|By Rod Smith, Las Vegas Review-Journal|
Knight Ridder/Tribune Business News
June 23, 2004 - The Las Vegas County Club's board of directors is preparing a response to Las Vegas developer Steve Wynn's $40 million buyout offer, although some members believe they are not being told all of the facts, sources said Tuesday.
Wynn last week offered the club's 650 equity members up to $50,000 each so he could take over the historic golf course on Joe W. Brown Drive across from the Las Vegas Hilton.
Wynn Golf, an affiliate of Wynn Resorts, mailed a letter to the country club's members last Friday offering to pay $50,000 to each of the club's full equity members and $25,000 to half equity members. In addition, Wynn offered to pay off $7 million in outstanding debt.
Dale Telford, general manager of the country club, said that at the direction of his board of directors he could not comment on the proposed sale.
However, sources close to the country club said that despite rumors a buyout offer might be afoot, there were no direct discussions with Wynn or his company. Sources said the board is preparing a response to the buyout offer.
Memberships recently have been offered for sale for about $25,000, with no takers. The most recent membership sale was for about $13,000, and the country club recently bought at least one membership back for $7,500.
Equity owners, however, said they fear all the facts are not being disclosed and that they are being pressured into bargain-basement sales.
Former owners who have sold their memberships recently said they were given no information that the country club might be for sale.
Members turned down an offer in 1997 from Hilton Hotel Corp., then owner of the Las Vegas Hilton, when it made an offer of $84,000 per membership.
Hilton wanted the golf course as an amenity for guests, but long-term residents wanted to maintain the status of the course.
Owners and real estate sources said on Tuesday that the golf course is worth at least as much today as it was seven years ago.
Despite the financial concerns of current owners, some industry experts say the move makes sense for Wynn as a resort operator and for Las Vegas, while one suggested Wynn might need the property's water rights to develop the second tower at Wynn Las Vegas.
University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said the buyout will be positive for the Las Vegas and is new project as long as Wynn maintains the country club as a golf course.
Wynn Resorts spokeswoman Denise Randazzo said that is the plan because her company needs the extra tee time from the added golf course to handle overflow crowds from the second tower planned for Wynn Las Vegas.
Wynn Resorts already is developing an 18-hole golf course, designed by Tom Fazio and Wynn, on the old Desert Inn site.
Deutsche Bank analyst Andrew Zarnett said the Las Vegas Country Club could also help Wynn Resorts appeal to a broader range of guests by offering a less expensive, but convenient golfing opportunity.
However, Hal Rothman, chairman of the history department at the University of Nevada, Las Vegas, said it is likely Wynn is more interested in the golf course for the water rights he will get if he buys it.
"Owning another golf course gives him control over its water features. Water features are important to Wynn and they have been a key for every resort he has built," he said. "That's what he did at the Dunes (which he destroyed along with its golf course to build the Bellagio). These older courses have so much in water rights attached to them, they free developers from water restrictions."
"Given the drought, you may see other golf courses becoming targets of developers."
Thompson said the Las Vegas Country Club used to be very exclusive as a place to live and to play golf.
"Now, it's ordinary," he said. "The exclusive set lives out in Summerlin now. It's almost like the inner city Methodist Church. No one is interested. But for a resort operator, it's a good idea if it helps the city bring in tourists. That's what helps our economy."
-----To see more of the Las Vegas Review-Journal, or to subscribe to the newspaper, go to http://www.lvrj.com.
(c) 2004, Las Vegas Review-Journal. Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail firstname.lastname@example.org. WYNN, HLT,