The Bunnies are Back!

Here’s a little something for all you national news outlets looking for stories, just remember where you heard it first. When George Maloof, Scott DeGraff, Michael Morton and Hugh Hefner re-launched the Playboy Club brand at the Palms Resort last month it was expected to help play a role in the rejuvenation of a brand based off a magazine that has seen its circulation shrink steadily over the decades. Barely a month after opening, the Playboy Club is a hit that is helping the Palms lure high-rolling players away from the mega-casino properties on The Strip. Even more importantly, the Playboy name is once again on the minds and lips of trendy influencers both in Las Vegas and around the world who have given the upscale and refined Playboy Club-style of partying a resounding thumbs up. Sources within the organization now tell the Eye that plans are already underway for several new Playboy Clubs that will attempt to re-usher the Playboy era into society. “It’s no secret that the Playboy Club brand grew too fast and during a time when subscription numbers were dwindling,” our source told us under the condition of anonymity, “It was only a matter of time until they couldn’t sustain themselves. The success of the Playboy Club in Las Vegas indicates that people are ready for a more grown up nightlife experience and that’s what the Playboy Club brand will offer them.” Our spy tells us that negotiations are already taking place for two more Playboy Clubs, the next of which will launch in a pre-existing casino location in London, England in 2009 and another that is sure to set Macau, China on its ears in 2010.

Morgans Not Alone

While we’re pretty sure this story won’t have much day-to-day impact, it’s a pretty interesting look at the deal behind the Hard Rock Hotel deal. It was announced last week that Morgans Hotel Group has entered into a partnership with DLJ Merchant Banking Partners (DLJMB) to create a joint venture called Hard Rock Holdings, which will own and operate the newly purchased property. As part of the deal, Morgans will make an initial cash contribution of $50 million in exchange for 1/3 equity interest in the joint venture, while DLJMB will contribute $100 million in cash in exchange for the remaining 2/3 of equity interest. This $150 million will help finance the acquisition of the property once all parties sign off on the partnership. At closing, Hard Rock Holdings will enter into a management agreement with Morgans, who will manage the hotel, retail, food and beverage aspects of the property, as well as other businesses related to operating the Hard Rock.  Other terms of the agreement state that DLJMB will fund 100 percent of the capital to expand the Hard Rock property – up to $150 million – and that Morgans will have the option to fund the expansion projects proportionate to its equity interest in the joint venture.

"Entering into an agreement with an equity partner has been a top priority for us in anticipation of our closing the Hard Rock transaction, and we are extremely pleased to have reached this agreement with DLJ Merchant Banking Partners," stated Ed Scheetz, president and chief executive officer of MHG.

"We are very pleased to be partnering with Morgans Hotel Group to complete the Hard Rock transaction," said Steven Rattner, managing director and head of DLJ Merchant Banking Partners. "We have significant experience in the hotel and gaming sphere, and are extremely excited at the prospect of taking ownership in this iconic property with a world-class operating partner."

Continued Scheetz: “Together, we will transform the Hard Rock into the premier boutique property in Las Vegas. We will also explore the promising development opportunities to sell, joint venture and take advantage of the excess land and branding rights.”

This new partnership virtually ensures that the Hard Rock deal now appears set in stone and can move forward to an expected close by the end of this year or very soon into the new year. Another interesting side note is the amount of expansion talk included in the partnership. We’re just guessing, but it would seem as though Peter Morton’s expansion plans may continue after all and, according to some whispers we’ve heard, that might happen sooner rather than later.

Diamonds, Stars and Awards, Oh My!

Over the last several weeks, this column has been filled with national accolades, awards and praise that have been given to worthy Las Vegas restaurants and hotel properties, and that’s not going to change this week with the news that Wynn Las Vegas has earned both a Mobil Five-Star AND a AAA Five-Diamond rating – making it the first casino resort in the world to achieve this monumental feat! “"We are motivated and driven by the responsibility we have to our guests," stated the legendary Steve Wynn, chairman and CEO of Wynn Resorts.  "They expect us to understand who they are and trust that we'll make every effort to provide a unique and completely satisfying experience.” However, it wasn’t just the property itself that doubled up on the prestigious rankings, as Alessandro Stratta continued his award-winning run, this time at Wynn’s signature restaurant bearing his name, Alex. "All of us here at Wynn Las Vegas are uncompromising in our pursuit of excellence," added President Andrew Pascal. "It is very gratifying to have the commitment and performance of our employees, managers and designers acknowledged by both Mobil and AAA.”

Other outlets receiving four-diamond rankings from AAA included Bartollota: Ristorante di Mare, Wing Lei and Okada. “This reinforces Wynn’s philosophy that exceptional dining results from the daily presence of the executive chefs and the uncompromising execution of their teams,” confirmed Wynn PR goddess Denise Randazzo.

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