Harveys and Hard Rock to part company | TahoeDailyTribune.com

Harveys and Hard Rock to part company

Sally J. Taylor

Harveys Casino Resorts is stepping out of Las Vegas, at least temporarily, along with its partnership in the operation of the Hard Rock Hotel and Casino.

On Tuesday, Hard Rock Hotel, Inc., owned by Peter A. Morton, agreed to purchase Harveys’ 40 percent interest in the Las Vegas casino hotel for $45 million in cash.

“Our first and foremost responsibility is to look for ways to increase shareholders’ value (from Harveys shares),” Chuck Scharer, Harveys president and chief executive officer, said on Wednesday from his Tahoe office.

“For our company, this is a positive event. This is a great return on our investment for our shareholders.”

The agreement should have no immediate impact for Harveys employees but it “should open up opportunities for employees in all Harveys properties,” Scharer said.

The rock ‘n’ roll-themed Hard Rock Hotel and Casino opened in March, 1995 with Harveys, a minority partner, responsible for property management. It features a 339-room hotel, 28,000 square feet of casino space and one of the world’s largest collections of rock ‘n’ roll memorabilia. A Hard Rock Cafe, with restaurants around the world, adjoins the hotel/casino.

The Lake Tahoe Harveys Casino Resorts receives about $5 million per year from its participation in the Hard Rock venture, according to Scharer.

In a joint statement, the dissolution of the partnership was blamed on different philosophies of management and future goals for the property. A contributing factor is that Harveys is a publicly traded company and the Hard Rock is privately operated.

Until Nevada gaming authorities approve the agreement, Harveys will continue to manage the property.

Completion of the transaction could take four to six months, after which Hard Rock Hotel, Inc. will assume hotel/casino operations.

No personnel changes are anticipated.

Harveys hopes to re-enter the Las Vegas market in the future, Scharer said. Such a venture would, preferably, be as an independent venture but the cost of entering the Las Vegas market could make another partnership more feasible.

“We’d like to maintain a presence in Las Vegas,” he said. “This gives us the opportunity to parlay what we’ve learned about the Las Vegas market with our partners into another venture.”

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