LVH still has Hilton’s interestMarch 20, 2012 3:07 AM by Phil Hevener
The resort formerly known as the Las Vegas Hilton continues as the focus of nearly constant sale and foreclosure rumors. The most recent one could involve an unexpected serving of "family history" if it becomes a reality.
The speculation in this direction is being encouraged by multiple sources who confirmed that the three sons of the late LVH boss Henri Lewin were "kicking tires…talking about what they could do with the place" over the weekend during a visit to the hotel.
The three are Larry, Barry and Jerry Lewin who in recent years have been building their own track records as senior executives in various corners of the domestic and international hotel and casino business. They grew up around the Hilton as the sons of Lewin who ran the property during some of its best years when Elvis Presley was starring in hundreds of sold out concerts there.
So let’s flash forward to the present.
Barry and Jerry are corporate level senior executives with the Hilton Hotels and Hyatt organizations, respectively. Larry has extensive past experience with Hyatt in both the U.S. and Europe as well as independent consulting projects.
Their weekend visit to what is now known as the Las Vegas Hotel & Casino may or may not turn into a formal deal involving current employers of the Lewin brothers but it is easy to understand both their interest and their access to all the right people.
If a deal develops, it would involve emotional factors that have nothing to do with the simple transfer of real estate. The brothers literally grew up at the Las Vegas properties (the LVH and the Flamingo) of the parent Hilton company during the roughly decade and a half that their father supervised Hilton operations in both Las Vegas and Reno.
The Blackstone Group bought Hilton Hotels for $26 billion in 2007 but the Las Vegas Hilton had previously been sold to Los Angeles based Colony Capital, which later brought in one of the Goldman Sachs-owned Whitehall funds as a 40 percent owner. The purchase of the former LVH by any group will not necessarily be easy since it necessitates satisfying both owners who have recently found it hard to agree about anything.
In the meantime, Hilton Hotels lacks a prominent Las Vegas marquee, a big problem for a convention-oriented hotel company in a city where the most successful companies lean heavily on the convention business.
Both Colony and Whitehall seem to lack the appetite to come up with the millions necessary to make the hotel and casino competitive with newer properties that have lured away much of the convention business that was once the former Hilton’s bread and butter.
There’s never been an official explanation of the reason for the loss of rights to the Hilton name, but a variety of sources familiar with internal issues contend the reason is obvious: It requires a lot of attention, which means spending millions.
Speculation of the last year or so has centered on the possibility that the Blackstone-owned Hilton Hotels would re-acquire the Las Vegas property that was once one of the company’s crown jewels. Others who seemed to have an understanding of dynamics within Hilton Hotels believed that even Barron Hilton himself might spring for whatever it took to buy the resort he had often referred to as his "favorite."
But none of that occurred.
The hotel and casino still has obvious appeal to some hopeful dealmakers for no other reason than it is 60 acres of real estate next to the Las Vegas Convention Center.
"It’s at the wrong end of the wrong street at a point in time when it is difficult to imagine spending the kind of money necessary to make it competitive again," a top executive with another company told me.
But he did not have the personal attachments to the former Hilton that might make a difference to the Lewin brothers who could not be reached for their comments.
Let’s start with Nevada’s numbers, for the month of February the NGCB has reported overall gaming revenues were down a touch over 1%. The decrease was basically driven by a decrease in Baccarat revenue of over $37 million, which given the Chinese/Lunar New Year fell squarely in February was very disappointing.