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Crown Pulls Out Of Alon

posted by Chuckmonster on Wednesday, 14th December 2016 5:49pm

Crown Resorts, as part of a major restructuring, announced that they have decided not to move forward with the Alon project.

The Board has resolved not to proceed with the Alon project in Las Vegas at this time and is assessing options to optimise the value of from Crown’s investment in the project.

The terms "optimise the value" could mean sale of their portions of alon's holdings - intellectual property, plans, designs, assets, the parcels gained in bankruptcy auction etc - to another investment group.

Following an extensive review of funding alternatives for the Alon project over the last two years, Crown Resorts has determined that it will not proceed with the project at this time. As a result, Crown Resorts and its partners will begin exploring alternatives to optimise the value of their investment in Alon, including an outright sale.

While I am terribly sad to hear about this news, I'm more sad for all the incredibly talented folks - truly the best and the brightest in the business - who poured their hearts and creativity into planning what was sure to be a unique, intimate luxury experience on the Las Vegas Strip.

Comments & Discussion:

Posted by fudgewapner on Wednesday, 14th December 2016 8:36pm:

Thoughts on how this might impact Resorts World? And does Wynn now scale back on the golf course/pond ambitions? Less need to dive into that project? With Wynn putting Amazon Echos in every room, perhaps they're all set (that's a joke - now we can talk to the curtains!)

Posted by Diablo on Thursday, 15th December 2016 5:10am:

Gee, didnt see that one coming
/s

VT is banning people for disagreeing with them so i'll just leave this gem from just a few months ago... "Confirmed: Alon Isn't Dead"

LOL!

Posted by Drake on Thursday, 15th December 2016 5:48am:

Crown is reading the tea leaves and doesn't want to be this decade's City Center.

Posted by anawas on Thursday, 15th December 2016 7:36am:

Does this mean Alon is completely dead, or just that someone else will build and run it?

I mean, Mariah Carey has to do *something* with all that money she's trying to get from James Packer.

Posted by jimmybond on Thursday, 15th December 2016 8:27am:

maybe wynn can use the proceeds from their sale of half the shops and buy that parcel, own that end of the strip. does it have space for an 18 hole golf course? could be a replacement for the one being turned into the Blue Lagoon

Posted by jucifers on Thursday, 15th December 2016 9:15am:

Alon's management team is too high caliber to be permanently sidelined. Their plans for Alon looked fantastic; the timing was just unfortunate.

Will Wynn surprise everyone by extending an olive branch or will Jim Murren attract this talented team to MGM?

With new casino opportunities opening up in Japan and Brazil, could Alon's ideas wind up in casinos overseas before we see them introduced in America?

Posted by MinVegas on Thursday, 15th December 2016 12:07pm:

While everyone will naturally assume that Wynn Resorts builds something here, I wouldn't be surprised if Alon's management, realizing that they're sharing a land border with a Trump tower, brings in Eric & Donald Jr to partner on the second draft.

Given that our new kleptocracy seems fit to turn The Trump Organization into a de-facto state-backed corporation, Pascal & Company can probably score some favorable deals regarding taxes and immigration visas from the man in the big office if they make a yoooge deal with Tweedle-Dee&Dum to bring TrumpWorld to the Strip.

Posted by hobgoblin7777 on Thursday, 15th December 2016 12:15pm:

Don't know what happens to the Alon team. I agree with Chuck. They are a talented group. I wish them the best. Personally, I would like to see the property acquired by Resorts World for a future expansion/resort (I'm still hoping Resorts World gets built. I really liked the renderings). Also, wouldn't mind seeing Steve-O buy it and put something for the middle class there. Just don't let it turn into an MGM purchase - don't think it will as their Las Vegas holdings seem large enough. Also don't want Caesars buying it either. Wonder if there are any chances of Sheldon and team buying? Hope not. My first choice is Resorts World, second choice independent entrepreneur/new comer to the strip, third choice Steve Wynn, fourth choice it just sits until one of the aforementioned picks it up. Wonder if Richard Branson has any interest?

Posted by chrisrobbins1980 on Thursday, 15th December 2016 12:20pm:

Any chance this parcel could be used for the proposed NFL stadium?

Posted by RobbieNomi on Thursday, 15th December 2016 2:58pm:

Goodbye Alon... Hello Walgreens.

Ugh.

Posted by hail2skins on Thursday, 15th December 2016 4:46pm:

Sorry Chuck......I know you were looking forward to and had high hopes for this project.

All the statistical measures seems to suggest Vegas is humming right now, so why is it that these companies seem to be having difficulty funding Vegas projects? I really think RW is going to meet the same fate.

Posted by HankTheDwarf on Thursday, 15th December 2016 4:53pm:

Bad news, but it would be nice if someone would target the upper mid tier vs yet another luxury glass tower among a sea of them. I'm sure the economics work out better with the latter, but it makes for a boring ass city.

Posted by HankTheDwarf on Thursday, 15th December 2016 4:55pm:

^ I'm referring to new projects BTW. Not talking about outpaced 5 star joints that slip into 4 star territory.

Posted by Toro66 on Thursday, 15th December 2016 7:04pm:

Not surprised. While I was sitting in the car taking us to Encore I was next to the sign that said Elon 2018 - and I said yeah, right. Sad - sounded great!

Hey Steve - Wynn Trois

Posted by jucifers on Friday, 16th December 2016 7:30am:

Chuckmonster, what percentage of Alon's innovations could be retrofitted onto existing casinos? And which Las Vegas hotels would benefit the most from retrofitting their casinos to emulate the Alon approach?

Could MGM generate large profits by buying out Crown, using the intellectual property on existing hotels and waiting a few years to build Alon? Aria failed to dethrone Wynn as Las Vegas' premier hotel. Could Alon succeed where Aria failed?

Posted by Gringo on Friday, 16th December 2016 9:49am:

I was expecting a bigger VT write-up on this story.

Posted by vespajet on Friday, 16th December 2016 12:25pm:

Packer hasn't had the best of luck with his investments in Vegas over the last decade. You also have to wonder if that land is cursed. Phil Ruffin had proposed several redevelopment plans for the site before selling the bulk of the land to El Ad for the failed Plaza resort. Even Trump International has underperformed, as they had a lot of condos that sales fell through and eventually, they sold a chunk of rooms to Hilton Grand Vacations. The second tower is unlikely to happen either. Now Alon looks to be joining the list of failed proposals for the site.

On the surface, Wynn Resorts coming into the picture could be a possibility. They had their eye on the site as well. Perhaps Paradise Park could be moved across the street? Or maybe the Alon design is given the Wynn treatment for Wynn Palace.

Out of the box thought, Blackstone comes onboard and Alon becomes a sister property to Cismo.

Posted by StudiodeKadent on Saturday, 17th December 2016 8:11pm:

This is pretty sad to say the least.

It should also be pointed out that Crown is further reducing its share in Melco Crown Entertainment (they're dropping their MCE share from 27.5% down to about 14%).

Crown has been growing in Australia though - Crown Towers Perth recently opened and Crown Towers Sydney is under construction. Crown also is aiming for a casino license on the Gold Coast (south of Brisbane).

This is something I find very interesting; Crown is basically shifting away from foreign markets and expanding in its home country. I can understand this for Vegas; Vegas is a very thin-margin market. But Macau? Beijing's crackdown must be absolutely crushing the place if Crown is lessening its shareholding there. Alternatively, Crown might be aiming for Chinese tourists who visit Australia - we know from the recent jailing that Crown want to attract Chinese gamblers to Crown Perth and Crown Melbourne. I guess Crown must get higher ROI's in Australia... which surprises me to some degree given Australia's high labor costs but on the other hand Crown has less competition to deal with in Australia, and there is a substantial portion of Asian residents and tourists in the Australian market. Plus Australians generally play a lot of slot machines and put up with some terrible Blackjack odds.