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Hard Rock Residences Cancelled?

Hard Rock casino considers sale

Owners of the Hard Rock Hotel & Casino in Las Vegas have suspended plans to build a $1 billion condominium project while they consider offers from various buyers bidding to purchase the Hard Rock resort just off the Strip. Analysts estimate the property is worth from $650 million to $800 million, including property and trademark values.

Hard Rock Hotel Inc. executives kept the number of buyers and their identities secret on Friday, but they did inform us that the fate of the Residences 1,200 unit expansion was uncertain.

"At this point in time, while we're weighing the offers, the condominium project may be part of the deal, but you don't know what direction it would take," said Brian Ogaz, senior vice president of Hard Rock Hotel, a privately held company led by Peter Morton. "It may proceed, it may be canceled, it may continue, but it's not something we'd be able to have a direct bearing on," he said.

The expansion was a 24-acre site next to the casino with five different towers planned not including the individual bungalows that were going to be right up against the pools. Price ranges for the “suspended” condominiums started at $400,000 and went up to $2.9 million.

Ogaz said letters were sent Wednesday, alerting buyers who already had deposited the down payment of 10 percent of their unit's purchase price, offering refunds.

The Hard Rock's is the largest and latest in a handful of Las Vegas condominium projects to cancel and offer refunds to buyers. When New York-based Related Cos. scrapped its project, Icon towers, the company offered refunds, plus interest to its buyers, some of whom responded with lawsuits seeking compensation for their units' appreciation between the time they signed the deal and the time the project died. Many claimed a lost faith in Related and in the Las Vegas market.

"You can't hold someone's money while the decision is in the process of being formulated as to the future of the Hard Rock. So we sent out letters and gave people the option. If they want to stay in the project, that's cool. If they want their money back plus interest, that's cool, too," Morton told the Las Vegas Review-Journal.

Hard Rock did not have the same problems, skyrocketing construction costs, which many of the other projects bottomed out due to. In October, Morton said the company had secured $1.25 billion in financing for the project. Construction was expected to begin this year and be completed by 2008. "(The cost of construction) wasn't a factor," Ogaz said. "That would have been sufficient to fund our project."

Despite the reasons, The Residences at Hard Rock Hotel and Casino may soon be joining the red list of cancelled and failed projects.

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