Las Vegas Land of Boxing News: Bankrupt Lucky Dragon Casino Sells for $36 Million
By Robert Brizel, Head Real Combat Media Boxing Correspondent
Las Vegas, NV (April 23rd, 2019)–Not all Las Vegas casinos attract good luck. The unlucky Lucky Dragon was one of them. Designed to offer Asians and Asian Americans a unique cultural experience on the Las Vegas strip, the Lucky Dragon instead stripped investors and developers of their cash, going from real estate fantasy to reality to bankruptcy in the short span of 15 months.
The Lucky Dragon’s remaining hotel officially closed its doors on October 2, 2018. There were no bidders in a public auction for the property held on October 30, 2018, with a minimum starting bid and asking price of U.S. $35 million, completing its financial bust.
The nine story 203 room Asian themed Lucky Dragon Casino and Hotel in the Las Vegas strip in Nevada, the newest hotel on the strip, which opened in November 2016 to great fanfare, which went broke for $50 million dollars in legal debt in February 2018 and closed its doors October 2018, has been sold for U.S. $36 million dollars and will become a new name non-gaming hotel, with convention and conference space for visiting groups. The rise and fallof the Lucky Dragon in Las Vegas is an education to the general public, a classic example of how cost overruns and financial irresponsibility lead to disaster, and why risky finanancial ventures doomed from the start should never be commercially financed with loans which will be repaid.
According to the Las Vegas Review-Journal, Lucky Dragon developer Andrew Fonfa’s group, citing their appraisal, said the Lucky Dragon off-Strip property was worth $143 million. However, project lender Snow Covered Capital, linked to San Francisco developer Enrique Landa, said its appraisal valued the property at only $60 million. At the 36 million dollar sale price, the Lucky Dragon sold for the value of an apartment complex. With only 203 rooms, the Lucky Dragon building offers more of a personable experience than a humongous one for those who desire to see Las Vegas calm and quiet. The key point is by developer Andrew Fonfa’s own admission, his group lost a value 107 million dollars, a stasggering figure far exceeding the 36 million dollars in loans owed of their original 50 million dollar loan amount which partially financed the project.
Ironically, the conversion of the flashy shuttered and bankrupt nine story Lucky Dragon Hotel and Casino into a brand new convention space opens the door for the still as yet not renamed Las Vegas strip venue to host major boxing and MMA shows in the near future. This is the best angle to reinvent the purpose of the Lucky Dragon site, as its foot traffic was virtually nonexistent when it was open despite its hyped Asian motif.
A December 2, 2016 launch of a direct airplane flight between Beijing, China, and Las Vegas, Nevada, was supposed to provide the conduit for the big time gambling Chinese whales to fly to Las Vegas and drop their money in Las Vegas at the Lucky Dragon. The Lucky Dragon, though, proved to be unlucky, as Chinese and Asian whales did not fly to Las Vegas and take the bait. By December 2017, it became clear to Las Vegas strip regulars the mostly empty Lucky Dragon was in financial trouble because nobody was going there.
Don Ahern, chairman and CEO of Las Vegas construction equipment rental firm Ahern Rentals, made an April 2019 purchase of the 2.5 acre Lucky Dragon Boutique Hotel and Casino, on the Las Vegas strip at 300 West Sahara Avenue, for the rock bottom bargain price of $36 million dollars from San Francisco developer Enrique Landa’s Snow Covered Capital. The sale price does not cover Snow Covered Capital’s loss, falling 14 million dollars short of its 50 million dollars in loans for the Lucky Dragon project to developer Andrew Fonfa. “We’re very glad the property has a new owner with a long term vision. The Lucky Dragon is a terrific property with (which still has) a bright future,” noted Landa.
Designed primarily as a local regional casino designed to attract Chinese and Asian whales from Asian Countries and bettors from China, Hong Kong the Far East, and Asian American immigrants living on the American West Coast and living in big cities in the United States and Canada, and Nevada Asian American locals, the Lucky Dragon failed to draw crowds or generate Asian or public interest despite its external stone dogs and Asian themed casino and hotel. Big crowds did not appear to gamble, stay at the hotel, or even patronize the lucky Dragon out of curiosity, as regulars did not defect or wander from the other larger established casinos of Las Vegas and its surrounding area. The Lucky Dragon was an Asian themed idea with good intent, and considerable promise, but the idea did not pan out as the developer and investors had planned. The casino and restaurants closed in January 2018, and the hotel went into foreclosure in February 2018 right afterwards.
The demise of the Lucky Dragon probably occurred in November 2015, long before it attempted to realize its Grand Opening. The Las Vegas City Council, acting as the heads of the Las Vegas Redevelopment Agency, rejected a request from the Lucky Dragon developers for $25 million in Las Vegas City subsidies developers wanted for the project. The City of Las Vegas was not going to provide public money to underwrite the Lucky Dragon casino project, thought city leaders considered it. The request, when the developers ran into cost overruns and insufficient financing to finish the project, put the Lucky Dragon into a desperate loan situation, and doomed the Lucky Dragon from the start when the new hotel casino failed to generate a following. The Lucky Dragon had a great idea with its boutique Hotel casino with an Asian theme, but in marketing its real estate genre concept in advance to Asian gamblers only, it inadvertently alienated the regular casino market of the everyday gambler who comes to Las Vegas and wants to have a good time.
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