Events of recent weeks have reminded us that two things are inevitable on the Las Vegas Strip: Ambition and change.
On November 13, the Las Vegas Review-Journal reported that Chilean business mogul Claudio Fischer is poised to complete the purchase of ten acres of land on the Strip. It’s a deal nearly three years in the making, presumably resulting in a new casino resort.
The news came on the heels of several other big announcements about the Las Vegas casino industry.
In early October, it came out that billionaire businessman Tilman Fertitta is developing a new 43-story mega-resort on the Strip. Fertitta owns five Golden Nugget casinos, the NBA’s Houston Rockets and a massive portfolio of dining brands. He has also recently accumulated a significant stake in Wynn Resorts.
All the while, plans are being set in motion to ensure that the inaugural Las Vegas Grand Prix, scheduled for November 2023, is immediately one of the world’s great sporting spectacles.
A Long Time Coming
Though Fischer’s name will not be familiar to the average American, Fischer is no stranger to the Las Vegas Convention and Visitors Authority (LVCVA).
In February 2015, the LVCVA acquired the then-bankrupt Riviera and the 25-acre plot on which it stood. It paid $182.5 million for the property and a further $42 million to tear it down the following year.
The LVCVA needed the land to expand the Las Vegas Convention Center’s West Hall. It planned to build a new parking lot and shift the footprint of the building to the west. In 2019, after finalizing those plans, it determined that it had ten acres to spare. These were located at the southeast corner of Las Vegas and Elvis Presley Boulevards, facing the Strip.
Derailed by COVID
In February 2020, Steve Hill and Ed Finger – respectively, the CEO and CFO of the LVCVA – struck a $120 million deal with Fischer for the sale of that plot. Hill said:
The growth of the northern part of the Strip is important to us and we see this as a real opportunity because there are a lot of great things going into this area along the resort corridor.
However, the COVID-19 pandemic paralyzed the economy in Las Vegas, forcing the closure of casinos for 78 days. Those circumstances prevented the deal from closing.
Both sides returned to the table in late 2020, hoping to revive the deal. Finally, last October, the LVCVA board received a plan to sell the land to Fischer (via CB Investment SpA) for the same $120 million price the parties initially agreed to.
The terms of the deal give Fischer until January 1, 2031, to start construction. The LVCVA will continue to have access to the land for parking and outdoor convention exhibits in the meantime. If Fischer fails to meet the deadline, the LVCVA retains the option to buy back the plot.
Who is Claudio Fischer?
Fischer’s entrepreneurial career began in the 1970s. A commercial airline pilot at the time, he and his brother Humberto opened a chain of video game stores in their southern Chilean hometown of Coyhaique.
That venture proved successful, but the brothers pivoted in 1985. Their new business was a smolt (young salmon) producer, Salmones Pacífico Sur. That grew into AquaChile, one of the largest salmon farms in the world.
The brothers sold that business in August 2018 for a reported $280 million, and Claudio acquired two Chilean airlines.
Their entry to the gambling space had come two years earlier. In 2016, the Fischers purchased South African company Sun International, which owns the Sun Montecillo Casino Resort near the Chilean capital.
They’ve since grown their gaming portfolio by adding five more casinos in Chile. Another dozen casino acquisitions in Argentina, Colombia, Panama, Peru, and Uruguay are still pending. That deal will merge the Fischers’ company, Sun Dreams, with Enjoy Hotels to create the largest casino resort operator in Latin America.
A Win-Win on the Northern Strip
As crucial as this deal is to Fischer and his growing ambitions as a gaming magnate, it’s equally vital to the LVCVA.
Tax-free bonds funded the LVCVA’s 2015 purchase of the original 25 acres. As a condition of that, the LVCVA is required to reinvest any proceeds from sales of that land into a similarly-financed project.
Conveniently, the LVCVA is planning a two-year, $600 million renovation project on the Convention Center. It aims to bring the quality of its North, Central and South halls on par with that of the West hall. Work will start in March 2023.
The LVCVA will use the proceeds of the sale to Fischer to back the bonds that will finance the renovation project. The deal is expected to close by December 15.