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Mar. 04, 2008
Copyright © Las Vegas Review-Journal

Hooters brand will get the boot

New owner will rename, remodel off-Strip property

By ARNOLD M. KNIGHTLY
REVIEW-JOURNAL

Say goodbye to those orange short-shorts.

Hooters Hotel will be rebranded into a yet-to-be named boutique hotel following a $130 million redevelopment of the property that could begin later this year, the investment group purchasing the hotel said Monday.

Santa Monica, Calif.-based Hedwigs Las Vegas Top Tier is completing its financing for the $225 million transaction and hopes to close the sale by late spring, Hedwigs principal Richard Bosworth said.

"This will be a complete redevelopment of the asset that includes a lifestyle, entertainment-driven boutique hotel and casino complex," Bosworth said.

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    • Los Angeles-based designer Dodd Mitchell is heading the redesign team and will use the current structure in the new plans.

    Hedwigs made its third $500,000 nonrefundable, nonapplicable fee payment Friday to retain exclusive purchase rights for the property.

    Bosworth said the group wanted to close the deal late last year, but decided to activate a one-month extension clause because of the downturn in the capital markets.

    The investment group plans to announce a partnership with a boutique hotel operator to manage the rebranded property.

    Hedwigs also is negotiating with high-end restaurant developers and nightclub owners to open at the property, Bosworth said.

    The redesign will also include expanding the casino area and changing some of the hotel's 727 rooms into suites.

    However, Bosworth declined to say if the property would remain open during the changeover, which could take as long as 18 months.

    Mitchell has worked on the redesign of the Roosevelt Hotel in Hollywood, Calif., Hotel Valencias in San Jose, Calif., and San Antonio, and Thompson boutique hotels in Beverly Hills, Calif., and Manhattan.

    Mitchell, which has been working on design plans since April, was in Mexico on Monday and was unavailable for comment.

    This would be the property's second makeover in as many years. A $130 million redevelopment of the of the former Hotel San Remo turned the off-Strip property into Hooters in February 2006.

    Bosworth said he wants to rebrand the property because he believes it could be more profitable with a brand targeting higher-end customers than those that visit Hooters.

    "I just believe this location has a higher and better use that can attract higher and more profitable revenues at a major discount to construction costs," Bosworth said.

    Bosworth said remodeling the resort makes more sense than building a new property on the site. The $355 million price, the purchase cost plus redevelopment costs, is approximately 40 percent below what it would cost to build new on the site, he estimated.

    Bond analysts during the past few months have questioned the feasibility of the deal if the property kept its Hooters brand.

    Under the Hooters Hotel brand, cash flow has been falling at the property.

    Cash flow, defined as earnings before interest, taxes, depreciation and amortization, dropped 32 percent to $1.1 million for the third quarter ended Sept. 30. It was $1.7 million in the same period a year earlier.

    The property has yet to report its fourth-quarter earnings.

    "I know the gaming analysts have criticized the acquisition at the $225 million level based on the performance level as a Hooters," said Bosworth, adding the shift to a luxury market will raise revenues in room rates, casino play and food and beverage with limited additional investment.

    Bosworth, a real estate and financial adviser, helped Florida-based Hooters, which has a two-thirds ownership stake in the hotel, purchase the San Remo in August 2004.

    Bosworth, through his firm Nth Advisory Group, is developing a Hooters casino in West Wendover 400 miles northeast of Las Vegas along Interstate 80 with a third-party developer.

    Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or (702) 477-3893.

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    Kevin Brodie wrote on April 26, 2008 03:24 PM: I am booked i nto Hooters from 6th November until 16th November 2008. I am concerned as to whether it will be open then. Should I find alternative accommodation? Thank you,,,,,,Kevin Brodie Hampshire UK England


    Gayle wrote on April 11, 2008 11:23 AM: I will be sad if Hooters in gone. I love staying there. It is my favorite place in LV. It has a home town atmosphere to it. I love the pool and spa as it stays open late unlike the other casinos.


    "J" wrote on April 10, 2008 11:07 AM: This stinks!! I agree with some of the other comments, where are the normal middle class hard working people going to go soon?? I loved Hooters. We drive in from CA about 3-4 time a year and always stay and play there. I love the atmosphere, the size, the good food, and the people. Soon it will be impossible for any of us to go to Vegas and have a good time. Just what is a boutique hotel anyway?? Who cares, I won't be going.


    Tricia wrote on March 27, 2008 11:59 AM: A great idea for a casino to bring in lots of gamblers would be "old school" type of slots. Bring back the fun of coins in/out machines and I bet the casino would be a big success. I think alot of people miss the fun of walking around with buckets of coins! Bring back the fun, bring back the coins!!


    Jim (McLovin) W. wrote on March 18, 2008 10:59 AM: I am deeply hurt that Hooters is/are going away. I find it rather titilating that many take offense to this sort of establishment. If you've kept abreast of what's been going on there, you'd know that it's been nothing but good clean fun. I find it the perfect escape from my hectic life working in Silicone Valley. The tables might have less then favorable odds, I've seen the holdem dealer with one great pair after another, but I really don't mind being nippled and dimed if it's done in a pleasant atmosphere. I've played blackjack and went bust on nearly every hand and still enjoyed myself. Remember, you are in control of your money, if you're on a loosing streak, nip it in the bud by walking away! Win/loss aside, I've won a Hooters football and 2 large stuffed owls- not bad for a booby prize. I will miss Hooters, as far as friendliness goes, their cups overflowithed.


    Sandy wrote on March 14, 2008 10:04 PM: I must agree with Bob (Mar.04) in the fact that "Vegas Buyers and Builders" are most definitely pushing the normal, average, and hopeful, "John Q. Public" out of a location to stay. Soon "us everyday hard workers" will have NOWHERE to go to enjoy a vacation in Vegas! If it will cost so dearly to stay somewhere, we won't have much left to give those table games and slots we love, no matter where they are located. Hopefully, there is SOME Investor somewhere, who is inteligent enough to see the "goldmine" that is rapidly slipping away because everyone is trying to "1-UP" all the rest, chasing "high-end, high-rolling gamblers"...SOMEbody PLEASE remember us "little-guys" who LOVE to come to Vegas and get away from everyday reality for OUR vacations! There ARE MILLIONS of us out there.


    Dwain Berlin wrote on March 06, 2008 03:34 PM: Quote:
    "This will be a complete redevelopment of the asset that includes a lifestyle, entertainment-driven boutique hotel and casino complex," Bosworth said.

    It's inevitable. Hotel owners in Vegas renovate their propertiess like some people change their underwear. LOL


    Tambora wrote on March 05, 2008 01:39 AM: Most of the time you see a white Kid, around 20 something...five earings in his left ear alone, talking some junk, all the while betting two dollars a pop at the BJ tables. People want a nice room, at a nice rate, GOOD food, and some sort of a casino where ( just maybe you might win ) along with a Nice sports book. Get that done, and get some Seniors in there, and you will make it happen.


    MA wrote on March 05, 2008 01:09 AM: Hooters is a great casino, the girls are pretty, its reasonably priced, and everyone is really friendly. The market is oversaturated with high end, overpriced "boutique" casinos. It should have been leveled after the San Remo because its too old. Whoever takes over will have the same problem, the property is 20 years old. You can only remodel so much with the same shitty plumbing and dusty vents. Also there are no attractions like fountains, lions, roller coasters, gondolas, or any other attraction to bring people in and that is why it has failed. The "boutique" hotel will not make it if there is no attraction and complete renovation.


    David wrote on March 04, 2008 08:52 PM: The Palms certainly is not it

    Tha Palms? I can't believe such decadence is allowed in Clark County. I thought prostitution was illegal here?


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