Issue 222
December 13 - 19, 2004
Volume 4
page 2
 

Caribbean resort aims higher to attract high-rolling gamblers
As reported by The Miami Herald

BAHAMAS - The owner of the mammoth Atlantis resort in the Bahamas announced Wednesday it was dropping plans to replicate the hotel with an even larger complex next door, opting instead for a smaller, pricier resort.

Instead of building a 1,500-room tower within sight of Atlantis' signature Royal Towers in Nassau, Kerzner International wants to develop a 600-room hotel, as well as a 400-unit condominium-hotel complex with Aventura-based Turnberry Associates.

The decision marks the first significant reworking of a global expansion plan that would double Kerzner's balance sheet over four years.

Company executives hailed the changes as their best chance to leverage the success of Atlantis, the pink 24-story resort that attracts roughly one million guests and day-visitors a year.

In promising a luxury all-suite hotel modeled after high-end Las Vegas casinos, executives said they want to attract affluent travelers underwhelmed by the 1,200 mostly standard-issue rooms found in the Royal Towers.

"Atlantis has always been outstanding for families, but this is a product that's probably more [attractive] for the casino customer," said the firm's chief marketing officer Howard Karawan. "It's certainly exciting for us that what's being developed in the Bahamas is on par with what's being done in Las Vegas."

The new plans also brought lower profit projections -- down from between $110 million and $120 million in gross earnings a year from the hotelto about $100 million. Kerzner executives declined to predict what profits would come from the planned condo-hotel complex.

A rendering of the proposed expansion shows two Mayan-style buildings flanking a water park near the existing Royal Towers. Chief Executive Butch Kerzner told analysts Wednesday the new complex would offer a more private setting, segregated from the sprawling pool decks and water slides that are Atlantis' current trademarks.

"We're going to develop something that's going to be very exclusive," he said.

The new hotel and water park were always the centerpiece of the biggest expansion of Atlantis since its 1998 opening. Now the largest private employer in the Bahamas, Atlantis helped revive the country's tourism industry and now is trying to cement its position as a vacation destination unto itself. The expansion comes as another development group is trying to mount the first real challenge to Atlantis with a Vegas-style casino on Nassau beachfront. Developers of the proposed Baha Mar resort have said they want to target the kind of adult gambler who feels more at home in Vegas than in the theme-park environs of Atlantis, with its aquariums and make-believe sunken-city hieroglyphics.

Karawan said the potential competition did not influence the revised plans. Kerzner's agreement with the Bahamian government gives it the right to operate one of two casinos allowed in Nassau. Kerzner had planned to spend about $800 million on the project, but now expects to spend only $600 million.

Kerzner also announced an 88-unit condominium complex near Atlantis. This will be the third time that Turnberry has partnered with a well-known resort to build a condo-hotel. "Atlantis is world class property that is known all over the world," said Jeffrey Soffer, principal at Turnberry Associates. 'How many people go there and say, 'I would want to own here' but have nothing to buy. Now they will."

With the Nassau expansion, a planned second Atlantis in the Middle East, British casinos and other resorts slated to double the company's $1.9 billion balance sheet, analysts have warned the growth might be coming too quickly. Butch Kerzner acknowledged those misgivings in discussing the scaled-back construction project in Nassau. "It does free up our balance sheet a little bit, which we think is not a bad thing," he said.

 

 

 

Developers take next step toward building new Hancock County, Miss., casino

As Reported by The Sun Herald

HANCOCK COUNTY , Mississippi - A group of developers moved a step closer Monday to building The Islander Casino when the Board of Supervisors passed a resolution creating a "special-use district" for the proposed site.

Kirk Ladner and partner Richard Childs want to build the casino on land near Bayou Caddy.

"We are very pleased that the county is being progressive," Ladner said. "We are happy to see Hancock County wants to move forward with economically sound businesses, that will bring more jobs and increase tax revenue."

Ladner said the group plans to build several high-rise condominiums and a golf course near the site, but will first need approval from the Mississippi Gaming Commission.

The Islander Casino is the third casino proposal filed this year with the county's Planning and Zoning Board and the second application filed by Ladner.

Ladner and business partner Russell Elliot are awaiting the commission's approval to build South Beach Casino and Resort, just east of The Islander, near Clermont Harbor.

Ladner and Elliot want to build a 14-story hotel and parking garage across from South Beach Casino, near Pointset Avenue. The developers expected a decision at last week's Planning and Zoning meeting, but because just four of the five commission members were present, the issue was moved to the Dec. 16 meeting.

A separate group of investors has already been approved by the state gaming commission to build the Silver Slipper, another Bayou Caddy casino. Construction is expected to begin sometime this month.


$4 Million Loan From Kennedy Funding Helps Developer Bring Gaming Enterprise to Mexico City

HACKENSACK, New Jersey- The owner/developer of an Acapulco gaming establishment is benefiting from a $4,000,000 expansion loan from direct private lender Kennedy Funding, based in Hackensack, New Jersey. The funds will allow them to expand their holdings into Mexico City, at a time when literally none of the banks in Mexico will finance commercial deals.

The plans for Mexico City focus on the conversion of a warehouse into two big bingo entertainment complexes. These centers will offer bingo in several variations, plus have broadcast facilities that will show major sporting events, and allow legal sports betting as well. A restaurant and bar will complete the picture of a leisure-time destination. Developer Carlos Riva Palacio Magana has had similar success in Acapulco, where he has property that fronts an entire city block in the Colonia Icacos section of Acapulco, across the street from the International Hyatt Regency. The Acapulco property, serving as collateral for the Mexico City development, was personally designed by Magana, and houses an active Jai Alai complex for seven months of the year, as well as sports book areas, a year-round 1,000 seat bingo hall, dance club, snack bar, restaurant bar with kitchen, and administrative offices. The building condition is very good and the location is prime, on the central beach front highway in the center of the business and hotel district.

"The Acapulco business is thriving," remarked Carlos Buchanan II, CEO of Buchanan Ventures in Houston, Texas, financial advisors to the project. "But when Carlos Magana sought to expand and take full advantage of his existing permits, the money was impossible to find. We talked to everybody in Mexico without success. Traditional sources simply would not commit to this project, despite a history of proven value. Highly regulated gaming establishments are difficult to fund in the U.S. as well, but after an exhaustive search, Kennedy Funding was the answer. They did a standard commercial deal and they did it very quickly. Kennedy got it done."

Henry Haskell, founding partner in Kennedy Funding, expresses confidence in the plan. "We found the collateral property in Acapulco to be well- maintained, operational, and valuable," he remarked, "and we saw no reason why that successful profile couldn't be recreated in Mexico City. It's a satellite to the original establishment, and will be run on the same professional and profitable principles."

Jeffrey Wolfer, president of Kennedy Funding, added that a "business with a proven track record has earned the right to grow. At Kennedy Funding, we regularly support expansion of all kinds of legitimate businesses."

Where traditional lenders balked at lending for an expansion in Mexico, Kennedy Funding continued its policy of careful evaluation based on the quality of the opportunity. Kennedy does quick, precise appraisals, often making loan commitments in as little as 24 hours, and closing quickly, often in just 2 weeks.
An increasingly wide range of borrowers, from land-use developers to resort builders, entrepreneurs, and major businessmen, have turned to Kennedy Funding to arrange for financing from $1 million to $100 million.

Lionel Richie

Caesars Atlantic City: 5-time Grammy Award winner, Oscar and Golden Globe winner, Lionel Richie is best known for being co-founder and member of the Motown group The Commodores. Richie performs solo at Caesar's Atlantic City's Circus Maximus theater.

Date: December 18, 2004

Price: $100

Time: 9:00 pm

 

For more information please call: 1-800-736-1420

 
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