The Lucky Dragon must have seemed like a good idea at the time.
Despite the fact it was located neither on the Strip nor downtown, it was heralded as the first new hotel on the north end of Las Vegas Boulevard in six years. As the community emerged from recession, the sight of construction alone was enough to give local business and media optimists reason to cheer when it opened on November 19, 2016.
Alas, the Dragon was not so lucky. The operation announced last week it was closing its casino and most of its restaurants despite the approach of the behemoth CES convention and the Chinese New Year celebration. Like a Chinese-themed Motel 6, it will leave the light on for those big-room draws.
With its Asian theme and investors, it held the promise of the addition of a little razzle-dazzle in an area of the community better known for the Golden Steer steakhouse than for golden gaming profits.
All you had to do was overlook its location, the sketchy neighborhood it backed up to, the super-niche casino marketing strategy, the poor vehicle entry access and questionable walk-up potential, not to mention the fact its neighbor across the street was a glorified empty lot that hadn’t been home to a casino since the old El Rancho Vegas burned down on June 17, 1960. Other than that, it had sure thing written all over it.
In fairness, there were reasons to believe the neighborhood was changing for better after investors dumped more than $400 million into refurbishing the care-worn Sahara and re-christening it the SLS. Disappointed investors in that project would be forgiven for wondering if the initials stood for “So Long, Suckers.”
The SLS was immediately scandalized by part-owner Sam Nazarian, who was compelled to apologize to the Nevada Gaming Commission for his previous dealings with a convicted felon who had extorted millions from him. Although Nazarian eventually received an approval for licensure — a decision I believe needlessly muddied the commission’s credibility — the drama was emblematic of trouble ahead. The SLS recorded a net loss of nearly $84 million in the first six months of 2015.
The Meruelo Group, owners of Reno’s Grand Sierra, announced plans last year to buy the SLS and are awaiting regulatory approval to take over the place. The future owners hope to make the property work for the market, but it will take substantial sweat equity to make it a long-term success.
Diminutive by modern casino standards, the Lucky Dragon had its own investment troubles. It appeared to run short of construction capital, at one point audaciously exploring financial assistance from the City of Las Vegas Redevelopment Agency in the form of a $25 million bailout. The agency rejected the request, even after the developers whined that they were building in a “horrendously depressed area,” and the exchange put the casino’s entire financial plan in a new and negative light.
Developers, months later, touted the strength of the project’s financing, calling it “fully funded” in May 2016. Following the flashy grand opening, the development appeared to struggle from the start. Like its in-between location, its marketing also appeared to be neither exactly Asian nor substantially local.
The result made developers Andrew Fonfa and the William Weidner family, folks with successful business track records, look like they hadn’t done their homework.
“The Lucky Dragon appears to be struggling,” the Las Vegas Review-Journal noted, with considerable understatement, in a December headline above a business article. Casino sources report that revenues had lagged at the casino almost from the start, and by December lenders had gone months without being paid.
Although a hiring shakeout is common in the gaming industry after an opening, the Lucky Dragon cut jobs almost from the start. Now many more positions are gone, apparently for good, under the current management.
The Lucky Dragon has fizzled like a wet sparkler, and I’m left wondering who will be willing to take it over and try again to create a success on a tough end of the casino corridor in the shadow of the Strip.
John L. Smith is a longtime Las Vegas journalist and author. Contact him at jlnevadasmith@gmail.com. On Twitter: @jlnevadasmith.
