Palms was for the cool kids
The wheeling and dealing in the casino industry continues as Red Rock Resorts announced that its subsidiary, Station Casinos LLC, has sold the Palms Casino Resort in Las Vegas to the San Manuel Band of Mission Indians for $650 million. The sale is an all-cash deal. If the deal does not close within 18 months, San Manuel will tack on another $28.5 million.
“Today represents an important step for the tribe and its long-term economic diversification strategy,” San Manuel Chairman Ken Ramirez said in a press release. “On behalf of the tribe, we are thankful for the opportunity to join a community that we have come to know and appreciate.”
Opened in November 2001, the off-Strip property has 703 rooms and some of the most expensive luxury suites in the world. It was originally owned by the Maloof family, who were also once majority owners of the NBA’s Sacramento Kings. The Maloofs were all about that life – the Palms fit the niche of “hip luxury” in Vegas. It was the setting for MTV’s “The Real World” in 2002 and for most of the run of “Celebrity Poker Showdown” on the Bravo network.
Station Casinos bought the Palms in 2016 for $312.5 million and has spent $620 million on renovations over the years.
The Palms closed in March 2020 because of the COVID-19 pandemic and is one of the few casinos that still has yet to open, even at partial capacity. In fact, per the terms of the sale agreement Red Rock is not allowed to reopen the property.
Gaming analyst Barry Jonas of Truist Securities said that it is a good deal for Red Rock. In a memo, he explained, “We are positive on the sale. The purchase price comes in below (Red Rock’s) nearly $1 billion total investment (in the Palms), but we believe (Wall Street) had largely written the property off given recent underperformance and its COVID-related closure.”
Las Vegas a second home for San Manuel
Though the San Manuel tribe is from California, it has strong ties to Las Vegas. It already sponsors the NHL’s Vegas Golden Knights, the NFL’s Las Vegas Raiders (still not used to typing/saying that), and the Raiders’ home, Allegiant Stadium.
More than that, though, the tribe has contributed to the Las Vegas community. It donated $9 million combined to UNLV’s William F. Harrah College of Hospitality and William S. Boyd School of Law and this year, the San Manuels have contributed $250,000 to eight Las Vegas charities.
Announcing the donations in December, Chairman Ramirez said, “We have so many team members, friends and partners who call, or have called, Las Vegas their home. It’s in this spirit of understanding and solidarity that we were moved to show our support for Las Vegas. Non-profits are struggling with community needs far exceeding their resources — yet they play such a vital role in healing and recovery.”
The two parties expect the Palms sale to close late this year.
