Drugstore plan motivated casino owners to purchase Las Vegas Club

Derek Stevens, shown at the Long Bar in The D Las Vegas on Fremont Street, and his brother Greg have purchased the Las Vegas Club.

Last month, Derek Stevens signed on to a strongly worded letter opposing the Las Vegas Club casino’s plan to open a drugstore that would sell packaged liquor.

Now, Stevens and his brother are the new owners of the Las Vegas Club. And the casino is not debating its neighbors about a drugstore — it’s in the process of closing.

The timing is no coincidence. Stevens, who also controls the D and Golden Gate casinos with his brother Greg, said in an interview Monday that the drugstore plan propelled their recent acquisition.

Five years ago, Stevens almost bought the Las Vegas Club from the Tamares Group, but a deal never materialized. When the casino sought city approval for its drugstore plan, however, Stevens said that “spurred us on, from a discussion perspective.”

“I tried to let (Tamares) know my perspective on it, and we kind of agreed to disagree. But the reality is, that issue, to a great degree, caused us to start talking again,” he said.

The Las Vegas Club was attractive to Stevens largely because of its location: the Golden Gate is directly across the street, and the D is just a short walk away. But he has yet to decide exactly what he will do with the new property.

Click to enlarge photo

The Las Vegas Club is shown Thursday, July 23, 2015, in downtown Las Vegas.

Before he makes that choice, Stevens said he needs a “good few months” to evaluate the building, including its structure and foundation, with an engineering team.

“Only once I get all those reports completed will I even be prepared to begin the thought process on design and on theming,” he said. “Obviously, I have an interest in creating the best use of the property, but it’s still a ways away before we’re even at that point.”

Stressing that he has not yet committed to any specific development plans, Stevens said his “best guess” is that part of the Las Vegas Club will be demolished, part of it will be renovated and it will also undergo new construction.

The casino’s operator did not reveal financial details of the transaction when announcing the sale, but Clark County records indicate that the property was sold for $40 million. Stevens said he bought only the land and the building — not the name, the gaming equipment or any of the business inside.

Accordingly, whatever Stevens eventually reopens on the northeast corner of Fremont and Main streets will need a new name.

“One thing I can tell you with certainty today is that it will not be called the Las Vegas Club,” Stevens said. “I believe that if you have a significant transformation, you need to have a different name to create a different brand.”

Meanwhile, the casino is already winding down. Table games ceased operations Sunday, and the rest of the casino closes at midnight Wednesday, according to Jonathan Jossel, CEO of PlayLV, which has been operating the Las Vegas Club and the Plaza hotel-casino for Tamares.

Jossel said the gift shop will remain open for another two weeks. The hotel rooms closed more than two years ago.

When Jossel announced the sale of the casino to the Stevens brothers Friday, he said he planned to bring “many” Las Vegas Club staff members to work at the Plaza during the next few weeks. He said Monday that the transition is still being worked out.

“It’s still a work in progress,” Jossel said. “We’re taking as many as we can.”

Tamares gained control of the Las Vegas Club and other downtown properties — including the Plaza, Western and Gold Spike — in 2005, when Barrick Gaming Corp. reportedly defaulted on loan payments to Tamares. Barrick had acquired the casinos from gaming legend Jackie Gaughan in 2004.

“When (Tamares) agreed to provide the debt to Barrick Gaming, they did that because they believed there was value to the underlying real estate, but it was never their intention to get into the gaming business,” said Michael Parks, a CBRE broker who advised Tamares on the sale. “It kind of happened by default.”

Tamares already sold the Western and Gold Spike. With the Las Vegas Club sold now, too, Parks said Tamares can invest more in the future of the Plaza. The investment company also still owns some other land downtown, according to Parks.

Tamares leaves the Las Vegas Club in the hands of someone who has experience with old downtown casinos. Stevens bought into the Golden Gate in 2008 and in 2011 purchased Fitzgeralds, which he turned into the D.

“Both of those properties are multiple times more viable and happening than they were,” said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. Curtis said Stevens was able to transform a pair of “down and dirty joints” into “two very, very vibrant casinos,” partly through promotions that have resonated well with gamblers.

Stevens’ substantial investment downtown extends beyond casinos. He also turned the site of the old county courthouse into an outdoor venue called the Downtown Las Vegas Events Center.

“Obviously, my actions indicate I’m very bullish on downtown,” Stevens said.

Tags: Business