Park Place Entertainment Corporation (NYSE: PPE) today announced that it has reached an agreement to sell the Flamingo Reno casino/hotel in downtown Reno, Nev., to RFC Reno, LLC, a subsidiary of Capital One, LLC, anticipating sale completion within 30 days. Park Place said it will close the Flamingo Reno at 12 noon on Tuesday, Oct. 23. Terms of the agreement were not disclosed.
Following the sale of the property, Park Place will focus its Reno business operations at its Reno Hilton hotel/casino, which is marketed as both a convention and leisure destination. Flamingo Reno guest reservations on or after Oct. 23 will be honored at the Reno Hilton.
“After evaluating carefully our operations in Reno, we have concluded that the economic and competitive conditions there require us to concentrate our efforts on a single property, our flagship in Reno, the Reno Hilton,” said Scott LaPorta, executive vice president and chief financial officer. “We regret the necessity of this decision, but the continued challenges in Reno, particularly the significant reductions in air service over the last 18 months, have caused our Flamingo Reno to operate at a loss. We have, therefore, agreed to sell the property and focus our resources on the Reno Hilton.”
“We are very pleased to re-enter the Reno market and secure a location in the heart of the downtown casino corridor,” said Ken Merkey, chief executive officer of Capital One. “Going forward, we will work closely with city officials to explore plans that will help us develop this asset more fully - matters such as the relocation of the railroad tracks, and the potential to increase parking capacity. We believe that the permitting, planning and design phase will take several months and are not anticipating reopening the property until improvements are completed.”
Capital One is a Las Vegas-based real estate development company. Since 1993, the company or its affiliates have specialized in re-developing gaming properties. Its projects have included the Delta Downs Racetrack in Vinton, La., which it sold on May 31, 2001, to Boyd Gaming for $125 million; the Reno Ramada casino/hotel, which it remodeled and sold to Mountaineer Racetrack Gaming Resort; and two small casinos in Las Vegas.
Flamingo room reservations that include the night of Oct. 23 and all future bookings will be honored at the Reno Hilton at the confirmed rate or cancelled without penalty according to guests’ preference. Park Place also has established a transition team to work with event planners to relocate meetings and catered functions to the Reno Hilton.
Approximately 1,000 people are employed at the 600-room casino/hotel. They will be offered opportunities to apply for positions at other Park Place resorts, including the Reno Hilton and Caesars Tahoe. The company also will hold a job fair to assist those who seek information about other regional employment opportunities. Employees who leave the company will receive salary through Dec. 4, 2001 and health benefits through the end of the year.
The Flamingo Reno originally opened on July 1, 1978, as the Sahara Reno - part of the Del Webb Corporation. Del Webb sold the Sahara Reno to Hilton Hotels Corporation on Dec. 29, 1981. Hilton’s gaming division was spun off as a separate independent company, Park Place Entertainment Corporation, which later named the property Flamingo Reno.
In December 1999, Park Place announced plans to sell the Flamingo Reno to Sapphire Gaming LLC, an affiliate of the Hertz Investment Group of Los Angeles. On July 4, 2000, Sapphire withdrew its offer. In recent months, Park Place has sought other buyers.