenders recover their $233 million, and 10 percent after that, FX said.
The second-lien lenders that proposed the plan that was approved include Five Mile Capital Pooling International LLC, the Huff Alternative Fund L.P., the Huff Alternative Parallel Fund L.P., Spectrum Investment Partners L.P. and Transamerica Life Insurance Co.
The plan calls for capital commitments of $8.75 million by the new owners to fund costs of the bankruptcy and property operations. This number includes cash up front as well as cash flow to be set aside for tenant improvements, capital spending and leasing commissions.
Attorneys for the second-lien lenders that proposed the plan said the lenders have hired Urban Retail Properties LLC of Chicago to manage the property, which includes tenants such as a Travelodge motel, Harley-Davidson Cafe, Smith & Wollensky restaurant, Fatburger, McDonald's and Walgreens.
Urban previously managed what was called the Desert Passage mall at the Aladdin resort on the Las Vegas Strip across Harmon Avenue from the FX land. That mall is now the Miracle Mile Shops at the Planet Hollywood resort.
"The location of the (FX) property is excellent for retail," Paul Motta, president of leasing at Urban Retail Properties, said in a court declaration.
He said Urban Retail would focus initial leasing efforts on the Hawaiian Marketplace, which includes a shopping center and outside kiosks. Some 43,000 square feet of the 67,000 square feet of interior retail space there are vacant, he said.