What Caused the Lucky Dragon to Close only a Year after Opening?

What Caused the Lucky Dragon to Close only a Year after Opening?

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. If you have any suggestions for future videos,
let me know down in the comments below! This video was actually a suggestion I received
from one you! So if you have a topic you would like me to
cover let me know down below. If you enjoyed this video, be sure to leave
a like down below so I know you enjoyed! Also be sure to hit that subscribe button
as well as the bell icon, so you can stay up to date on my latest content! Thank you all for watching and I’ll see
you next time, Peace!

Related Posts

Thule  Hitch Bike Racks Review – 2011 Jeep Grand Cherokee – etrailer.com

100 Replies to “What Caused the Lucky Dragon to Close only a Year after Opening?”

  1. UPDATE: The Lucky Dragon will close all their facilities on October 2nd, 2018. Owners of the resort are currently examining potential buyers.

    Wow did this video get a lot of views! Thank you everyone for watching! This truly does mean the world to me! First off, I apologize for the extremely loud narration. I just bought a new mic to record these videos, and I need to adjust the settings more. The gain was way too high, which is the reason the audio was so loud and distorted. I will re adjust the gain to avoid this issue in the future! Secondly for future videos, I will be speaking a lot slower since some of you have mentioned the pace was too quick. I’m also taking public speaking course so hopefully that will help πŸ™‚ This is only my third time making a documentary style video, so the videos will only improve from here! Thank you all so much for watching and commenting! This is all so surreal!

  2. Sold for $36,000,000 meaning original investors lost a fortune, 10 cents on the dollar. https://www.casino.org/news/failed-lucky-dragon-casino-las-vegas-sold-for-36-million

  3. I like this Hotel & Casino it’s beautiful with a great theme, that brings Asia to Las Vegas. I think where they failed was marketing and advertising they needed to realize if they were not getting the exact consumer they were initially going for which were Asian people then they needed to open there doors to everyone at the end of the day it’s about business and making profits. I’m Latin and I love Asian culture I hope they don’t change the name or look I will be booking here soon since the new owners were mentioned to have reopened this Hotel in May of 2019. I don’t think they should of changed there casino into a convention center. If anything they could of built one behind the hotel and casino and also a nice pool and activities area and a show building for live shows.

  4. Even with the volume down as far as I can get it and still be able to hear, It is still to dam loud. How does somebody pull off a feat like that?

  5. First video I've every watched on YouTube and got anxiety lol. I saw his comment though. Good luck on future vids. Content was great.

  6. Dude, next time you do a video, please don't place the microphone inside your mouth when you are speaking.
    Thank you.

  7. That was really stupid in building a business that was only interested in one ethnic group. I am not a business major nor I have ran a business, but if I was an employee of the Lucky Dragon I could have saved the Lucky Dragon by telling the owners that we are living in a global world and that businesses want everybody's money not just one ethnic group's money. Most people with degrees and money lack common sense. I guess they thought that China was next door and they forgot that the Vegas of the Fart East is in Macao which is not that far from China. I could have save them a lot of money by rendering a report about what I just mentioned here without having a degree in business at all, but I have plenty of common sense.

  8. Unlike other Asians, who tend to be utterly chill, today's Chinese are NOTORIOUSLY RUDE & PUSHY (just ask the Thais), so much so that other Asians dislike having to put-up with them, while loving their money. And AmeriKKKan "whites" hate everyone who isn't them, so, what made the Un-Lucky Dragon's masterminds think they would attract a large enough pool of gamblers? A word-to-the-wise to future entrepreneurs who think that catering to Mainland Chinese will result in greater profits ~ the more Mainlanders you attract the more others will stay away. This rule, generally, does NOT apply to Taiwanese or Singapore Chinese who are generally very nice & cool.

  9. Asians are cheap and always wanting EVERYTHING for nothing. No wonder it didn't last long. Never bank on the Asians. They will promise you things but, NEVER DELIVER WANT THEY PROMISED.

  10. Voice gets louder and louder as it goes on, thought something was wrong with my tv volume. Sh$! Got intense in a hurry lol

    Not saying the narrator is on drugs, but it does seem like lowkey he's doing a line of coke then his voice gets louder.

    Chill bro, its just a hotel. I would hate to see a video of his commentary on an actual catastrophe like 9/11 or something. He would go crazy!

  11. The Lucky Dragon was a massive exercise in poor judgment. Las Vegas should concentrate on being Las Vegas, an American city. Trying to pander to Chinese tourists just served to embarrass everyone, including the Chinese.

  12. The problem is ASIAN STYLE is a negative not a plus. I think the the new construction on the old Stardust site will be Asian themed, it also will fail. You can't mix Asian and gambling it's not going h to work, bad juju

  13. I personally take my business elsewhere if the casino is stingy with comping me and then I would tell all my friends not to go to that casino.


  15. Dude, you're given TONS of solid feedback each video, and you co continually ignore it.

    I want so much to like this channel, but I really can't.

  16. I lived in Vegas for 6 years. I remember when they were put in the Lucky Dragon up. I thought it was going to be cool. Shows what I know.

  17. Vegas Dr & Torrey Pines. Meet me at 3pm so I can put a whooping on you! I'll be damned if I'm gonna sit here and get yelled at by a bitch ass Youtuber

  18. I know the like and dislike ratio is still acting normal, but why is it that the dislike ratio is building? Is he not showing us facts, is it because he’s talking too loud, I don’t know. Lol

    Edit: Nevermind, now i understand why.

  19. Omg calm down haha, your finna wake my neighbors up lower your damn voice!πŸ˜‚πŸ˜‚πŸ˜‚ stop screaming bruh.

  20. Bwhahaha I just rewatched the beginning to see if I was crazy, like he is progressively getting madder and louder πŸ˜‚πŸ€£πŸ˜‚πŸ€£πŸ˜‚

  21. Unfortunately the plans probably did not get much outside thought in what would work and what would not. The competition never plays to loose. The owners was complete ego motivated and blind to speculations potential outcome. Sadly

  22. πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŽ πŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒžπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒπŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸŒ„πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’πŸ’

  23. Our company's headquarters is in Las Vegas we just bought that building we're turning into a convention venue and we got it for pennies on the dollar

  24. I agree that who ever is narrating this video needs to find a different line of work, without a mouth. Yelling and screaming into the microphone is wearing on me and others who click on this video.

  25. Sad as I feel like the Lucky Dragon added something different for consumers to try out. It's sad that others didn't share this view.

  26. Yeah, in the meantime low-end Circus Circus and high-end Sands Venetian are overflowing with Asian visitors… So sad, because Lucky Dragon is very attractive even while closed. Once the current ridiculous economic war with China is halted, either by election or mutual agreement this location as well as the Gentings Resort World will be a delight for all visitors.

  27. Please tone down your voice and slow up. It’s not a race! The content was good but your voice is really obnoxious πŸ₯΅

  28. When I was there in Dec 2016, I felt like I didn't belong when I walked in. It was a beautiful place, no doubt, but it was so overtly "Asian", that I honestly walked in, and felt like I should turn around and leave, cause I wasn't Chinese. I wandered the Casino for 10min, didn't play anything, and left. I did LOVE the floating water sphere out front tho. Very, very cool.

  29. Good report but large parts of the report were "yelled' out. It did not build tension but instead was annoying.

  30. Public investment= govt. takes your money, and loans it out to people you don’t know at a level of risk you have not approved.

    No no no. Private enterprise builds with its own cash, at its own risk. You in govt. get to tax a successful result.

  31. I didn't care that much for the perceived "yelling" that people seemed to have heard. I just wanted to know the facts. Even though I live here in Las Vegas, even I knew that the intense focus on Asian revenue was entirely too limited. If this failed, I shudder to think what would happen to the Resorts World multi-billion dollar project next door to the Fashion Show Mall. Here's hoping they'll learn SOMETHING from Lucky Dragon.

Leave a Reply

Your email address will not be published. Required fields are marked *