Shuttered Lucky Dragon sells for $36M

Don Ahern, chairman and chief executive of Las Vegas construction-equipment firm Ahern Rentals, acquired the Lucky Dragon for $36 million, property records show.

The sale, by San Francisco developer Enrique Landa’s Snow Covered Capital, closed Monday.

Ahern’s purchase breathes new life into a boutique resort that closed less than two years after it opened — perhaps the fastest demise of a Las Vegas hotel-casino in decades — and drew tremendous interest from prospective buyers, but mostly people who had no chance of closing a deal.

“It was very weird,” listing broker Michael Parks, of CBRE Group, said of the response.

Ahern on Monday confirmed that he purchased the 2.5-acre Lucky Dragon, 300 W. Sahara Ave., and said he plans to reopen it as a nongaming hotel, with the former casino building turned into conference and convention space.

He did not provide a timeline for the overhaul but said he plans to change the property’s name. He does not have a new one in mind yet.

“I absolutely will not keep the name,” Ahern said of the Lucky Dragon.

Parks said the Chinese-themed resort did not have an asking price but that he and broker John Knott, head of CBRE’s global gaming group, were trying to get Snow Covered Capital’s money back.

Snow Covered Capital, which issued loans for the project, was owed almost $50 million by the time Lucky Dragon developer Andrew Fonfa pushed the resort into bankruptcy early last year.

Parks, however, confirmed the sale was below his client’s debt level.

Nevertheless, he said, the 203-room resort drew “by far” the most interest of any property that he and Knott have ever tried to sell.

They got calls from “everywhere,” including from across the U.S. and Asia, but practically 98 percent of the supposed buyers were “dreamers,” he said.

The Review-Journal also received numerous calls from people saying they wanted to buy the hotel.

“We could write a book on some of the stories that we heard,” Parks said.

Everyone seemed to be friends with a Chinese billionaire who was going to write a check for the property, he said. Plus, when his team asked for proof of funds, the buyers often couldn’t do it.

Ahern was in the small percentage of people who were “financially capable” of buying, he noted.

Landa, a partner at Associate Capital, said the Lucky Dragon “is a terrific property with a bright future.”

“We’re very glad it has a new owner with a long-term vision,” Landa said.

The Lucky Dragon opened in November 2016 with its hotel and casino in separate buildings. But the resort, which struggled to draw big crowds, closed its casino and restaurants in January 2018, faced foreclosure soon after and filed for bankruptcy in February 2018.

Its swift demise was finalized in early October when the nine-story hotel tower closed and the property was sealed off with chain-link fencing.

Landa’s group foreclosed in late October.

There were signs of financial troubles even before it opened. Las Vegas City Council members, acting as heads of the city’s redevelopment agency, in November 2015 rejected the idea of doling out $25 million in subsidies that the developers wanted for the project.

Fonfa’s group warned it might have to slow or stop work without the help. It was the first time many city leaders could remember even discussing the possibility of propping up a casino with public money, the Review-Journal reported.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.