Las Vegas Sun NewsLenders taking over Westin Casuarina Las Vegas hotel-casino
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19 October 2011
4:10 p.m.
Lenders are taking ownership of the Westin Casuarina Las Vegas Hotel, Casino & Spa after its owner chose not to fight foreclosure proceedings, its general manager said Wednesday.
The Flamingo Road property, which is east of the Las Vegas Strip on Koval Lane, was hit with foreclosure papers in November 2010 after owner Columbia Sussex Corp., of Crestview Hills, Ky., defaulted on the property’s $160 million mortgage dating to the economic boom in 2005.
On Tuesday, the special servicer appointed by the lenders, CWCapital Asset Management LLC, filed suit in Clark County District Court against the Columbia Sussex subsidiary that owns the property and asked the court to appoint a receiver to run it at least until the foreclosure is completed and it’s sold.
Sig Ortloff, general manager of the Westin Casuarina, said the parent company isn’t fighting the foreclosure and the change in management will be good for the 826-room hotel and its 400 employees.
The property has been in limbo for some time and in need of capital improvements, which may happen with new ownership, he said.
With the hotel being overleveraged after the recession slashed property values in Las Vegas, Columbia Sussex likely decided it didn’t make sense to continue paying the mortgage, Ortloff said.
The mortgage payments were $904,000 per month, court records show.
"We’re looking forward to the new management," Ortloff said, adding a key asset for the property — its Westin brand — will continue there.
The casino portion of the property has been leased to a third party that is not involved in the foreclosure, he said.
Lenders filing Tuesday’s suit along with CWCapital were U.S. Bank as trustee for the registered holders of Wachovia Bank Commercial Mortgage Trust securities. After the mortgage loan was issued in 2005, it was divided into certificates and sold on Wall Street as securities by Wachovia Bank, which was later acquired by Wells Fargo Bank.
The suit said Columbia Sussex’s subsidiary defaulted on the mortgage by failing to make a payment in April 2010 and that a receiver was needed because "the property faces a threat of mismanagement and impairment because defendant is in financial peril."
"Defendant has no equity in the property and consequently little motivation to manage it properly," the lawsuit said.
The proposed receiver is Pyramid Hotel Group of Boston, which already manages about 70 properties around North America, including Loews Lake Las Vegas and the Westin Casuarina Resort & Spa in Grand Cayman, Cayman Islands.
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Another Casino bites the dust. As I have said before we have too many Casino/Hotel. Next to go will be Cosmopolitan,Hilton and Strastosphere. No big loss!
This place was a dump when it was the Maxim and it's not any better with the westin "brand".....
Sorry, Dave, but you're full of it. You don't have a clue as to what you're talking about. My wife worked at the Maxim for 11 years and it was no dump. It did have some faults, among them bad management and bad luck and that combo drove it out of business. The biggest blow came when Joe Burt was killed in a motorcycle accident. However, it was a "cozy" and friendly place compared to the giant resorts a few blocks away and that was a plus, not a negative. It was patronized by a slew of locals and locals don't patronize places just for the heck of it, as you know, because they are generally more savvy than casual visitors to LV and have lots of choices. The Maxim was a favorite for many of them. The restaurant offered good food at great prices and the machines were set to make lots of payouts. BTW, ever run a business, Dave? Ever put your own money at risk, Dave? Doesn't appear so to me.
Wow, another one bites the dust. This is a nice property and even the maxim was fun on a Saturday night 15+ years ago... Hooters, Hilton, mob x.... Nothing new.... Just another very hard cycle for private business.... This is a very troubling revelation. lVfacts...thank you for knowing the history... The maxin was a great time in the day...so was pulling up the 77 dodge in front of the nugget and playing craps at binions. Can't even go to a nightclub without dropping a grand or 4 to get a seat. This was the coolest place on earth, now according to many news outlets it is one of the worst to live in. Remember steak and lobster nights at the showboat! Crying in my adult beverage right now.