Planet Hollywood Resort Nears Grand Opening

LAS VEGAS-Planet Hollywood Resort & Casino will celebrate its grand opening next month having completely made over and rebranded the exterior and interior public areas of the former Aladdin Resort & Casino and renovated about half of its 2,600 rooms with movie themes. Coming several months after the soft opening and two months later than planned, the star-studded celebration will also help market the adjacent, 475,000-sf Miracle Mile Shops retail destination, formerly Desert passage Shops, and Planet Hollywood Towers by Westgate, which will house 1,200 timeshare units in two 50-story towers.

The development group behind the Planet Hollywood Resort & Casino includes Douglas P. Teitelbaum, Robert I. Earl and Theodore W. Darnall. Earl is one of the founders of Planet Hollywood. Teitelbaum is a 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. The group announced in September 2004 that it was acquiring the Aladdin property out of bankruptcy for $635 million with plans to transform it into Planet Hollywood Resort & Casino.

The acquisition included a four-acre site at the corner of Harmon Street and East Audrie Avenue upon which Orlando-based Westgate Resorts is developing the timeshare towers. Construction on the first tower is nearing the 20th floor and will keep moving forward thanks to a $400-million construction loan that Westgate closed on late last month. The lender is Textron Financial Corp., a subsidiary of publicly traded Textron Inc. Project completion is slated for late 2009.

Timeshare towers rendering

The acquisition did not include the Shops at Desert Passage, which Tri-Star Capital and RFR Holding, collectively known as Boulevard Invest LLC, acquired from Trizec Properties for upwards of $200 million in 2004, shortly before the owners of the Aladdin declared bankruptcy and relinquished its assets to Planet Hollywood.

When it changed hands, Shops at Desert Passage was languishing with 95,000 sf of vacant space, poor space configurations and several disgruntled tenants. Sales were averaging $400-plus per sf, which is solid performance for most markets but a problem in Vegas, where rents are much higher and sales at the competition–Forum Shops at Caesars or the Grand Canal Shoppes at the Venetian–post average sales of closer to $1,000 per sf.