Thick Canadian accent on deal for Hard Rock
WHEN Virgin Group founder Richard Branson was at the Hard Rock Hotel last week to announce the resort’s purchase, yours truly asked during a Q&A what it sold for and who the majority owner is.
“We’re not going to make this a boring business talk,” Branson replied. “But I’m sure somebody can let you know some other time.”
Well, he was right. And while the flamboyant British billionaire captured the spotlight for the deal, much of the new ownership, in fact, hails from Canada.
The Hard Rock — whose sales price wasn’t announced at the party-like news conference March 30 or in Virgin’s press release — traded for about $500 million, a source familiar with the matter said this week.
The purchase was backed by a
$200 million loan from Jpmorgan Chase Bank, property records indicate.
The buyers paid a lot less for the resort than prior owners. The Hard Rock opened in 1995, and developer Peter Morton reached a deal in 2006, during the bubble years, to sell it for $770 million in cash.
Plans now call for the Hard Rock, a mile east of the Strip at 4455 Paradise Road, to be rebranded as a Virgin property by the end of 2019. Its new CEO, Richard “Boz” Bosworth, said last week that the owners will spend “hundreds of millions of dollars” overhauling the hotel-casino, which will keep the Hard Rock name until the changeover is finished.
The buyers include Branson’s Virgin Hotels unit; Los Angeles-based Juniper Capital Partners; Bosworth, founder of Las Vegas’ Bosworth Hospitality Partners; Toronto’s Dream Alternatives, which announced this week that it spent $29 million for a roughly 10 percent stake; and Toronto’s Cowie Capital Partners.
Other investors include the Laborers’ (or Labourers’, if you’re up north) International Union of North America’s central and eastern Canada pension fund, based in Ontario, and Toronto’s Fengate Capital Management, which said it “partnered” on the deal and is managing its investment on behalf of LIUNA.
One of the American firms also has Canadian ties. Juniper founder Jay Wolf is originally from Toronto, said Joe Mancinelli, chair of the LIUNA pension fund.
Even the seller, Brookfield Asset Management, has a Toronto headquarters.
Canadians are no strangers to
Las Vegas. They snapped up lowpriced houses here after the market crashed and are the largest source of foreign tourism.
Some 1.44 million Canadians visited in 2016, making up 25 percent of all international visitors, said
SEGALL
percent to 1.75 percent.
RATE hikes likely
The Fed’s policymakers signaled at that meeting that a total of three rate increases were likely this year. But some economists have speculated that if further signs of rapid economic growth emerged, the Fed would raise rates faster to try to keep inflation under control.
Last month’s modest job gain may indicate that some employers want to hire more but are struggling to find the workers they need. A separate government report last month showed that there was nearly one open job for every unemployed person, the lowest ratio on records dating back two decades.
Edward Daniel, chief executive of Metropolitan Health Services, says he has raised pay and sweetened benefits to try to fill his 740-person company’s roughly 80 open jobs. Daniel’s firm, based in Herndon, Virginia, provides services to hospitals, such as valet parking and “sitters,” who stay with elderly or mentally ill patients after they’ve been sent home from operations.
“Across the board, hiring is a challenge,” Daniel said.
His pay for sitters has increased from $10 to $12 an hour, mostly to keep up with raises at retailers and fast food restaurants.
The company now offers a 401(k) to all employees after 30 days on the job and provides a prescription drug discount card. By June of next year, it plans to pay half its employees’ educational costs.
It’s a big change, Daniel said, from
a decade ago, when the company offered no benefits at all. Since then, the company’s business has grown steadily.
Frightful weather
Some of the drop-off in hiring for March was likely weather-related, with late spring snowstorms blanketing the Northeast, closing construction sites and potentially postponing shopping trips for spring clothes. Construction companies cut 15,000 jobs, the sharpest monthly drop in three years, after five months of big gains. Retailers shed 4,400. Hotels and restaurants added just 4,300 workers, the fewest in six months.
Some higher-paying sectors still posted solid gains: Manufacturers added 22,000 jobs. Professional and business services, which include such fields as accounting and architecture, gained 33,000.