News for the Hospitality Executive
|By Rod Smith, Las Vegas Review-Journal
Knight Ridder/Tribune Business News
Mar. 26, 2004 - Marking the end of an era, ownership of Las Vegas legend Jackie Gaughan's four principle downtown landmarks passed to the Barrick Gaming Group at the stroke of midnight Thursday.
The Union Plaza Hotel and Casino Inc., Exber Inc. and Gaughan South yielded control and ownership of the Plaza and its seven additional acres, the Las Vegas Club, the Western Hotel and the Gold Spike.
Gaughan will continue operating the El Cortez, pending Barrick exercising an option and first right of refusal to buy that property as well.
The hotel-casinos now owned by Barrick, which have a total of 1,850 rooms, were all developed by Gaughan and the late Mel Exber. In addition to the hotel-casinos, the package purchased by Barrick includes some 35 acres of land in downtown Las Vegas, and the two downtown Ambassador East motels.
In a statement, Gaughan said: "There have been other suitors to acquire my properties. I admire Mr. Barrick's vision and willingness to take a risk. I welcome him to downtown as my neighbor."
Gaughan was referring to David Barrick, chief executive officer of Barrick Gaming Corp.
Gaughan also expressed appreciation for the "tremendous support from my employees over the years" and "for the trust placed in me by my customers and the community as a whole," which he said made his success in Las Vegas possible.
Barrick Gaming President Stephen Crystal said completing the acquisition of the Gaughan properties, which sold for $82 million, was a humbling experience that offers great opportunities.
"From our perspective, Jackie Gaughan is a legend in Las Vegas. Barrick Gaming can't fill his shoes, but we look forward to making our own impact in downtown Las Vegas," he said.
The former Gaughan properties have been key parts of downtown Las Vegas' history, as have Gaughan and Exber.
Gaughan, moved to Las Vegas from Omaha, Neb., during World War II and was stationed at the air base in Tonopah.
In the late 1940s he acquired small ownership interests in the historic Boulder Club and the Flamingo Hotel and Casino.
Gaughan and Exber, who were horse-bookmaker competitors, joined forces in 1961 to acquire the then-closed Las Vegas Club, one of the first racially integrated hotel-casinos in town.
The two again joined forces to buy and expand the El Cortez in 1963. The Western Hotel opened as a bingo parlor in 1970, at the time it was the world's largest bingo parlor with 1,020 seats. Slots were added later.
The Gold Spike, originally the Rendevous, was bought by Gaughan in 1971 after its three previous owners failed.
The Plaza, billed as the world's largest hotel-casino when it opened in 1971, became a cult destination with its martini pool and "Fiddler on the Roof" dinner show.
Developed in partnership with the Union Pacific Railroad, Gaughan's original shareholders in the hotel included Frank Scott, Sam Boyd, J.K. Houssels and then-Sen. Howard Cannon.
Bill Boyd, then the company's legal counsel and now chairman of Boyd Gaming Corp., rented space on the first floor for his law office.
At the time, Gaughan held the most gaming licenses of any gaming licensee in Nevada.
Gaughan later acquired a host of nongaming properties which were included Barrick sale.
Barrick Gaming plans a massive redevelopment of the four hotel-casinos it bought and the land around them, for which the gaming operation will function as anchor tenant.
Although the Barrick Group has declined to discuss financial plans in detail, Crystal says the redevelopment will be internationally financed by backers mainly experienced with traditional real estate developments.
The Barrick group also plans to create a themed street behind the Plaza, which will re-create the ambience of old downtown Las Vegas.
It has taken the company 2 1/2 years to develop the plans, which will represent more than 45 percent of the downtown hotel inventory and protect 4,000 downtown jobs as well as create new positions.
The plans may be expanded to include the recently approved downtown entertainment district, the El Cortez, on which they have an option, and the Queen of Hearts motel on Main Street and the Nevada Club Hotel, which they plan to buy.
The plans include adding 1,200 hotel rooms and 1,200 time share units to the Plaza, linking the Plaza and the Las Vegas Club with a deck over Main Street and adding a portable arena.
They also call for redeveloping the Western Hotel as a Latino destination resort.
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(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News. BYD,