Friday, January 16, 2009 • Source: Las Vegas Sun / In Business Las Vegas
By Mark Hansel
The purchase of the Barcelona Hotel on Craig Road near Nellis Air Force Base by the Siegel Group Nevada is the latest expansion of that brand in Southern Nevada.
The property is the second hotel for Siegel Group Nevada. The company purchased the Gold Spike in downtown Las Vegas for $21 million in February, just six months after the previous owner had paid $15.6 million for it.
The Barcelona price, which includes the casino, a 179-room hotel, a convenience store with a Shell gas station that is leased by Green Valley Grocery and 5.15 vacant acres zoned for multifamily use, was $12.6 million. The casino has a non-restricted gaming license with about 260 slots machines, table games and a live sports-book as well as a restaurant, bar and entertainment area.
Stephen Siegel, president and chief executive of the Siegel Group Nevada, said the property will be rebranded as Siegel Slots and Suites and will provide accommodations on a daily and weekly basis.
“This will allow us to develop a synergy among our portfolio of properties in Southern Nevada,” Siegel said.
The company has announced a rewards program called Siegel’s ClubSM that takes club membership to a new level. Not only can members earn points at any of the Siegel Group’s properties in Southern Nevada, the points can also be redeemed for use at any of the company’s properties as well.
Siegel Group Nevada owns 16 Siegel Suites in Southern Nevada as well as the Mt. Charleston Hotel, a resort property on Kyle Canyon Road that has a restricted gaming license. Under the slot club format, a customer could redeem points earned at a Siegel Slots and Suites casino for credit toward a weekend at the Mount Charleston resort property or use credits earned from staying at the resort for casino perks.
Siegel Suites focus on weekly and monthly rentals, so many residents are long-term tenants. The customer base includes construction workers on long-term assignments in the area.
In addition to earning points for slot play, these members can also pad their point total by paying rent early or staying at another Siegel property.
“A lot of these things people have to do anyway, so it’s like giving them extra points,” Siegel said.
Siegel also plans to offer other perks for residents, such as slot jackpots that give winners the option of taking free rent in lieu of a cash payment and a shuttle bus that travels between the Siegel properties.
While many developers have slowed their expansion because of the tight financial markets, Siegel continues to increase its portfolio.
The Barcelona was the company’s sixth purchase in Southern Nevada in the past 12 months.
“We have a proven track record and lenders have confidence in our business model,” Siegel said.
Siegel Group Nevada specializes in the acquisition and development of under performing real estate and businesses. By focusing on undervalued businesses with upside potential, the group has developed a niche market in Las Vegas.
The business model involves reversing the deferred maintenance at the properties and investing in significant upgrades.
Siegel said the lack of direct casino competition, as well as the proximity to Nellis and the Las Vegas Motor Speedway, made the Barcelona especially attractive.
Gaming at the casino will be handled by United Coin Machine Co. and the race and sports book will be managed by Leroy’s sports book.
“We are very excited to have an owner that is committed to improving this property and bringing in new customers,” said Bob Smith, chief supervisor of Leroy’s.
Siegel has applied for a restricted gaming license for the Mt. Charleston Hotel and plans to apply for an unrestricted gaming license later this year.
In addition to the name change at the Barcelona, the company plans to install new exterior signage and upgrade the landscaping. Inside, Siegel said there would be significant improvements to the restaurant and the entertainment area. The company plans to offer themed events, such as Hispanic night during which the food and entertainment have a distinct focus.
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