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HOME > NEWS > Investor News > Westgate CEO plans sweeping changes for newly acquired LVH

Westgate CEO plans sweeping changes for newly acquired LVH

1 July 2014

By Richard N. Velotta

LAS VEGAS -- It’ll take some time for Westgate Resorts founder and CEO David Siegel to get to know the 2,000 employees of the LVH - Las Vegas Hotel and Casino property he just bought.

But when he does, he’ll welcome them to the family with a hug.

“That’s just the way I do business, it’s like a big family,” Siegel said in an exclusive interview with the Review-Journal on Monday.

Siegel will meet some of those employees early Tuesday when he climbs onto a crane and is lifted to the 279-foot marquee at the front of the property to remove the L of LVH and replace it with a W that will be a part of the property’s new name: Westgate Las Vegas Resort & Casino.

Siegel confirmed Monday what most of the real-estate world already knew — that he was closing on a deal to acquire the 30-story, 3,261-room off-Strip property with Goldman Sachs, which took possession of the resort in 2012 in a foreclosure on a $252 million loan.

Siegel, known as the king of timeshare developers, plans to convert a small portion of the hotel to timeshare ownership — only about 200 rooms to start. He figures he’ll have plenty more to sell in the years ahead and he’s happy to have his own stand-alone property in a market he has been trying to become a part of for nearly three decades.

His 1,200-unit PH Towers Westgate at Planet Hollywood project was hurt by the Great Recession, but Siegel said what really hurt was that lenders called his loan, forcing him to sell the development.

Siegel didn’t disclose the purchase price of the LVH, which formerly was known as the Las Vegas Hilton and the International, but experts in the industry say he probably got it for between $160 million and $170 million.

TRANSACTION A POORLY KEPT SECRET

The transaction was one of Las Vegas’ worst-kept secrets.

Real estate analysts began speculating about a sale as early as May when Siegel’s representatives were seen touring the property. Entertainment and gossip columnists added fuel to the speculation with more reports of a possible sale as Siegel and his wife were building the nation’s largest mansion near Orlando.

David and Jackie Siegel were subjects in a documentary film about the project, “The Queen of Versailles,” that aired on the Bravo television network last year.

For Siegel, the acquisition of the LVH ended a series of near-misses for buying in Las Vegas.

“I first came to Las Vegas on a bus in 1955 and remember seeing Gorgeous George performing in a casino,” Siegel said. “He was a professional wrestler and I don’t even remember what he was doing, I guess telling jokes. At the time, the only lights on the Strip were from the Flamingo and five little casinos.”

He came back again in 1970, a year after Kirk Kerkorian opened the International, then the largest hotel in the world.

“I came to this hotel when it was the International,” he said. “I came with my parents and saw Elvis (Presley).”

It turned out later in life that he would have an unusual connection to the famed entertainer that made history by breaking all entertainment attendance records with 58 straight sell-outs at the International.

“Elvis’ manager, Col. Tom Parker, was my ex-wife’s godfather,” he said, “and my ex-father-in-law and Tom Parker worked for Grand Ol’ Opry. My father-in-law managed Eddie Arnold and Minnie Pearl.

“One day, Parker came to my father-in-law and said, ‘I’ve got this hick singer. Would you like to manage him?’ And my father-in-law said, ‘I’ve got Eddie Arnold and Minnie Pearl. What do I need some hick singer for?’ So, of course, Col. Tom Parker went on to manage Elvis himself. After that, I came to visit Col. Tom at the hotel because he lived here in a suite on the third floor because Elvis was so important to the hotel.”

ELVIS’ ARRIVAL LIKE ‘ROYALTY’

Siegel said he saw Elvis’ show about 15 times over the years. One time, Siegel was in the hotel lobby when Elvis arrived.

“He was wearing a white jumpsuit, a white cape and a white walking stick with jewels on the knob,” he said. “Priscilla was on his arm and she had her hair piled way high on top of her head and she was in a white gown. That’s the closest to royalty I’ve ever been.”

Over the years, Siegel came close to buying other Las Vegas properties, including the Frontier on the Strip. When he was close to completing his due diligence on the deal, investment bankers persuaded him to buy the Riviera instead so he joined a partnership to buy that instead.

Days before the Riviera deal was to close, the partner called Siegel and told him he wanted to do the deal himself. By that time, Phil Ruffin had swooped in on the Frontier and bought it. When Ruffin sold the Frontier, he made millions, investing that in the acquisition of the Treasure Island. Siegel walked away with nothing.

He came close again when Gary Primm was developing New York-New York with his MGM Grand partners. Siegel had an idea to add to the New York-New York skyline with twin towers resembling the World Trade Center and creating the first Strip timeshare development. Just as Siegel was about the close the deal with Primm, MGM bought him out of their 50-50 partnership and had no interest in the twin tower project.

He almost lost out again with the LVH acquisition.

“After doing the due diligence, I decided I wasn’t interested in it,” Siegel said. “It was too much work to do.

“I thought about it a long time. I guess you could say it was non-buyer’s remorse,” he said. “After a couple of months of thinking about it, I changed my mind. I thought, would I feel worse if someone else bought it than how good I’d feel if I bought it and I decided I’d feel better if I bought it, so we came back into the picture.”

MAJOR OVERHAUL ENVISIONED

Siegel said he plans to invest “hundreds of millions of dollars” in his new resort.

“There won’t be one inch of this property that won’t be improved on,” he said.

Among his ideas are adding high-class restaurants and bars, including the top-rated steak restaurant franchise in Utah, the Edge.

He plans a coffee shop off the casino floor. The pool area will be renovated with cabanas and he’s looking to follow the Las Vegas pack and create a dayclub.

The area that formerly housed “Star Trek: The Experience” will be renovated into a nightclub, and he vows to make Las Vegas’ largest race and sports book the best in the market with new video screens and other comforts.

Siegel already has put his mark on customer service to conventioneers staying at the hotel by offering a golf cart shuttle service to people attending shows at the next-door Las Vegas Convention Center.

Outside the building, Siegel looks to build low-rise and midrise buildings along the periphery of the 62-acre site for more rooms and timeshares.

“We have a great palette here,” Siegel said. “Anything we can dream up, we can create here because we have the space. We’re not constricted like they are on the Strip.”

Siegel is considering pursuing a gaming license, but for now will keep management of the casino in the hands of the Navegante Group, which specializes in the management of casinos in transition.

And then, of course, there will be timeshare sales.

“This place is so big that my great grandchildren will be selling it,” Siegel said. “It would take 30 years to sell it. And I plan to be here as it happens.”

 
Richard N. Velotta
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