Hughes sees Pershing’s $900M stock purchase as a way to complete Summerlin, diversify its portfolio
It took four months for Pershing Square to negotiate a commanding 48 percent stake in Summerlin developer Howard Hughes, which the CEO said will help the real estate conglomerate diversify its business portfolio.
Howard Hughes Holdings CEO David O’Reilly viewed hedge fund Pershing Square’s $900 million investment into the real estate giant on May 2 as a vote of confidence.
With roughly 3,000 acres of the nearly 23,000-acre Summerlin master-planned community remaining to develop, the possibilities abound.
O’Reilly said he hopes that at least 30 of those acres in western Las Vegas will go toward a film studio complex that the company supports. Howard Hughes has been touting the effort, proposed through the film tax credit expansion bill AB238, with a series of Southern Nevada television commercials.
He said two undeveloped areas could house a casino-resort.
Separately, Red Rock Resorts controls a 58-acre site along Flamingo Road and Interstate 215 that is zoned for gaming but the company has not announced plans for developing it since it is close to its flagship Red Rock Resort and the nearly 18-month-old Durango Casino resort.
Last year, Howard Hughes spun off its entertainment division, creating Seaport Entertainment, which includes Las Vegas Ballpark, the Las Vegas Aviators minor league baseball team and the rights to build a casino above the Fashion Show Mall on the Strip.
“It made sense for it to be part of its own [investment] vehicle rather than part of our master-planned community effort,” O’Reilly said.
Two days after the hedge fund headed by billionaire Bill Ackman upped its stake in Howard Hughes to 48 percent, O’Reilly said during a May 7 interview with The Nevada Independent that Pershing will provide “the expert advice to help us invest money into private companies where we can take a controlling stake.”
Pershing and Howard Hughes had been negotiating the terms of the deal for several months.
“Those companies will be different than what we do today,” he said, suggesting some of the businesses will not be real estate ventures, but companies with consistent cash flow that aren’t affected by the ups and downs of the capital markets. “That’s very similar to the investment strategy that Pershing Square has been executing for years.”
Despite the new direction, O’Reilly said Howard Hughes’ core business as a real estate developer would not change. One of the focal points includes Downtown Summerlin, where a Whole Foods marketplace opens Thursday, and multiple development opportunities on the west side of Town Center Drive.
Two commercial office towers are full, and O’Reilly suggested a third office high-rise could be on the drawing board. He said additional apartments and townhouses are also being considered.
“For that entire area, we update that plan about every six months,” O’Reilly said. “We’re always considering what is the best use of that land for both residential use and services to support those residents.”
Fertitta’s top executives still call the shots, as his ex-wife is approved by gaming regulators
Tilman Fertitta is now the U.S. ambassador to Italy, but his longtime top executive told the Gaming Control Board last week that the billionaire won’t be completely out of the picture when it comes to major decisions involving his companies, including businesses in Nevada.
Fertitta, 67, was confirmed for the position at the end of April by the U.S. Senate on an 83-14 vote. Nevada’s two Democratic senators, Catherine Cortez Masto and Jacky Rosen, supported the nomination. In March, Fertitta announced he would step aside from his multibillion-dollar entertainment corporation.
During a 20-minute hearing, Gaming Control Board members unanimously recommended that Paige Farwell Fertitta, Tilman Fertitta’s former wife, be licensed as the president of the Houston-based company that oversees the Golden Nugget resorts in Las Vegas, Laughlin and Lake Tahoe.
However, she told the board that the day-to-day decisions will be handled by her ex-husband’s longtime top lieutenants, Executive Vice President and General Counsel Steven Scheinthal and Chief Financial Officer Richard Liem. She added that she would be available for board meetings and to answer any questions that arise.
“I will rely on those who have been operating the businesses, as it's pretty much status quo,” Paige Farwell Fertitta told the control board. “They do an incredible job while Tilman may be otherwise occupied.”
The Golden Nugget properties employ 2,300 workers, while Nevada restaurants owned by Fertitta Entertainment have more than 500 employees.
Scheinthal, who has been licensed by Nevada for more than 20 years and has been working for Fertitta for more than three decades, said property heads in Nevada will make the day-to-day decisions.
“We'll create a list, we'll call Paige. We'll talk to her if it needs to be on a daily basis for certain things,” he said.
Scheinthal also noted that Tilman Fertitta “won’t be completely out of the picture,” given that 6 p.m. in Italy is 10 a.m. in Houston.
Paige and Tilman Fertitta were married for 30 years before divorcing in 2021, but have maintained a friendly relationship, continuing to share responsibilities toward their mutual philanthropic interests and the ownership of the NBA’s Houston Rockets. It’s expected that Tilman Fertitta will resume control of the company once his ambassadorship ends.
“There's no official agreement, but he's the equity owner,” Scheinthal said. “If he ultimately decides to vote his equity in favor of that, it will happen.”
Resorts World Las Vegas names Castro as CEO, moves Dixon to an advisory position
Alex Dixon’s time as CEO of Resorts World Las Vegas lasted less than six months.
The company’s board quietly announced last week that longtime gaming executive Carlos Castro, who was named the property’s chief operating officer and chief financial officer in February, would take over as president of the 3,600-room Strip resort.
Dixon was moved into a role as a senior adviser to the property’s oversight board to “drive enterprise projects and build strategic partnerships.”
An internal memo from Resorts World Chairman Jim Murren, which was leaked to social media outlets, announced the move. He highlighted Castro’s experience, which included executive roles at MGM Resorts International and Hilton Hotels.
Resorts World sent out a statement confirming the changes when requested by media outlets.
“Carlos has already been making major contributions to the property, attracting top area talent in the areas of compliance, international marketing, and food and beverage,” according to the statement.
Sources with an understanding of Resorts World Las Vegas’ inner workings said the property, the largest operated in the U.S. by Malaysia-based Genting Berhad, required oversight by someone with a more extensive large resort experience.
The move allows Dixon to focus on helping to combine the operations of Resorts World Las Vegas with its properties in New York, including a potential expansion at its Aqueduct Racetrack casino in New York City.
What I'm reading
Century Casino CEOs ‘feel good’ about first quarter — David McKee, CDC Gaming Reports
Co-CEO Peter Hoetzinger said casino play at the Sparks Nugget from Northern Nevada residents increased 6 percent.
As foreign tourists stay away, U.S. could lose $12.5 billion this year, tourism group says — Ceylan Yeğinsu, The New York Times
The prediction comes after months of Trump administration policies that have deterred foreign travelers from visiting because they either feel unwelcome or unsafe.
News, notes and quotes
💵 Cannabis board launches ‘buy legal’ campaign
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🤝 Hornbucke to remain as MGM CEO through 2028
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⚾ A’s televising 15 regular-season games in Las Vegas
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