Harrah’s shuffles its property deck

Dec 6, 2005 4:36 AM

Harrah’s, the world’s largest owner/operator of commercial casinos, is shuffling its deck of properties, both in and out of Nevada.

The gaming giant last week announced plans to sell the Flamingo Laughlin, which it obtained in its merger with Caesars, and revealed plans to build casinos in Europe and other international venues.

Most significant, however, is what Harrah’s did not officially announce, that is, the possibility of leveling all of its Strip resorts from Harrah’s Las Vegas to Flamingo Road and build a multi-billion dollar project that could dwarf MGM’s Project CityCenter.

First, Harrah’s is selling the Flamingo Laughlin and the 7.7-acre site of the former Traymore hotel in Atlantic City to American Real Estate Partners, the Carl Icahn company that owns and operates the Stratosphere and Arizona Charlie’s properties in Las Vegas.

The $170 million cash deal is expected to be approved and finalized by the middle of next year.

Harrah’s officials said the company would continue to own and operate its Harrah’s Laughlin hotel-casino in the Colorado River resort town about 90 miles southwest of Las Vegas.

On the European front, Harrah’s plans to develop a Caesars branded casino resort in Spain, about 118 miles south of Madrid, as well as a luxury casino resort in Nova Gorica, Slovenia, which borders Italy.

Last month Harrah’s said it would enter the Bahamas market with a 1,000-acre destination beachfront resort, which it would develop in concert with Baha Mar Resorts and Starwood Hotels.

The three developments would require Harrah’s and its partners to invest nearly $3 billion.

"These projects are all in important markets where there isn’t a high-quality gaming experience," Harrah’s Chairman Gary Loveman said.

Loveman did not reveal a specific timetable, but said the three developments, which would contain hotels, golf courses, spas, shopping and entertainment venues, and casinos, could all break ground some time next year.

"After the merger, we set aside the organizational resources to create a unit of people dedicated to building new Caesars projects," Loveman said.

In Las Vegas, Harrah’s is considering a massive redevelopment of its high-profile Strip casinos that could end up being the biggest project in the city’s history, according to Harrah’s sources who asked for anonymity.

At this point, there is no concrete plan, but what’s being considered is leveling everything between Harrah’s Las Vegas and Flamingo Road.

The properties that would succumb to the wrecking ball would include Harrah’s Las Vegas, the Imperial Palace, O’Shea’s Casino, Bourbon Street hotel and the Barbary Coast.

Of course, the Barbary Coast would have to be purchased from its current owner, Boyd Gaming.

Also being considered is starting over with Bally’s Las Vegas, located just across Flaming Road from the Barbary Coast.

Razing all of those buildings would give Harrah’s more than 150 acres of Strip acreage, more than two-and-a-half times the size of the parcel on which MGM Mirage plans to build its $5 billion Project CityCenter, between the Monte Carlo and Bellagio hotels.

Company officials said that if an actual plan to redevelop the Strip property is formulated, it would likely be announced in the first half of 2006.

Also waiting announcement will be Harrah’s plans in Louisiana and along the Mississippi Gulf Coast.

Harrah’s is currently making repairs to its Harrah’s New Orleans, which was damaged by Hurricane Katrina. No date has been set for its re-opening.

Harrah’s is still assessing damage to two riverboat casinos it owns in Lake Charles and no timetable has been set for their re-opening.

Along the Gulf Coast, Harrah’s has said it would rebuild its casino in Biloxi (on land rather than on the water), but have not made a commitment to rebuild its Gulfport casino.