The Maxim closed its doors

21.11.1999, Lesen Sie hier den Bericht über «The Maxim closed its doors».

Maxim, falling victim to financial battle, closes. The property owner is still seeking a method to reopen the hotel and the restaurant parts only.

By Dave Berns / Review-Journal

The 22-year-old Maxim hotel closed its doors Sunday afternoon, the victim of a competitive marketplace and an ongoing financial battle pitting the property's operator against its owner and mortgage holder.



Meanwhile, Maxim owner Premier Interval Resort continued late Sunday to seek an arrangement that would allow the property's hotel and restaurants to reopen without a casino, according to sources.

Premier executives and the financially troubled property's court-appointed operator lack the gaming licenses needed to run a casino.

The hotel's closure left 690 Maxim employees without jobs just days before the start of the holiday season.

"I feel sad, but it's happening," said hotel security guard William Ocran. "A lot of people look sad to lose their jobs."

Outside of the 1970s-style hotel and casino there were few signs of the pending shutdown.

The marquee continued to advertise "Comedy Max Starring Mac King 7-9 p.m." and "Late-night buffet 11 p.m.-6 a.m." A banner posted along the facade of the parking garage read: "Welcome La Dolce Vita Wedding Chapel."

But inside, the slot area was blocked off with yellow security tape, as workers did a final tally of the coins in the slot machines sitting on the floor of the relatively small 22,000-square- foot casino at 160 E. Flamingo Road. Nearby, cage cashiers counted the money and chips in their booths, as auditors from the Nevada Gaming Control Board monitored the process.



Hotel guests, some of whom were unaware of the shutdown until earlier in the day, checked out, with one seeking a refund on the $54 he had paid for a Sunday night stay.

"We came down this morning, and they told us it was closing," said Larry Miller, of Punxsutawney, Pa. "They never told us when we checked in."

Miller's friend Ed Burns stood nearby at the hotel's registration desk, where he sought that Sunday night refund.

"It's just life," Miller said. "What are you going to do?"

Upstairs at the Maxim buffet, former and soon-to-be-former workers stood around talking about the property's final hours.

"It's hard. It's like family here," said cashier Aurea Fox. "They kept us in limbo."

"Poor management," complained ex-Maxim worker Jackie Mease, who quit in August to work at a Henderson restaurant. "The way the hotel was being run, that's the problem."

By nightfall, the hotel was dark.

The shutdown was announced Friday by Ed Nigro, a longtime gaming industry executive, whose Max Gaming LLC has operated the 800-room hotel since early 1998, most recently for Dallas-based Premier Interval Resort, which lacked its own gaming license to run the property's casino.

Nigro had sought $300,000 from Premier to close an operating shortfall that the Max Gaming boss said was exacerbated by the past year's openings of four new Strip resorts.

Dallas-based Premier, which is headed by the father-and-son team of Gary and Michael Kornman, failed to respond to numerous written requests for money by Nigro, who said that their operating agreement allowed him to tap into a $2 million credit line anytime he wished.

But Premier defaulted on an October loan payment of about $300,000 to mortgage holder Meralex, a Florida-based investment firm that loaned Premier $42 million to buy the Maxim in May. Premier is not expected to make payment of a second installment of about $300,000 due this month.

"I share my employees' emotions, and they looked upon our company as a company to save the Maxim," Nigro said, "and we haven't done that, and that's very disturbing. But I must tell you it's the owners and their lenders that created this situation. They refuse to meet their debts to employees and vendors."

On Friday, it appeared that the hotel and restaurant sides of the Maxim might receive a reprieve, with the court-appointed selection of Larry Bertsch to oversee the property's operations in light of the loan default.

But Bertsch told Nigro that he did not have Meralex's permission to assume the Maxim's debts for employee benefits and vendor billings, which exceed $2.6 million. Instead, Nigro said Bertsch was told to evaluate whether or not to reopen the hotel without gaming or simply remain closed.

At the heart of the issue, according to a source close to the Maxim's operations, is the relationship between Premier and Meralex.

Gary Kornman is a financial adviser to Meralex boss Howard M. Jenkins, chairman and chief executive officer of Publix Super Markets, operators of about 600 grocery stores in the southeastern United States, the source said.

Observers wondered how a financially savvy operator like Gary Kornman could default on a loan just 90 days after purchasing the property. Premier President Michael Kornman failed to return a Sunday afternoon phone message seeking comment, although he was at the Maxim earlier in the day, awaiting a meeting with Bertsch.

The source said Premier and Meralex may have forced the closure simply to eliminate the property's outstanding debt and union contracts, making it more attractive to a potential buyer, saving at least $250,000 in monthly operating expenses

One such candidate is San Francisco real estate investor Luke Brugnara, the owner of six Bay Area office buildings and a shopping mall who recently purchased the Silver City Casino on the Strip.

Brugnara said Friday he is interested in buying the Maxim but has no interest in breaking union agreements.

---

A security guard watches as Maxim workers remove money and tear down slot machines Sunday afternoon as the struggling off-Strip property closed, leaving nearly 700 people without jobs.


Valet parking was closed Sunday at the Maxim; the rest of the property followed suit later in the day.


Maxim employee Terrie Rydel, left, who had worked at the hotel-casino for 15 years, hugs Norma Jean Petote, who worked at the East Flamingo Road property for 10 years before leaving in 1996. Petote stopped by the hotel bar Sunday to share drinks, laughs, tears and memories as the Maxim closed. Photo by Craig L. Moran

Quelle: Las Vegas Review-Journal

--- Ende Artikel / Pressemitteilung The Maxim closed its doors ---


Weitere Informationen und Links:

		
 
Weitere Nachrichten der Gaming-Branche