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LVCVA Agrees To Purchase Riviera To Make Way For Convention Center Expansion

Interview with Rick Velotta with the Las Vegas Review-Journal about the potential sale.

UPDATED: 10:40 A.M. 

The Las Vegas Convention and Visitors Authority agreed Friday morning to purchase the Riviera Hotel-Casino for $182.5 million.

The approval of the deal by the 14-member board clears the way for the Riviera, which is celebrating its sixtieth anniversary, to eventually be demolished to make way for the $3.2 billion Las Vegas Global Business District.

The Global Business District is a major expansion of the Las Vegas Convention Center that will include new convention facilities and a trade center.

The Riviera sits on 26.3 acres on the north end of the Strip, an area that is still recovering from the recession and has faced a lack of visitors due to its older properties. The Riviera sits across Las Vegas Boulevard from Circus Circus and is adjacent to the shuttered Fontainebleau project.

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The resort with 2,100 rooms and an 110,000-square-foot casino is owned by Riviera Holdings, a subsidiary of Starwood Capital Group. If the deal to acquire the Riviera is approved Friday, the transaction would close that day.

The agreement includes $8.5 million for acquisition costs, including $3.5 million in fees to be paid to Morgan Stanley, which represented the LVCVA in the deal. “Sufficient funding for this transaction is available through the LVCVA’s credit facility with JPMorgan,” according to LVCVA’s 197-page real estate acquisition document.

The agreement also includes a lease-back provision that will allow the casino’s manager Paragon Gaming to continue to operate the resort and prepare it for its eventual closure.

Las Vegas-based Paragon Gaming is headed by Dianna Bennett. Bennett, who owns 50 percent of Paragon, is the daughter of the late Las Vegas gaming legend William Bennett.   

The company began managing the Riviera in 2013 after a management shakeup, but didn’t receive final approval from gaming regulators until September.

Paragon’s contract with the Riviera expires in June.

The Riviera, which opened in 1955, has been in bankruptcy three times in 1985 and 1991. The most recent bankruptcy came in July 2010, when Riviera Holdings filed for Chapter 11. After four months, the casino-resort emerged from bankruptcy as part of Starwood Capital Group. Based in Greenwich, Conn., the private investment firm holds 41 percent of Riviera Holdings.

GUEST:

Rick Velotta, gaming reporter, Las Vegas Review-Journal

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Rick Velotta, gaming reporter, Las Vegas Review-Journal

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