The Lucky Dragon is an Asian inspired resort located near the northern end of the Las Vegas
Strip.
While it was expected to be a huge success, the resort only managed to stay open a little
over a year before discontinuing operations.
What’s up everyone?
My name is Jonah Stahl, and welcome to Abandoned Explained.
In today’s video, we are going to be diving into what exactly caused this resort to fail.
This topic is actually a suggestion I received from one of YOU on one of my latest videos.
If YOU have a location you want me to cover in this series, let me know down in the comments
below!
But anyways, let's get into it!
The Lucky Dragon is an Asian inspired resort located on 2 and a half acres near the northern
end of the Las Vegas Strip.
This portion of the Strip is known for having many vacant properties, and abandoned projects,
so the fate of this resort does not come as a surprise.
In order to give you all a complete picture on how this resort came to be, we first have
to talk about another project in the area, Allure Las Vegas.
Allure Las Vegas is a high rise residential property located right next to where the Lucky
Dragon currently stands.
In 1987, Developer and Casino Owner Andrew Fonfa purchased five acres of land located
on West Sahara near the northern end of the Strip.
His plan was to construct a new casino resort on the property.
At the time, the Excalibur Hotel and Casino was expected to be built in this area, which
potentially could have boosted tourism to this portion of the strip.
Fonfa planned on opening his hotel shortly after the Excalibur opened so he could benefit
from the increase in tourism.
Unfortunately for Fonfa, the Excalibur would end up being built miles away on Tropicana.
As a result, Fonfa would scrap the idea and sit on the property for years to come.
Over a decade later in May of 2002, Fonfas dream of having a hotel on the property would
be revamped.
The Hilton approached Andrew and proposed a deal to develop an eight story, 200 rooms
hotel on his five acres of land.
This hotel would have been known as the Hilton Garden Inn.
Under the proposed deal, Fonfa would own BOTH the Hotel and Casino, while the Hilton would
only manage the Hotel.
This deal played heavily into Fonfa’s favor as he would not only own both operations,
but he would also be able to use the Hilton name.
Construction on the project was expected to cost 50 million dollars, and take around 15
months to complete.
In order to make way for the new resort, two restaurants and a wedding chapel would have
to be torn down.
Before any plans were put into action, Fonfa would end up changing his mind on what he
wanted to do with the property.
After speaking with several City Officials, as well as the then Mayor of Las Vegas, Oscar
Goodman, it was decided the land would be better used for a residential high rise property.
In preparation for the new high rise, Fonfa and US Senator Richard Bryan begun to redevelop
and improve the crime ridden area around the property.
In August of 2004, plans were approved for twin condominium towers that would soar thirty
nine stories high, with each tower having 404 condo units.
Around the same time those plans were approved, Fonfa would begin a Joint Venture with Steve
Fifield, a developer based out of Chicago.
For those of you who don’t know, a joint venture is when two companies come together
to create something, but retain their individual identities.
Fifield would be vital to the project, as he would supply most of the funding.
Construction on the towers was expected to cost nearly 400 million dollars, and start
during the spring of 2005.
Each individual tower would take builders 21 to 23 months to complete, with construction
beginning on the second tower six months after completing the first.
According to Senator Bryan, this venture would be the most significant residential project
to occur since the 1950’s.
In January of 2005, Fifield would announce Allure Towers to the public.
The official groundbreaking ceremony for Allure was held on September 28, 2005.
To clarify, a ground breaking ceremony is a tradition in American Culture that celebrates
the first day of construction.
Construction would reach the 30th floor less than a year later, in August of 2006.
That same month, 90 percent of the condo units in the first tower were sold in presales to
investors, and the contracts had gone “hard”.
This means that the initial deposit put down on the unit is now nonrefundable.
This was quite impressive since while many high rise residential property owner’s were
struggling to sell their units, Allure managed to sell out nearly all their condos in less
than a year.
On November 13th, 2006, Andrew Fonfa held a topping out ceremony for the completion
of the first tower.
Topping out is when the last beam or support is placed atop of a structure.
Essentially, Topping out is when the structure for a building is completed.
At this event, Fonfa announced plans to make the second tower a condo-hotel with around
400 units.
The second tower was planned to have a restaurant, a resort styled spa, a roof house nightclub,
as well as multiple multi million dollar penthouses.
He also stated that the first tower should be completed by September of 2007.
In March of 2007, construction on Allure Tower’s signature crown, which sits atop the high
rise, began.
According to developers, the crown was intended to create a distinct feature on the Las Vegas
Skyline.
It was also at this point that work begun on the resident’s parking garage.
Four months later in July, the first tower was eighty five percent complete, with the
parking garage also nearing completion.
Construction on the tower would be completed on schedule by September of 2007.
At the time of completion, Allure Tower was the tallest Residential High Rise in the Las
Vegas Valley.
By the time residents began to move into the tower in December of 2007, the United States
were starting to undergo another Recession.
As the recession hit, tourism began to drastically fall in the Las Vegas Valley.
Casino Revenues and Home Values plummeted, and unemployment would skyrocket as a result.
Many of units in the first tower would also be returned by buyers who canceled their contracts.
This left Fonfa and Fifield struggling to find new buyers for the remaining and returned
units.
As a result, they decided it would be best to cancel their plans to construct a second
tower.
Four years after the initial impact of the recession, Fonfa decided to take one last
shot at developing his 3 acres of land.
In February of 2012, Fonfa announced his plan to create an Asian Inspired Resort on the
land previously intended for the second Allure Tower.
The Resort was to be called the Lucky Dragon, which would include a hotel tower standing
10 stories tall and holding over 200 rooms, as well as a casino which would be built separate
from the resort.
What made this project so unique the fact that it would be the first Las Vegas Resort
to offer an “authentic Asian lifestyle experience”.
What I mean by this is that the resort intended on providing consumers with an true taste
of Chinese Culture.
According to Fonfa, every detail about the Lucky Dragon was specifically feng shui'd
to prevent any discrepancies with Chinese Traditions.
Ground Breaking on the project began in May of 2015, when subcontractors began pouring
the concrete foundation.
Construction on the resort was to be completed by Penta Building Group, with Grand Canyon
Development Partners overseeing the project to ensure that construction stayed on schedule.
Around the same time construction began, the hotel tower would also be downsized from ten
stories, to nine stories.
This was done in an effort to reduce the cost of construction.
Almost immediately after starting construction, work crews would encounter their first substantial
problem.
During the summer months in Las Vegas, the heat can soar well past 100 degrees during
the day.
This created issues for work crews trying to pour concrete during the day, since the
excessive heat caused the concrete to crack and weaken.
In order to avoid the heat, work crews were forced to pour during the early hours of the
morning.
This created even more problems however due to the heavy equipment causing a lot of noise
for nearby residents and businesses.
To compensate businesses and residents affected by the construction, Fonfa would give out
gift cards.
Following the completion of the lower portion of the resort, work crews would add an additional
floor every week.
This aggressive building strategy would lead to the hotel being topped out by September
of 2015, only four months after construction had begun.
The casino and six story parking garage were still under construction at this point, however
construction was expected to be completed by summer of 2016.
Up till this point, the project was largely funded by federal governments EB-5 program,
which offers foreign investors a chance at permanent residency by investing into U.S
projects.
On November 16, 2015, Andrew Fonfa, along with William Wiedner, who was the former president
of the Las Vegas Sands Casino, and backer of the Lucky Dragon, requested approval for
tax increment financing from the Las Vegas Redevelopment Agency.
For those of you who don’t know, tax increment financing is when a project receives funding
for the amount of property tax revenue the project will bring to the area.
Essentially, the local government provides a project with the amount of money they will
raise in property taxes for funding.
At this point, Fonfa and Wiedner had already secured 60 million dollars in funding from
foreign investors through the EB-5 Program, as well as had a letter of intent from a bank
for up to 30 million dollars.
However, the bank would not release any portion of that loan until Fonfa and Wiedner either
got a “material credit enhancement” like Tax Increment Financing, or raised another
25 million dollars in funding from foreign investors.
Due to the uncertainty of how long it would take to raise 25 million more from foreign
investors, Fonfa and Wiedman were heavily relying on receiving this loan to continue
construction.
Unfortunately for them, the Redevelopment Agency would deny the Lucky Dragon only two
days later on November 18th.
According to a statement released by the Agency, the project was denied funding due to the
Development Agency’s stance on not providing funding to ANY Casino Hotel projects.
This decision would result in nearly 3,600 jobs being lost, since construction would
have to be drastically slowed due to a lack of funding.
In May of 2016, officials from the Lucky Dragon announced that the project was fully financed
due to a 90 million dollar loan issued to Fonfa by Snow Cover Capital.
This loan would help developers to repay their debts on the resort, as well as finish construction.
They also announced that the Resort was 70 percent complete at this point, and that it
would open to the public later that year.
According to Fonfa, the resort would rely mainly on local Asian residents, as well as
Asian tourists from California and China.
At the time, Fonfa predicted 60 percent of the Lucky Dragons customers would be local
asian residents.
This lead to Fonfa and Wiedner taking many precautionary steps to ensure that the Lucky
Dragon provided guests with a truly authentic taste of Chinese Culture.
The Hotel would not contain a fourth floor nor have the number four inside of the hotel.
This is due to a Chinese Superstition about the number four being an unlucky number.
All the signage in the hotel would be written in Mandarin, as the hotel’s clientele would
mainly be Chinese.
The front desk staff at the resort would all be fluent in Mandarin, as well as other Chinese
Dialects.
This was done to ensure that there would not be a language barrier between hotel staff
and guests.
The resort’s casino floor would include many different forms of Asian Gambling such
as Baccarat, Pai Gow, and Sic Bo.
The restaurants inside the resort would mainly feature different types of Asian Cuisine.
Even the granite walkways outside the casino were designed imitate Dragon Scales.
According to Las Vegas Weekly, the Lucky Dragon is one of the most specifically focused resorts
in Las Vegas history.
All of these precautions were taken to ensure that the Lucky Dragon provided guests with
a truly authentic cultural experience.
On November 19, 2016, the Lucky Dragon would have a soft opening, with its official grand
opening still scheduled for December 3rd.
Upon opening, the small resort would employ more the 800 people, and feature 203 hotel
rooms, with 22 suites.
Each hotel room featured a wall mural designed to display the peace and tranquility of ancient
China.
The resort would also contain a 4,500 square foot spa, as well as a 27,000 square foot
casino that included 300 slot machines, as well 38 tables that featured a wide variety
of Chinese Gambling Games.
The Lucky Dragon’s Centerpiece however, is a 1.5 ton dragon chandelier hanging above
the bar.
This chandelier required over 800 people to complete it, and took workers nearly two weeks
to install.
The Lucky Dragon would be the first resort to open on the Las Vegas Strip since the Cosmopolitan
opened in 2010.
The official grand opening of the resort took place on December 3rd, 2016.
The event would include a ribbon cutting ceremony, Chinese Lions and Dragons dancing around,
as well as firecrackers, and aerial fireworks.
At the opening ceremony, the resort would have a large turn out which led many to believe
the resort would be a hit on the Vegas Strip.
These hopes would quickly dwindle, however, as shortly after the grand opening crowds
at the resort would begin to thin out.
Almost immediately after opening, the food court would be closed due to a lack of customers.
In March of 2017, only three months after the grand opening, the Lucky Dragon was hit
with a litigation suit.
Midwest Pro Painting and Penta Building Group claimed in court that they were still owed
money for the work they did on the project.
Midwest Pro Painting claimed that they were owed 793,000 dollars for the work they completed
on the resort, while Penta Building Group claimed they were owed a whopping 7.4 million
dollars for the work they completed.
Both companies would ultimately dismiss their claims, but this was a bad sign for the resort.
Later that same month, the Lucky Dragon would let go more than 100 members of their staff
as a result of customer decline.
Many of those let go included top managers, bar and wait staff.
In an attempt to bring in more customers, the Lucky Dragon would begin to offer nightly
entertainment such as Jazz Saturdays, and Karaoke Monday’s.
They also planned on re opening Dragon’s Alley, otherwise known as the food court.
Unfortunately for developers, this would do little to bring in more customers.
As the months wore on, the Lucky Dragon appeared to be struggling more and more to stay afloat.
In September of 2017, a default notice was filed against the Lucky Dragon less than a
year after opening.
For those of you who don’t know, a default notice is when a developers fail to make payments
on loans issued to them.
While owners of the Lucky Dragon would keep this information from the public, this was
bad news for the resort.
If they could not afford to make payments on their 90 million dollar loan, the resort
could face foreclosure.
In December of 2017, the Las Vegas Review Journal visited the Lucky Dragon on several
occasions to document the struggling resort.
According to reports, the resort’s casino floor and restaurants appeared to be mostly
empty.
The Review Journal would also interview Chinese Gamblers at the Resort, who stated that the
main issue with the resort was not the food or games, but the resorts stingy comp policy.
At one of the nearby resorts SLS, promotions are run weekly for Pai Gow and Barract games.
Players at the SLS casino are able to enter a drawing for 30,000 dollars in a play til
you lose promotion ran every friday since the Lucky Dragon opened its doors.
According to the Gamblers, the Lucky Dragon does not run these type of promotions nearly
as often, nor is the prize as much as it is at SLS.
In a statement released by the General Manager Jordan Seager, the Lucky Dragon’s comps
are in line, if not more fair than many of its competitors.
According to Seager, consumers just needed more time to develop a close relationship
with the resort.
To many, the stingy comps were a sign that the casino was struggling to stay open.
In January of 2018, a little over a year since the resort opened it doors, the Lucky Dragon
announced that it would temporarily discontinue their gaming, and restaurant operations.
According to officials, the decision was made in order for owners to hire new firms to run
operations at the resort.
This move would jeopardize 100’s of casino jobs, as well as 60 million in loans from
foreign investors.
The property stated that while this was a difficult decision, operations would resume
in 6 months.
Later that month, it was revealed to the public that the Lucky Dragon had defaulted on its
loan from Snow Cover Capital.
A notice of foreclosure sale would also be filed with the county at this point.
According to the notice, the Lucky Dragon still owed 48.5 million on their 90 million
dollar loan.
The foreclosure auction was expected to take place on February 6th, 2018.
On the day of the auction, it was announced that the auction would be delayed until February
22nd.
On February 16th, 2018, the Lucky Dragon would enter Chapter 11 Bankruptcy Protection in
order to preserve the jobs of their 98 employees, as well as pay back creditors and provide
certainty to potential buyers.
Lucky Dragon officials stated that it would be in the resorts best interest to be auction
off through bankruptcy court since this would maximize the value of the resort.
A day before the scheduled foreclosure auction, a judge in bankruptcy court ruled that the
resort would not be auctioned off in a foreclosure auction.
The judge stated that the hotel would remain open until the next hearing on March 27th,
were it would be decided what the fate of the resort would be.
Following the hearing in March, it was decided that the resort would be sold through bankruptcy
court.
As of May 2018, there were several buyers interested in purchasing the resort, which
owed over 300,000 dollars in property taxes.
While developers hoped to sell the resort, Ryan Works, an attorney representing many
of the projects EB-5 investors stated that he would much rather see a new investor on
the project.
He feared that if the resort was sold through bankruptcy court, his clients would lose their
ownership stakes in the resort.
Works also stated that if the resort was sold, the EB-5 investors who invested the most money
into the resort, would not receive permanent residency in the US.
As of the recording of this video, the Lucky Dragon is still currently up for sale.
It is unclear what will happen to the resort at this point.
As of August of 2018, the casino and restaurants at the resort are still closed, however the
hotel is still in operation.
Essentially, nothing has changed since the judge ruled in bankruptcy court that the project
would not be auction off in a foreclosure auction.
In my opinion, the resorts failure has a lot to do with how niche the hotel was.
The resort was to focused on having an Asian Consumer base, which lead to many non asian
gamers feeling out of place at here.
Also, once the Lucky Dragon was announced to the public, many casinos on the Strip began
catering to Asian Gamers.
This lead to the Lucky Dragon sharing its primary consumer base with many other casinos
on the strip.
By being forced to share it’s primary consumer base, the Lucky Dragon would not get enough
customers to make a profit, nor make payments on its loan.
This would lead to the resort ultimately filing for Chapter 11 Bankruptcy, as well attempting
to sell the resort all together.
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