Financing Set for $760 Million Vegas Hard Rock Expansion
- Jun 06, 2008
The $760 million expansion at the Hard Rock Hotel & Casino in Las Vegas is under way as Morgans Hotel Group announced today it closed on the financing needed for the major facelift with its equity and joint venture partner, DLJ Merchant Banking Partners. The financing calls for a construction loan of up to $620 million under the Hard Rock’s existing loan facility. Hard Rock has already drawn $96 million and will draw additional amounts as needed, according to a Morgans press release. Under an amended joint venture agreement, DLJ agreed to make additional capital contributions of up to $144 million for the expansion project. DLJ also committed to making up to $110 million available for payments on the approximately 15 acres of excess land held for sale by Hard Rock. As reported March 12, 2007, by CPN, the new Hard Rock will have an additional 875 guestrooms, including an all-suite, 15-story tower with upgraded amenities, approximately 60,000 square feet of meeting and convention space and about 35,000 square feet of casino space. The project also includes an expansion of the pool, new food and beverage offerings, a new and larger “The Joint” concert hall, new spa and exercise facility and about 30,000 square feet of new retail space. Among the improvements already made are upgrades to existing suites, a new Ago restaurant and Wasted Space Lounge Bar. Also expected to be completed this year are an expansion of the Nobu restaurant and a new poker room. The remaining construction is expected to be done by 2009. “We are quickly moving forward to transform this legendary Las Vegas property,” Fred Kleisner, Morgans president & CEO, said in the release today. “Construction is under way and we have taken steps to ensure that the project is completed on time and on budget.” Morgans bought the Hard Rock for $770 million in February 2007 from Peter Morton, who opened the Las Vegas complex in 1995. In an interview with CPN that month, then president and CEO W. Edward Scheetz described the property as a “significant, high quality asset” with development potential. He said the company, known for its high-end boutique hotels like Morgans, Royalton and Hudson in New York City and the Delano and The Shore Club in Miami, was hoping to attract, “a higher spending clientele” to the Hard Rock as it brought the property up to Morgans’ “best-in-class brand standard.” Earlier this year, Morgans received approval from the Nevada Gaming Commission to begin operating the Hard Rock Casino in February. It had been contracting with Golden Gaming to run the casino until it received approval from the commission, according to a Jan. 28 CPN article.