W Hotel Lasvegas Casino oficially canceled

[*TT*]

Insiders have known this since late last year, now it its official. This kinda sucks.... it owuld have been the centerpiece of the Harmon Corridor redevelopment,
essentially stretching prime property off the strip to the east.

[ QUOTE ]
W Canceled
The big mixed-use casino and condo project, W, has been officially canceled. This is the third Harmon Avenue project to be scuttled in the past two years, following the cancelations of Las Ramblas and a build-out of the Hard Rock (though a second Hard Rock project has been announced by its new owners). The Edge Group, which was behind W, is said to be seeking a buyer for 47 acres of land it purchased for $5- to $10-million per acre, which could now draw as much as $12- to $20-million per, depending on how it's sold.

[/ QUOTE ]

[Clarkmeister]

Yet another example that the land is overvalued. It's easier to find a sucker to pay you 15m an acre than it is to try and actualy get an ROI and monetize through development. Not one single person who has a basis north of $10m/acre has actually built anything. The closest anyone's come is strategic acquisitions by Harrah's and Boyd, but it's apples and oranges.

[*TT*]

[ QUOTE ]
Yet another example that the land is overvalued. It's easier to find a sucker to pay you 15m an acre than it is to try and actualy get an ROI and monetize through development. Not one single person who has a basis north of $10m/acre has actually built anything. The closest anyone's come is strategic acquisitions by Harrah's and Boyd, but it's apples and oranges.

[/ QUOTE ]
Word on the street (my little bird at W corporate) told me that they heard the plan was not canceled by Edge Group - it was a Starwood decision. Problem is its hard to verify because Steve Haeyer was let go of his top position at Starwood last month while receiving a 70 mil golden parachute. Nobody seems to know if he was asked to resign because of W LV, and my friends at W haven't been told why oficially, they just hear rumors like we do.

[Clarkmeister]

They cancelled it because it's impossible to get a return. Especially when compared to flipping the land to some other sucker for a huge premium relative to your orignal investment.

[pacecar86]

TT - mebbe it had something to do with their pre-purchase pricing at about 2K/sq ft.

[cardcounter0]

[ QUOTE ]
Yet another example that the land is overvalued. It's easier to find a sucker to pay you 15m an acre than it is to try and actualy get an ROI and monetize through development. Not one single person who has a basis north of $10m/acre has actually built anything. The closest anyone's come is strategic acquisitions by Harrah's and Boyd, but it's apples and oranges.

[/ QUOTE ]
Yeah, what could you build that is going to double a multi-million dollar investment in a couple of years? What patsy is finally going to get stuck holding Nevada desert?

[DesertCat]

[ QUOTE ]
Problem is its hard to verify because Steve Haeyer was let go of his top position at Starwood last month while receiving a 70 mil golden parachute. Nobody seems to know if he was asked to resign because of W LV, and my friends at W haven't been told why oficially, they just hear rumors like we do.

[/ QUOTE ]

It's been widely reported Heyer was forced to resign because he's a jerk and a harrasser.

[ QUOTE ]

Starwood CEO's Ouster Followed
Battle with Board Over His Conduct
By PETER SANDERS and JOANN S. LUBLIN
April 7, 2007; Page A1

The abrupt departure of Steven J. Heyer from Starwood Hotels & Resorts Worldwide Inc. followed a confrontation with the company's board ignited by an anonymous letter accusing him of personal misconduct, according to people familiar with the situation.

Mr. Heyer -- who denies engaging in any impropriety -- was unexpectedly ousted as chief executive officer this past week, and in the process opted to forfeit an estimated $35 million of severance compensation.

Starwood Chairman and interim CEO Bruce Duncan has declined to comment on the specific reasons behind Mr. Heyer's departure. On Friday, a Starwood spokeswoman reiterated the company's earlier statement that the board had lost confidence in Mr. Heyer's leadership, but added that "his style made some employees uncomfortable."

Mr. Heyer, who had been president and chief operating officer of Coca-Cola Co. before taking over at Starwood in 2004, has long been known for brusque, often difficult relations with employees. After investigating claims made in the anonymous letter, sent to directors about two months ago, the board pressed Mr. Heyer to explain the large number of emails and text messages to and from female employees on a variety of topics outside normal working hours. They also questioned him about his hiring and promotion practices.

In an interview, the 54-year-old Mr. Heyer characterized the situation as the ugly fallout from extensive strategic and structural changes he made while "transforming [Starwood] from a real-estate hotel company to a branding company." He says he doesn't know who wrote or sent the letter, but believes it could have been someone passed over for a promotion.

"For an anonymous letter to basically destroy a reputation would be sinful," Mr. Heyer said. While acknowledging he can be a difficult boss, he said the chain of events set off by the letter represented the "straw that broke the camel's back" in his increasingly poor relationship with the company.

He left without his severance package because "life is too short" to mount a contested defense against the allegations. "I'm burned out," he added. "I wanted to walk away from this job with my head held high."

Mr. Heyer's departure comes at a time of prosperity in the lodging industry. When he arrived at Starwood, its shares were trading around $47 per share. On the Friday before he resigned, they sold for about $64 apiece. The company, like rivals Marriott International Inc. and Hilton Hotels Corp., has jacked up room rates as robust consumer and business travel have made supplies tight. Starwood's earnings rose during Mr. Heyer's tenure, owing in part to a large transaction of hotel real estate announced in November 2005. In 2006, Starwood reported net income of $1.04 billion on $5.97 billion of revenue. The prior year, Starwood reported net income of $422 million on similar sales.

The board's quick move to seek Mr. Heyer's ouster may be the culmination of simmering tensions over his leadership style, which have built up over time despite satisfaction with the company's performance and Mr. Heyer's strategy. But it also reflects the growing desire by corporate boards to act decisively when presented with evidence of possible executive misconduct.

...

The letter received by board members in mid-February contained about 10 specific instances that allegedly showed Mr. Heyer had created a hostile work environment since arriving at Starwood in October 2004, according to a person familiar the details of the situation. It alleged, for example, that on at least one occasion Mr. Heyer made inappropriate physical contact with a female employee outside a restaurant bathroom, this person said. Mr. Heyer denied to the board and in an interview Friday that this incident ever occurred.

Starwood's board hired an outside law firm, Davis Polk & Wardwell, to investigate the letter's allegations, people familiar with the matter say. In the course of the ensuing probe, Mr. Heyer's emails and text messages were scrutinized and found to include an "overwhelming body of evidence" that would have given the board reason to fire him for cause, according to the person familiar with the matter. Under his employment contract, directors could have fired him for cause for five different reasons, among them "gross negligence or willful misconduct."

The investigation uncovered emails and text messages between Mr. Heyer, who is married, and a young, unmarried female employee that were sent at times outside normal business hours and were of a suggestive nature. "There were several provocative conversations, and there was no question that the conduct was inappropriate for a CEO," this person said.

Mr. Heyer said allegations of sexual advances made toward younger female employees "are absolutely not true, they never happened." In regard to inappropriate email and text messages, Mr. Heyer said, "To the best of my knowledge I didn't send any, and I don't remember receiving any." He said the board didn't specifically question him about the content of his messages, but rather about the volume of notes he sent and received.

This same female employee last summer accompanied Mr. Heyer and five other Starwood employees on the corporate jet to a board meeting in Greece. Mr. Heyer said that employee was part of his "Generation Next" program, which he created to cultivate younger homegrown managers in what he says is a "generation-skipping exercise" authorized by the company. This person was part of that project, and Mr. Heyer said he often took employees on trips aboard the jet to do work while flying. He cited a recent trip on which Starwood's general counsel accompanied him to Spain simply to do work on the flight there and back. "We got work done and we thought it would be fun."

People familiar with the situation say Mr. Heyer was also questioned by the board about his method of promoting employees and whether he fostered a culture of favoritism, He says he responded to this question by noting that all promotions were done through a process and he wasn't on the promotion committee.

Nonetheless, the board determined that the women who had exchanged email and text message with Mr. Heyer were essentially "unwilling victims" who felt pressured to curry favor with the CEO, according to a person with knowledge of the matter.

Mr. Heyer's departure capped a stormy two-and-a-half year run at the top of Starwood. After arriving from Coke -- where he had been passed over for the top job -- Mr. Heyer was hired by Starwood at a time when then-CEO Barry Sternlicht was looking for someone to replace him.

But Mr. Sternlicht and Starwood directors were aware of Mr. Heyer's reputation for a rough management style. Starwood directors received an extensive briefing about Mr. Heyer's difficult personality before they chose him as CEO.

"They went into this with eyes open," says one person familiar with his hiring process. They learned in "nauseous detail" about the former Coke president's frequent clashes with colleagues there, this person says. The hotel chain's due diligence included conversations with Coke board members who told Starwood recruiters that Mr. Heyer didn't get the corner office at the beverage giant in part because he was so difficult to work with.

But Mr. Heyer impressed the Starwood board with his marketing background and his plans for the company's hotel brands, which include Westin, Sheraton, St. Regis and W. Upon his arrival, he clashed with Mr. Sternlicht, who had moved to the executive chairman seat. In May 2005, Mr. Sternlicht abruptly left Starwood and his seat on the board. Over the next year and a half, Mr. Heyer announced two new hotel brands, acquired the Le Meridien brand, sold a large chunk of Starwood's real-estate portfolio and announced a variety of branding and marketing promotions with a variety of consumer-product and service firms.

In recent months, the Starwood board began to discuss its misgivings about Mr. Heyer. Among its biggest gripes: Mr. Heyer spent little time at headquarters in White Plains, instead commuting from his home in Atlanta. Under Mr. Heyer's contract, Starwood provided an Atlanta area office, but the CEO agreed to spend "at least a majority" of his workdays over a two-month period either at headquarters or on company business trips.

[/ QUOTE ]

[*TT*]

[ QUOTE ]
TT - mebbe it had something to do with their pre-purchase pricing at about 2K/sq ft.

[/ QUOTE ]

W Hotel/Starwood didnt purchase the land, W Hotel is a licensed brand. The Edge Group was the developer.

[*TT*]

[ QUOTE ]
[ QUOTE ]
Problem is its hard to verify because Steve Haeyer was let go of his top position at Starwood last month while receiving a 70 mil golden parachute. Nobody seems to know if he was asked to resign because of W LV, and my friends at W haven't been told why oficially, they just hear rumors like we do.

[/ QUOTE ]

It's been widely reported Heyer was forced to resign because he's a jerk and a harrasser.

[/ QUOTE ]

Heyer's "management style" grated with everyone, but he also lead the company through a very turbulent time sucessfully. The sexual harassment charge discussed within that article actually took place last year, everyone in management just had to enter sensitivity training to combat the charges. But the people I spoke with werent sure if this was the real reason why Heyer was asked to resign, there was a lot of unanswered questions about the LV deal as well from what I was told.

Thanks for showing the article, I completely forgot that heyer opted out of his severance package, I misstated that earlier. Only difference is that I was told it was 70 mil - but either way you know you really f'ed up when you are forced to resign and decline your severance.

[Cactus Jack]

[ QUOTE ]
you know you really f'ed up when you are forced to resign and decline your severance.

[/ QUOTE ]

And you f'ed up in some sort of legal way, because you don't "decline" your 35mil severance. It's the company that "denies" it and you gotta accept it. Otherwise, see ya in court.

Maybe someone figured out that having a Strip property that's not on the Strip doesn't work the same as when it's ON the Strip. Not having an entrance on the Strip can make the difference between success and failure. Ask the Aladdin.

For some reason, people think that just building something in Vegas ensures success. Guess not.