State regulators recommend partnership to control Palms hotel-casino

George Maloof would continue to manage the property

The Palms Casino Resort and Palms Place.

Click to enlarge photo

George Maloof

VegasInc Coverage

The state Gaming Control Board today recommended the licensing of a private equity partnership as the controlling interest of the Palms hotel-casino.

Representatives of FP Holdings LP, a partnership between TPG Capital, formerly known as Texas Pacific Group, and Los Angeles-based Leonard Green & Partners LP, said the face of the property, George Maloof, would continue to manage the 10-year-old property and the adjacent Palms Place condominium development

The new owners will continue to staff the property with existing employees and is investing $30 million for various improvements.

The licensing recommendation, unanimously approved by the three-member board, will be considered Nov. 17 by the Nevada Gaming Commission.

Fort Worth, Texas-based TPG is familiar to gaming regulators as one of the partners that in 2007 acquired Harrah’s Entertainment, now Caesars Entertainment, and is invested in Station Casino’s Aliante property.

Leonard Green, which manages $9 billion in equity capital mostly in public pension funds, also sailed through the board’s licensing process with a clean record.

Mike Connelly, a Leonard Green partner, told the board the company has acquired $60 million in new financing from Wells Fargo Bank to retire debt on Palms Place, which opened just after the recession took hold in 2008, and to refurbish rooms, restaurants and the casino.

Maloof, who has a 1.98 percent stake in the company and whose family collectively has 8.75 percent, spoke briefly to regulators, mostly thanking the resort’s employees, 600 of which are still with the company since the property opened Nov. 15, 2001.

The owners also hired Joseph Magliarditi, who formerly headed the rival Hard Rock Hotel, as president of the property.

“I can’t say enough about the Palms brand, particularly as a former competitor,” Magliarditi told the board. “We’re looking to reinvigorate that brand through intelligent marketing and capital investment and expanding our outreach in outside markets.”

Magliarditi said the new capital would be used to freshen the property’s nightlife offerings and upgrade more than 200 of the casino’s slot machines. He noted that the Ghostbar Day Club, which opened last month, is enjoying success in its bid to bring summer pool parties indoors.

In other business, the board conditionally recommended allowing Ronald Johnson to operate the Las Vegas Hilton as a court-appointed receiver. A Clark County District Court judge has not issued a ruling on whether Johnson would be appointed receiver of the property, but Colony Resorts made the request in anticipation of the move.

The board also recommended licensing for three executives of Las Vegas-based Shuffle Master as officer, directors and key employees of the company. Recommended for licensing were , CEO Michael Isaacs, chief financial officer Linster Fox and chairman Garry Saunders.

The board also recommended approval of a one-day license for owners of the site that formerly housed the Castaways. Local ordinances require gaming to be conducted at least once every two years on land zoned for casinos so a small temporary casino will be operated at the Boulder Highway location on Dec. 15.