When the Siena sold on the Bankruptcy Court’s equivalent of the courthouse steps for $3.9M on Wednesday, terms of the closing were 48 hours. Yet the deal still hasn’t closed. What’s the hap?
The mortgage holder sent this letter to their investors. The assertion that the investors might reap ANY return at all on their investment is specious at best. Any investment in the Siena is wiped out.
REreno has covered recent Siena action, and has a pretty spicy archive of documents. Downtown Makeover has a good comment string going on, too.
Update 17 November – The Bankruptcy Court judge finally issued his Order approving the Sale of the Siena to Grand Siena LLC this afternoon. Both the buyer and the seller had "out" clauses if the Order was not entered by today. The Order is a very interesting document,and contains information never before made public. There is a letter from Barney to the Gaming Commission that is CC’d to 8 parties, 3 of which are among the 5 member partnership buying the Siena. I’m guessing the other 2 are on the CC list, so I’ll do some digging to find out who they are. The other interesting attachment is the list of personal property included in the $3.M sale, which lists a depreciated value of about $12M. Did the Siena really sell for a third of the value of the furniture, kitchen equipment, slots and 15,000 16 ounce plastic logo beer cups? The new owners could have a huge garage sale, implode the Siena when they are done, end up with a prime Truckee Riverfront property, and still clear $5M or so. Read the Order HERE.
During an aside at the auction hearing, each bidder estimated what percentage of their bids were the physical property and personal property. 2 of the bidders were at 75/25, which would value the Siena at $48M if the depreciated personal property list is accurate. The third bidder was at 70/30 (I believe this was Grand Siena LLC) would would translate to a value of $40M. Did they just steal the Siena?
My gut is that the Siena package was worth about $13.5M. The needlessly rapid auction sale excluded a lot of entities who may have been interested in the property (if the need to sell the Siena was so dire, why did it take over a week to enter the Order?). The Order allowing the auction to take place was only entered the day before the auction, and I personally know of one qualified bidder who dropped out because of uncertainty on what the terms were actually going to be. If my estimates of real value are in the ballpark, the RE Reno investors who financed the Siena were hosed out of about $10M in this process. That would be about 20% of their original investment, but it would have been something. Why do I sense the Siena saga is going to be with us quite a while longer?
Guy Johnson
Mike,
You are not the only one. I feel the Siena is a great space. It would be a shame to see it shuttered.
I’ve only lived in Reno a few years, but the Siena was one of my preferred places downtown. Some good memories there.
Back when we still lived in Chicago and were considering relocating here, my wife’s prospective employer flew her out to Reno and put her up in the Siena, partly as a way to show off downtown Reno’s best.
I tagged along that trip and explored Reno while my wife attended a series of interviews. The Siena became my home base.
That was more than four years ago. Since making Reno our permanent residence, we’ve visited the Siena multiple times. Coincidentally we found ourselves having after-dinner drinks at the Enoteca (Siena’s downstairs wine bar) just one week prior to the Siena’s closing (unbeknown to us at the time).
Martin
Hello Mike,
I have some mixed emotions about the “fate of the Siena” and the “fate of downtown Reno.” On one hand, downtown certainly does not need yet one more shuttered up casino. Also, I would very much like to see some people find work.
On the other hand, I believe that Reno simply has to move away from the notion that downtown can ever be revitalized by casino gambling. It was a glorious era, but that era is long gone, and I fear that pinning our hopes on resurrecting casinos shows that we still don’t “get it.”
SnowBored
I have an acquaintance in town staying at Harrahs with whom I had dinner tonight. I went down there to meet him. I don’t get downtown much, and have not been in Harrahs for a long time. Tonight it resembled a morgue. Amazing really. If tonight is typical, I don’t know how they keep that place going. They must be paying for it out of their other casinos.
The “fate of downtown Reno”, may not rest on the Siena but I hope does not rest on Harrahs either.
Sully
Depends on which comes first the chicken or the egg. If the many issues surrounding downtown were resolved, the Siena might not have closed in the first place. As Snow
Bored said Harrahs resembled a morgue.
Goes something like this: If you don’t think customers are important to a business, try doing business without customers for awhile.
Mike McGonagle
I just posted a big update on the latest Siena post. The BK judge finally issued his Order, and the sale should record this week. VERY interesting document to read!
NativeSun
Harrahs Entertainment announced today that it is changing its name to Ceasars Entertainment. This probably makes sense from a worldwide branding perspective.
The Reno property, however, stands on much less secure footing now. It has been losing money for a long time, and changes are afoot at Harrahs. (Note it had to cancel its IPO for a lack of investor interest).
You heard it here first.
Sully
Oh yeah Harrahs. Is that place still open? Back about 10 or so years ago it was a nice place. Since then and a few remodels it’s become a nightmare. Last time I was there I had to ask for directions three times just to get back out to the parking garage. If I was a fire marshal, I’d close it down until properly placed exit signs were installed. At least I could get out of the building without asking for directions. 🙂
Changing the name will not change the building.