Friday, December 15, 2017

‘It’s been a great journey’

QUESTIONS & ANSWERS | SCOTT JOHNSON

It has been 61 years since the Moulin Rouge Hotel & Casino opened its doors to the public on Las Vegas’ Historic Westside. Now, following a May 24 groundbreaking ceremony, a “new” Moulin Rouge is rising on the same property at 900 West Bonanza Road — transforming a site now dotted by boarded-up buildings and backed by a huge expanse of open desert.

Developer Scott Johnson

Developer Scott Johnson, president of Moulin Rouge Holdings LLC, is taking charge of this incredible redevelopment project — and he is poised to succeed where others have fallen short. He sat down for an exclusive conversation with Las Vegas Black Image Magazine, and the result was a spirited, informative discussion about a historic moment in our city.

Tell us a little bit about yourself

I grew up on a farm in Carthage, Arkansas — and I used to spend my summers in Las Vegas, working with my uncles. I attended high school and graduated from the University of Arkansas with a degree in construction management. I moved permanently after I graduated from college, and started working for Louis Richardson, owner of Richardson Construction. I worked there for 23 years, developing major projects.

What led you to to buy the Historic Moulin Rouge land and to redevelop it on its original site in the Historic West Las Vegas?

It’s been a great journey. While at Richardson Construction, we built a number of projects — Fitzgerald Elementary School, Lorenzi Park, Sunset Park, a lot of fire stations, Doolittle Community Center; Pearson Community Center, the West Las Vegas Library Theatre — that generated the capital needed to start my own projects.

Now, I am interested in legacy construction projects — and I had initially approached the previous group that was trying to buy the Moulin Rouge land, about a crushing construction operation. The crushing operation is a crushing process of debris and asphalt that lies on the Moulin Rouge property site; it can be sold and used as recycled construction material that could be used to generate needed revenue to pay the property off. The previous group’s deal expired on January 22, so I had to lease the Moulin Rouge property site to do my construction crushing operation that was welcomed by the bankruptcy court. So, the receiver appointed by the bankruptcy court wanted to keep me on the property, because I came in with a cleanup crew and got the property looking a lot better. He told me that he would put a package together for me in case I wanted to consider buying the property. I had no initial aspiration to buy the property or to be involved with a casino or to build a casino. All I wanted to do at that time was to travel and go fishing. But, my mother convinced me to go for it because she said, “Somebody has to do it, if you don’t do it. Why not?”

What kind of financing are you securing for the redevelopment of the New Moulin Rouge?

I have thus far self-financed. I have been paying for the lease of the property and the required 24 hour security on the property site for a while. I have included other private investors; hedge funding; and an optional EB5 contributor if needed. The first phase for the redevelopment is to gain title of the Moulin Rouge land site, which is about $7.5 million by due June 10, 2016. People don’t understand how valuable the land site is because when you acquire land that once had a casino on it — you also get the gaming license [including some vetting by the gaming commission for the new owners]. The hardest part was getting the money to put into an escrow account. When you have an unrestricted gaming license off the Las Vegas Strip, the property is worth $3.8 or $4.3 million. When you look at the entire 16 acres that cost $65 million to $70 million — people don’t realize it’s easy to get the money for the property. The key part is being able to pay it back.

What is the estimated total cost for the new Moulin Rouge Casino development when completed and ready for patrons?

It will cost around $500 million. That includes a mini arena and other items that was in the original plans that were already pre-approved by the City of Las Vegas. The first phase of the project will include the development of the New Moulin Rouge casino, restaurants and a lodge that will cost around $110 million. We estimate that the new Moulin Rouge Lodge & Casino will be open for business in 2019.

Will you operate the casino area of the New Moulin Rouge?

I haven’t totally decided. But I have been in conversations with other independent casino operators that might run and operate the casino for the property.

What have you noticed about the redevelopment of the entire Historic Westside coming and what do you see coming?

Well, there’s the recent purchase of the Town Tavern Casino on Jackson Avenue — currently named Tokyo Casino — by a Japanese man who has also bought up the land where the historic Cove Hotel used to be. He has plans to build … other new Asian businesses will soon be opening up on Jackson Avenue, and the area will soon be the new Chinatown.

The deals have already been done a long time ago, and city representatives have been bringing investors into the Westside for a long time now to develop — because the land is cheaper in the Historic West Las Vegas area.

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