|By Rod Smith, Las Vegas Review-Journal|
Knight Ridder/Tribune Business News
July 13, 2004 - Las Vegas Sands on Monday released new details about its planned $1.6 billion Palazzo casino resort on the Strip at Sands Avenue and started marketing a $975 million credit package to provide financing for the project.
The new megaresort adjacent to The Venetian, which the company already owns and operates, is scheduled to open in the first quarter of 2007 and will feature more than 3,000 hotel suites, a 105,000-square foot-casino and a 375,000-square-foot mall.
"(The Palazzo) represents a shift to a different area of the Strip where you have a number of redevelopment possibilities," said Joe Greff, gaming analyst at Fulcrum Global Partners, an independent Wall Street investment research firm, referring to the Stardust, the Riviera, the Sahara, New Frontier and Wet 'n Wild.
The Palazzo will also be directly across Sands Avenue from Wynn Las Vegas, which is scheduled to open April 28.
Greff said the Palazzo and the other projects at the north end of the Strip will all capitalize on the booming convention business that is driving the Las Vegas economy and developments in the gaming industry.
The proceeds of the credit package, which will include a revolving line of credit and term loan facilities, will be used to fund design, development, construction and pre-opening costs for The Venetian's Palazzo casino resort; to refinance Venetian's existing debt; and to pay related fees and expenses.
The Palazzo casino resort will be owned by a Venetian subsidiary for purposes of its debt instruments, which should close in August.
The Palazzo mall is expected to be owned and financed by a subsidiary of The Venetian, and General Growth Properties has agreed to purchase the mall when it opens.
In addition to the new credit package, the company plans to finance the $1.6 billion project with $135 million in equipment financing, a $250 million construction loan for the Palazzo mall, the net proceeds from the recently completed $766 million sale of the 5-year-old Grand Canal Shoppes and operating cash flow.
In connection with the financing, Las Vegas Sands plans to acquire all of the capital stock of Interface Group Holding from Sheldon Adelson, the principal stockholder of Las Vegas Sands.
Interface Group Holding indirectly owns the Sands Expo and Convention Center and holds all of the preferred interest in The Venetian.
The company is also currently exploring alternatives for refinancing or repaying the indebtedness of the Sands Expo and Convention Center.
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