Aug. 24–Several months after David Atwell’s passing, the impact of his dealmaking still is being felt on the Las Vegas real estate market — and beyond.
This month, Atwell’s legacy stretched to court, in a lawsuit filed by a member of his family against the new owners of one of his favorite hotels.
Real estate company Resort Properties of America, headquartered in Las Vegas, founded by Atwell and operated by his daughter Heather, has filed suit against Westgate Resorts and David Siegel. The complaint landed in Clark County District Court on Aug. 11.
Representatives for Siegel and Westgate Resorts have offered no comment.
David Atwell died of cancer in November. He famously engineered the sale of the New Frontier property to the El-Ad Group in 2007 and brokered the deal to develop the land that became the Forum Shops at Caesars. Atwell also tried to mastermind a sale of the Stirling Club at Turnberry Place after the famous spa and entertainment haunt closed two years ago.
Atwell was busy working on property transactions even in the weeks leading to his death, spending hours on the phone from his hospital bed while talking with representatives from as far away as China about deals in Las Vegas. Heather Atwell remembers working with her father for more than four years on Siegel’s behalf as the founder of Westgate Resorts looped around the Strip looking for new properties.
The lawsuit alleges that Westgate failed to pay what Resort Properties of America claims is $1.5 million in service fees owed for helping Goldman Sachs sell the old LVH to Siegel’s company. Ownership of the hotel turned on July 1, when Siegel took over and started playing “Wheel of Fortune” at the hotel’s giant marquee along Paradise Road, pulling off the “L” and later adding a “W.”
Since taking over the hotel, Westgate officials have been busy making upgrades, and not just to the marquee. The gift shop has been moved to the space across from Fortuna coffee bar, closer to the casino floor. There are plans to overhaul Shimmer Cabaret and turn it into a lobby bar. All of the rooms need an overhaul, and the property requires upgrades to its electrical and plumbing systems.
Siegel expects to pay more in restoration and upgrades to the property, which opened in 1969 under Kirk Kerkorian as the International, than he did on the purchase. Westgate reportedly paid more than $150 million for the resort, and Resort Properties of America is seeking 1 percent, or $1.5 million.
Also tucked in the lawsuit are details about Siegel’s interest in properties other than LVH, dating to the fall of 2011 as Siegel tried to return to resort ownership after being forced to shed PH Westgate in 2008. Listed on Siegel’s greatest-hits chart were the Hard Rock Hotel, Palms and Riviera. As Heather Atwell discloses in the complaint, Westgate also was making inquiries about the dormant Harmon property at CityCenter.
In the suit, Siegel is said to have told David Atwell in March 2013 he had “strong interest” in the Riv and had the resources to buy the resort outright.
Instead, a month later, Siegel turned his attention to LVH, as the Atwells learned he had entered into an agreement with Goldman Sachs to buy the hotel. Heather Atwell claims her company still is owed commission for helping connect Siegel to Goldman Sachs in the first place, in September 2011, and lead Siegel to the purchase of the property.
As frequently is the case in Las Vegas business matters, this is far more than a financial issue. Heather Atwell says her family has grown personally close to Siegel and his wife, Jackie, over the past 20 years, when David Atwell began seeking property in the Las Vegas market.
As Atwell conveyed in an email, she felt the deal was supposed to be a celebration for everyone involved and a fitting way to cap her father’s hugely successful real estate career. Instead, she said, it ended up “a victory for Siegel but a tragedy for us who put countless hours, efforts and energy into this deal.”
The legal action might sort out the financial claims at the new Westgate Las Vegas. But the personal fracture, that won’t be so easily mended.
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