After what was thought to be a temporary closure of its casino and restaurants on Jan. 4, the Lucky Dragon Hotel and Casino, which opened on Nov. 9, 2016, just west of Las Vegas Boulevard, is now reportedly facing foreclosure.
In order to cut operating costs, just a few months after opening Lucky Dragon shut down one of its restaurants and about a hundred people including the general manager were fired. The Las Vegas Review-Journal also reports that workers have been disassembling some of Lucky Dragon’s 200-plus slot machines.
According to the news agency, this past September the Chinese-themed hotel located off the Las Vegas Strip was hit with a default notice in connection with a $90 million loan taken out by Lucky Dragon developer Andrew Fonfa, founder of ASF Realty & Investments, in spring 2016. And that, according to Clark County records, the first purpose-built gaming project in Las Vegas since the recession is scheduled to either be repossessed or sold at a foreclosure auction on Feb. 6, after last week a notice for foreclosure sale was filed, according to county records.
Per the auction notice, some $48.9 million remains outstanding on the loan, reports the Las Vegas Review-Journal. The loan for the 2.5-acre resort, which consists of a 27,500-square-foot casino and a nine-story hotel in separate buildings, was reportedly issued by Snow Covered Capital, a company, which according to records indicate is connected to Enrique Landa, a San Francisco real estate investor with Associate Capital.
The Review-Journal reports that neither Fonfa or Landa could be reached for comment Tuesday.
The boutique casino was five years in the making from concept to ribbon-cutting and upon its official grand opening in December 2016, the property had plans to hire 800 people, however, the relatively small casino floor that is heavily represented by baccarat tables never drew the crowds that were expected.
Last year, Chinese gamblers playing at other casinos indicated to the Review-Journal that the problem was not the entertainment and food offerings at Lucky Dragon but rather its less than generous gaming and comp policy.
Lucky Dragon management, just weeks after the Review-Journal reported on the hotel’s struggles, announced that it was “beginning the process of repositioning and, in doing so, will have a reduction in staff while it temporarily closes all gaming and restaurant operations.”
In the statement, the company reportedly said that the restaurants and casino floor would resume operations “within six months,” and that the Sahara Avenue property’s 203-room hotel would remain open, along with the hotel’s first-floor bar, Cha Garden restaurant and gift shop.
To make an increasingly bad situation worse, in March 2017, the casino’s ownership company, an insurance firm, and a contractor were sued by Midwest Pro Painting, which claimed it was owed $793,300 for work it had done on the Lucky Dragon.
The Review-Journal further reports that as part of the litigation, Penta Building Group, Lucky Dragon’s general contractor, alleged in papers filed with the court that it had been paid approximately $76.4 million, but that about $7.4 million remained outstanding for unpaid work.
The news agency reports that according to court records, both Penta and Midwest Pro later agreed to dismiss their claims.
Neither of the two firms or their attorneys in the case, responded to requests for comment on Tuesday, according to the Las Vegas Review-Journal.