Harveys merger in final stage
These are bittersweet days for Harveys Resort Hotel & Casino executive Kirk Ledbetter. The 39-year-old grandson of founders Harvey and Llewellyn Gross has been a part of the “family business” for more than 20 years – starting in the maintenance garage when he was a 16-year-old high school student.
“The goal for me then then was to work my way up to the glamour job at the casino; valet parking,” said Ledbetter, smiling. “Those were the good old days. I’ve seen a lot since then.”
Indeed, the kid from the maintenance garage has worked his way up over the years, and is currently the Director of Community Services and Government Affairs at Harveys and Director of the Harveys Board of Directors.
But all that will change soon – possibly before the end of this year. A recent merger agreement with Colony Capital, an investment corporation based in Los Angeles, will effectively end the family involvement with Harveys – which began as a one-room log cabin near Stateline Avenue in 1944.
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The Gross and Ledbetter families have been intricately involved in the operation of Harveys ever since. William Ledbetter, Llewellyn and Harvey Gross’ son-in-law and Kirk’s father, is secretary and vice chairman of the board. And Jessica Ledbetter, Kirk’s sister, has served in several capacities at Harveys and is now on the board of directors.
The $420 million merger, which was announced in early February and approved by Harveys shareholders in May, will be official when Colony Capital gets approval for gaming licenses in Nevada and Colorado, possibly as early as December. Harveys’ four casino/hotel operations will then become privately held affiliates of the large investment corporation.
Harveys also has hotel/casino interests in Central City, Colo.; Las Vegas and Council Bluffs, Iowa; the latter which has recently granted a gaming license to Colony Capital.
The bulk of Harveys’ management is expected to continue with the company, although the descendants of Harvey and Llewellyn Gross will move on to other ventures.
“It’s true that Harveys will lose family ownership,” Kirk Ledbetter said. “A sort of nameless, faceless corporation is going to take over. But Ford Motor Company has gone on without Henry Ford. The ownership is changing, but that doesn’t mean that this company’s commitment to the community is going to change.”
Ledbetter’s grandparents were true pioneers of the Tahoe Basin, and both held a philosophy that it was important to contribute as much as they took. The Grosses were famous for their philanthropic efforts; sponsoring scholarships, supporting schools, providing job opportunities for disabled and handicapped veterans, and contributing to countless community organizations.
“It was a true team effort,” Ledbetter said of his grandparents. “I don’t think they could have succeeded without each other’s support.”
And that legacy lives today, but not only at Harveys. The other three major casinos are also very active in the community, thanks in large part to the pioneering efforts of Harvey and Llewellyn Gross.
The merger will have no effect on the current remodeling plans.
According to Ledbetter, the biggest question since the merger was announced is: “Is Harveys going to keep its name?”
“At this point, they (Colony Capital) certainly have the option to keep the name,” Ledbetter said. “In my opinion it would be in their best interests to do so. But once they take over, they can call it anything they want.”
It should be noted, however, that when the Starwood Corporation bought Caesars, they opted to keep the name intact.
Why is Harveys changing hands?
“We took a look at our situation, being here in the basin with all the major access roads being blocked at one time or another during the winter. When you’re a public company you have to think about the shareholders first. The merger was the best thing for the long-term survival of the company.
“I don’t see them (Colony Capital) as a company that will come in and clean house,” Ledbetter said. “They want to get into the casino business, but they don’t have their own casino people. There won’t be a lot of changes from that perspective.”
But even though Ledbetter will be leaving soon (“Unless they come up with some amazing offer for me to stay,”) he refuses to leave Lake Tahoe.
“I love it here,” he said. “I’ve grown up here and I can’t see myself anywhere else.”
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