Reno Hilton sold for $150 million - Thursday 12th of May 2005

The largest indoor water park in the U.S. will make waves at the Reno Hilton when new owners take over the hotel-casino and rename it Grand Sierra Resort, officials said Wednesday.''Caesars Entertainment agreed to sell the property for $150 million to a group of investors known as Grand Sierra Resort Corp., according to a joint announcement. ''The deal could close by the end of the year, allowing construction to begin and the 150,000-square-foot indoor water park to open in 2007.'''We see an area that is ripe for continued development and we like how Reno is repositioning itself as America’s Adventure Place — we fit right in with that,? Grand Sierra President Thomas J. Schrade said Wednesday from Las Vegas.''

The water park would include slides, a wave pool, a lazy river for floating in inner tubes and an artificial, stationary wave for surfing, officials said.''Further plans include a second tower on the property with an additional 250,000 square feet of indoor/outdoor water park, Schrade said.''Under Grand Sierra’s plans, condominiums and extensive retail would surround the small lake at the property used for a golf driving range.''The announcement made a big splash with young people in the area.'''It’d be awesome,? said Mike Chheth, 19, who was bowling at the Hilton on Wednesday on a Reno High School field trip. 'I love to swim.?''Others agreed.'''Dude, turn the Hilton into a water park — it would bring people here and we have nothing besides casinos,? said Chelsea Lysne, 17. '''I like it indoors because even in winter you could come in here,? added Raja Ahuja, 18.''The second tower would consist of 1,000 to 1,200 condominium-hotel rooms, used by their owners a few weeks a year and rented out by Grand Sierra the rest of the time, Schrade said.''

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'We plan to expand the property, not contract it,? Schrade said. '''The multiple phases will increase the size of the property and number of jobs. We will be on a five-year building program.?''The project would create 1,000 jobs and attract 1 million visitors annually, officials said.''The various proposals are subject to government approvals, and Grand Sierra hopes to use sales tax anticipated revenue, or STAR, bonds to fund part of the infrastructure.''In 2003, the Nevada Legislature approved such bonds, which are paid back with a project’s sales taxes.'''That is one of the things that attracted us, the pro-business mentality,? Schrade said.''The Navegante Group, which runs Casino Fandango in Carson City, will operate the casino at Grand Sierra after the sale, assuming regulators approve.''Larry Woolf, chief executive officer of Navegante and former CEO of MGM Grand Hotel in Las Vegas, will lease the casino operations, officials said. '''He is a very sophisticated person, and much bigger than what would appear from Fandango,? Reno gaming analyst Ken Adams said. ''

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'Larry Woolf is a delegater. He allows people to be who they can be. He has produced some pretty amazing results.?''The hotel-condo concept is gaining popularity in the gambling industry, Adams added. '''Gaming properties in most jurisdictions have less value than mixed use,? he said. ''The plans will work well with the current attractions at the property that include thrill rides, go-carts, a bowling alley, driving range and shopping, officials said.''The 145-acre Hilton, the largest casino in the world when it was built as the MGM Grand in 1978 for $131 million, has nine restaurants and 2,003 hotel rooms, with 200,000 square feet of convention space.''Schrade and the other investors who make up Grand Sierra list many water park-hotel projects around the country they have successfully developed as a model for the Reno plans. Schrade also has experience developing tribal casinos.''

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Grand Sierra engineer Terry Ramaker helped build many of the water parks in Wisconsin Dells, Wisc., a town known for its parks, Schrade said.'''If you can spend $150 million, I have to think someway or another you have some success and you know what you are doing,? Adams said when asked about the plans.''People who work at the Hilton will remain Caesars’ employees and then Harrah’s Entertainment Corp. employees when those companies merge, and not become Grand Sierra employees until an agreement is reached, Caesars spokesman Robert Stewart said from Las Vegas. Caesars will exist as a legal entity until the end of the year, although the merger should close in June, he said.''Grand Sierra officials will meet with Hilton employees Tuesday, Wednesday and Thursday, said David Wasick, Grand Sierra’s attorney in Reno.'''We are trying to make it a very smooth transition and make everything better,? Wasick said. '''Let’s keep the quality high and the service the best there is, and provide the guest community one of the best resorts in the U.S., and certainly in this area.?''

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The sale is unrelated to the pending merger between Caesars and Harrah’s, Stewart said. '''The strategy we announced publicly was that we wanted to focus on the core assets that produce 80 percent of our earnings,? Stewart said.'''We had 10 or 11 properties that generated 80 percent of earnings before interest, taxes, depreciation and amortization. Some of the other resorts not in that category are fine resorts, but the Reno Hilton was not in that category.?'

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