Bank REO Properties Sale of Casino Scheduled
Three out of nine parcels of the Dragon City Casino development in Las Vegas, Nevada are scheduled for bank REO properties sale on June 26. The foreclosure auction will be conducted by the Community Bank of Nevada.
The bank REO properties sale stem from the result of an agreement between Community Bank and the property’s bankrupt owner, Spring Mtn, Wynn Investments. Community Bank is the holder of the almost 9.4 acres of land used by developer Andrew Lai as the collateral for the mortgages amounting to $11.3 million.
Lai is the major owner of the said investment company and he took out the loan from Community Bank for the purpose of buying the land. A portion of the development project that Community Bank has on its portfolio runs through the center which was previously planned as a 356-casino and hotel with conference and retail facilities.
When the investment company defaulted on its loan with Community Bank, the latter initiated repossession proceedings. To protect itself against foreclosure, Spring Mtn. Wynn filed for bankruptcy in January to buy some time to find new financial backers or line up refinancing deals to push through with the development project.
Under the agreement, Spring Mtn. Wynn would give up bankruptcy that protects the property from bank foreclosure properties sale if it could not find a buyer or buyers in escrow until the end of May.
All hope was lost to rescue the Dragon City Casino property when a May 16 auction of the whole site, measuring 22 acres, was unable to receive any sale offer despite its bargain price of $27.5 million. The auction also includes a land property owned by Desert Inn Pioneer that decided to sell instead of file for a bankruptcy.
Both Desert Inn Pioneer and the said investment company have paid a total of $25 million for the development site which started in 2002. According to Spring Mtn. Wynn’s bankruptcy financial statements, its total land of 12.2 acres is estimated to be worth $97.9 million.
However, with myriad of cancelled building projects, new rooms as well as declining tourists in Las Vegas, no one wants to take any risk and invest on Lai’s attempt to target middle-income Asian visitors.
On the other hand, a lender placed Desert Inn Pioneer’s 2.1-acre share of the development project on bank REO properties sale after it defaulted on its $9 million loan.
