Ritz-Carlton Exits (Woebegone) Lake Las Vegas « Manhattan Distressed Properties

Ritz-Carlton Exits (Woebegone) Lake Las Vegas

: Bloomberg; The Ritz looms over this photo of Lake Las Vegas taken in 2004 when demand for homes was booming.

Here’s a first: A Ritz-Carlton is closing.

On the shores of woebegone Lake Las Vegas, Ritz-Carlton Hotel Co. LLC and the hotels owner, lender Deutsche Bank AG, this week set May 2 as the 349-room hotels last day of operations. Continuing to run the hotel, which opened in 2003, was no longer economically viable, said a Deutsche Bank spokesman.

The hotels closure is the latest stumble for the ill-fated Lake Las Vegas development, built around a manmade lake roughly 15 miles east of the Las Vegas Strip. Developer Transcontinental Corp., led by Ron Boeddeker and Texas tycoons Sid and Lee Bass, began developing the 3,600-acre project in the 1990s to include thousands of upscale homes, a small casino, three golf courses and two resorts. The strategy was to design a resort community mostly for permanent residents rather than visitors. Singer Celine Dion bought a house there.

But, the recession hit previously booming Las Vegas hard, and Transcontinental defaulted on a $540 million loan from lenders led by Credit Suisse. The developer sought Chapter 11 bankruptcy protection for the project last year.

Separately, the Ritz-Carlton defaulted last year on its $103 million loan and went through a short stint in Chapter 11 before Deutsche Bank was allowed to foreclose on it.

Ritz-Carlton, a division of Marriott International Inc., operates 73 Ritzes but owns none. The Lake Las Vegas resort is the first Ritz to close, though a few Ritz-Carlton projects are stalled in construction. This was a decision by the owner (Deutsche Bank), and we reluctantly agreed to it, Ritz-Carlton spokeswoman Vivian Deuschl said.

The Ritz at Lake Las Vegas is a sprawling resort, with a wing of rooms that extends over part of the lake on concrete pillars. It includes a spa, a wedding chapel, two restaurants and boat access to the lake. Ritz-Carlton declined to divulge the hotels occupancy or average rate. But online rates for a one-night, midweek stay at the hotel later this month ranged from $219 to $449.