By Ben Blaschke
The Las Vegas Strip site formerly pegged for Crown Resorts’ ambitious US$2.5 billion Alon Las Vegas project has been snapped up by Wynn Resorts.
In a Thursday announcement, Crown said it had entered into an agreement with a subsidiary of Wynn Resorts Ltd to sell the vacant 34.6 acre site for US$300 million – around US$100 million less than had been previously forecast. The transaction is expected to be completed by late January 2018 with Crown’s share of the gross proceeds to come in at around US$264 million.
“In June 2017, Crown wrote down the carrying value of its investment in Alon to US$200 million (or US$176 million net of minority interests),” Crown said.
Crown resorts announced in May its intention to sell the parcel of land, having previously revealed in December 2016 that it was backing out of the Alon project. Ironically, Alon co-Chairman and CEO Andrew Pascal was formerly President of Wynn Las Vegas.
In its own statement, Wynn Resorts hailed the acquisition of the land – located directly across the Las Vegas Strip from Wynn Las Vegas – as a unique opportunity.
“The agreement completes a unique assembly of contiguous real estate of approximately 280 acres that spans from the Las Vegas Convention Center on Paradise Road from the east, to Industrial Road on the west,” it said.
“The combined frontage on the Las Vegas Strip is over 3,500 feet, including rights to approximately 1,000 acre feet of water. It is adjacent to nearly six million square feet of convention and exhibition space. The average cost of the full assembly of 280 acres is less than US$3 million per acre.
“The future development of the land will further change tourist visitation patterns in Las Vegas drawing more visitors to the north end of Las Vegas Blvd and its collection of luxury resorts, including the existing Wynn Las Vegas and the Paradise Park development slated to begin construction in January 2018 on the site of the former Wynn Golf Course.”
The sale of its Las Vegas land was one of a number of major transactions announced by Crown Resorts on Thursday, including the acquisition by way of distribution to a subsidiary of 4.2 million Caesars Entertainment Corporation shares previously held by a co-investment vehicle. Crown said it intends to sell the shares for around US$54 million.
Crown also confirmed that discussions are ongoing in regards to the sale of its 62% stake in Australian online sportsbook CrownBet for AU$150 million, while it will receive another AU$62.5 million after agreeing to sell its interest in the property and operations at luxury estate Ellerston in the Hunter Valley – two hours north of Sydney – to Gretel Packer, sister of Crown Resorts Director James Packer.
Packer himself is also getting in on the act, having reached an in-principle agreement with Crown to purchase two floors of the Crown Sydney Residences at the Crown Sydney Hotel Resort – part of the Barangaroo project – for AU$60 million. Packer revealed in a recent interview that he intended to move back to Sydney in the near future.