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FX Real Estate and Entertainment that Once Envisioned Building an Elvis-themed
 Resort on 18 acres Across from CityCenter Defaults on a $475 million Loan,
May be on Verge of Losing the Land
By Arnold M. Knightly, Las Vegas Review-JournalMcClatchy-Tribune Regional News

Dec. 31, 2009 - An investment group that had once envisioned building an Elvis-themed resort on 18 acres across from CityCenter may be on the verge of losing the land.

FX Real Estate and Entertainment said Monday it has defaulted on a $475 million loan from Credit Suisse and does not expect to be able to repay or refinance it by the time it matures on Tuesday, a filing with the Securities and Exchange Commission shows.

"Unless the loan is repaid, refinanced or extended at maturity, the lenders may at any time exercise their remedies under the Amended and Restated Credit Agreements, which include foreclosing on the Las Vegas properties," the filing read.

A $14.9 million payment made July 6 already extended the maturity date six months.

The company received a waiver on Nov. 25 when falling land values pushed the property into noncompliance of its debt-to-loan value ratio covenants, but the company failed to make the $26 million compliance payment by Dec. 19.

The land, which stretches from the Harley-Davidson Cafe on the corner of Harmon Avenue to the Smith & Wollensky building just north of the MGM Grand, is currently generating revenues for FX mainly through rental income. The Hawaiian Marketplace, Travelodge and several shops also occupy the land.

The land was acquired through six separate transactions totaling $221.3 million, or $12.5 million per acre, between March 1998 and May 2005.

FX, however, wrote off $10.7 million in development costs in the third quarter after abandoning plans for the Elvis-themed resort in September due to the "dislocation and turbulence in the capital markets."

The group posted $482,000 in revenues in the third quarter ended Sept. 30 against operating costs of $16.8 million driving it to a $33.7 million loss.

FX has posted a $112.7 million loss the first nine months of the year.

The possible loss of the land comes after an agreement for FX to acquire an 85 percent interest in Elvis Presley Enterprises fell through.

In a Nov. 5 filing with the Securities and Exchange Commission, FX said the acquisition agreement was canceled when a go-private deal for CKX Inc., which licenses the rights to the singer, collapsed.

FX is a partnership between Robert F.X. Sillerman, whose publicly traded company CKX Inc. owns the name and image of Elvis Presley and the operation of Graceland, hotel developer Paul Kanavos and residential and commercial developer Brett Torino.

Attempts to reach FX representatives in New York on Tuesday failed.

FX, which is publicly traded on the Nasdaq National Market, has had its stock price fall from an offering-day high of $10.02 per share Jan. 10 to 13 cents per share at Tuesday's close.


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