Gaming officials schedule special meetings for Hard Rock

By Steve Green

Thursday, Feb. 3, 2011 | 8:28 p.m.

The State Gaming Control Board and the Nevada Gaming Commission have scheduled special meetings for Tuesday in Carson City to deal with the Las Vegas Hard Rock hotel-casino, should a lender succeed in foreclosing on the property.

The agenda includes applications from the lender, NorthStar Realty Finance Corp., and its proposed contract casino operator, Navegante Gaming LLC.

If approved, the application for NorthStar would give it a waiver or exemption from licensing, at least temporarily, related to its “enforcement of a security interest” in the Hard Rock.

Navegante, owned by Larry J. Woolf and managed by his son Larry D. Woolf, is already licensed for other Nevada properties.

In a New York court filing Thursday in a lawsuit the Hard Rock filed to block NorthStar’s foreclosure, longtime Las Vegas gaming attorney Jeff Silver of the firm Gordon Silver said he’s been talking with Gaming Control Board Chairman Mark Lipparelli and is confident Navegante can be licensed to run the Hard Rock on Tuesday.

In Nevada, the full-time Gaming Control Board makes licensing recommendations and the part-time Gaming Commission has the final say.

Silver, who represents NorthStar, noted Navegante in the past has been approved by the Gaming Commission as operator of the Sahara, Plaza, Gold Spike and other properties.

Silver, in a court declaration, said he’s also been talking with Jacqueline Holloway, Clark County’s director of licensing, and Silver said he was assured that should the Gaming Commission approve Navegante as the operator of the Hard Rock, the county would immediately grant temporary approval of Navegante’s application as the property’s gaming and liquor operator.

Separately, in the New York lawsuit on Thursday, attorneys for NorthStar submitted a declaration from Mitchell Roschelle, a CPA, partner and national Real Estate Business Advisory Services practice leader for accounting firm PricewaterhouseCoopers.

Roschelle said in his declaration that the Las Vegas Hard Rock is insolvent as it is unable to satisfy its current operating and financial obligations, its cash flow is insufficient to cover debt service and operating expenses, and its reserve accounts to cover those shortfalls have been depleted.

The Hard Rock recently had the opportunity to extend the maturity date of about $1 billion in senior loan obligations for two years at an annual cost of $4.1 million but chose not to do so, he said.

That’s “probative evidence of current insolvency as well as evidence that a return to financial viability is unlikely in the foreseeable future,” Roschelle said in his statement.

One of NorthStar’s arguments in favor of foreclosure is that the Hard Rock is in default on debt obligations in part because it’s technically insolvent. Hard Rock attorneys have denied that and said NorthStar’s initiative is interfering with a consensual restructuring of the property’s debt.

Separately, senior lenders Brookfield Financial LLC and Vegas HR Private Ltd. sued NorthStar in New York Supreme Court this week, seeking to block its foreclosure of the Las Vegas property.

The lawsuit said NorthStar’s efforts are aimed “to gain advantage over two senior lenders through the means of an unlawful, non-judicial foreclosure sale.”