New Aladdin Owners Plan $90M in Improvements

LAS VEGAS-A new group is taking ownership of the Aladdin hotel-casino on the Las Vegas Strip. In a deal approved by the state Gaming Commission, a group led by Douglas P. Teitelbaum, Robert I. Earl and Theodore W. Darnall is buying the 2,567-room hotel-casino out of bankruptcy for $637 million with plans to invest an additional $90 million.Earl, one of the founders of Planet Hollywood, has said the hotel will bear the Planet Hollywood name once the improvements are complete. Teitelbaum is managing principal of Bay Harbour Management LLC of New York, a company that is in the business of turning around distressed operations. Darnell is an officer with Starwood Hotels & Resorts, which will run the hotel under the Sheraton flag. He has sold some $28 million worth of Starwood stock since the beginning of the year, including a $13-million sale (299,000 shares) in June.Planned site improvements call for 1,000 two-bedroom timeshare units on 4.6 acres fronting Harmon Avenue. Improvements to the existing built space include a new facade, new slot machines and a new layout for the casino floor that will include more restaurants. In addition, the casino’s 7,000-seat showroom will be redesigned to accommodate 3,200 customers for more frequent shows and a 1,300-seat showroom will be built in unused space.The new owners told the commission last week that the Aladdin should generate $43.1 million in cash flow on new revenue of about $276 million. The numbers are lower than the current year, in part because of the planned construction work for the upgrades. In year five, the owners are projecting the property will generate $121.4 million in cash flow on net revenue of $434 million.Also, a group of developers that earlier this year paid $90 million for 8.5 acres bordering the Bellagio has begun detailing their plans for a $1-billion development that will include four million sf of hospitality, residential, retail and entertainment components. Operating under the name 3700 Associates, the developers are David Friedman, a former executive at the Venetian; SFM Capital Management, an affiliate of New York-based Soros Fund Management; and Miami and New York City developer Ian Bruce Eichner. Project spokesperson Kurt Ouchida tells GlobeSt.com the group’s plans call for 2,400 units of housing, including hotel rooms, condominiums and timeshare units in two 53-story towers. Plans also include 300,000 sf of retail, 150,000 sf of meeting and convention space, 70,000 sf of casino space, an 1,800-seat theater, multiple nightclubs and a 3,000-slip underground parking garage. The project is slated to open in late 2007 or early 2008.