ucky Dragon Hotel and Casino was billed as a property of many firsts. Most notably, it was the first hotel and casino resort to be built from the very ground up in post-Recession Las Vegas. In addition, it was the first Vegas casino to specifically target customers from Asia. However, despite the initial euphoria that accompanied its launch, the property was pushed into Chapter 11 bankruptcy protection a little over a year after its grand opening and is now expected to be sold at a September 10 bankruptcy auction.
The property opened doors in December 2016 as a boutique Asian-themed hotel and casino resort. It was built on a portion of vacant land in the northern end of the Strip, an area that previously remained underdeveloped, but on which more and more developers have been setting their sights over the past several years.
Early in 2018, Lucky Dragon owners signaled that the property was embroiled in heavy financial troubles and that certain portions of it would be shuttered until the issues were sorted out. The resort’s casino floor, as well as its dining facilities, were among those to close down. Staff members were laid off, and the resort’s management announced that the property was reorganizing and was facing foreclosure.
In February, just days before the previously announced foreclosure, the property’s management pushed it into Chapter 11 bankruptcy protection to protect jobs, pay creditors, and provide certainty to the market, court papers read. At the time, Lucky Dragon employed 98 people.
The Asian-themed casino resort failed to draw crowds, especially from the Asia-Pacific region. According to analysts, its location was among its biggest issues. Others claimed that Asian customers would not necessarily take a trip all the way to Las Vegas to visit an Asian-themed resort. In addition, the property’s particular focus on customers from Asia was deemed a mistake by industry experts.
As mentioned above, Lucky Dragon is expected to be sold at a bankruptcy auction on September 10. Developers have previously said that a number of prospective buyers had shown interest in the property.
However, according to court papers, Lucky Dragon creditors have pointed out that owners of the troubled property have been offering assets to the market for over a year, but apparently, no viable buyers have been found. Lucky Dragon’s management was even advised to “abandon the property” and thus avoid the potential racking up of additional costs that a failed sale could create.
In previous comments about Lucky Dragon, Las Vegas casino owner Derek Stevens (the D Las Vegas and the Golden Gate) told the Las Vegas Review-Journal that the property was really nice but its location was “pretty tough” and that there was little pedestrian traffic in the surrounding area.
Lucky Dragon sits on a site just west of Las Vegas Boulevard. The property includes a nine-story hotel tower and a separate 27,500-square-foot casino building.
The hotel and casino resort was valued at $143 million late last year. It is important to note that nearly $90 million of the total investment into the property came from foreign backers each of whom invested $550,000 into the project in hopes to obtain a green card. Under the EB-5 visa program, foreign citizens could be granted a permanent visa if they create jobs in the United States.
Bloomberg wrote in an article from earlier today, citing bankruptcy court filings from investors, that they could lose their investment and their chance to obtain a green card. As a result, Lucky Dragon’s backers are asking for a buyer that would allow them to retain at least some of their interest.