Elvis Plans Could Be On Way Out Door

An investment group that had once envisioned building an Elvis-themed resort in Las Vegas on 18 acres across from CityCenter may be on the verge of losing the land. FX Real Estate and Entertainment said Monday it has defaulted on a $475 million loan from Credit Suisse and does not expect to be able to repay or refinance it by the time it matures on Tuesday, a filing with the Securities and Exchange Commission shows.

"Unless the loan is repaid, refinanced or extended at maturity, the lenders may at any time exercise their remedies under the Amended and Restated Credit Agreements, which include foreclosing on the Las Vegas properties," the filing read.

A $14.9 million payment made July 6 already extended the maturity date six months.

The company received a waiver on Nov. 25 when falling land values pushed the property into noncompliance of its debt-to-loan value ratio covenants, but the company failed to make the $26 million compliance payment by Dec. 19.

The land, which stretches from the Harley-Davidson Café on the corner of Harmon Avenue to the Smith & Wollensky building just north of the MGM Grand, is currently generating revenues for FX mainly through rental income. The Hawaiian Marketplace, Travelodge and several shops also occupy the land.

The land was acquired through six separate transactions totaling $221.3 million, or $12.5 million per acre, between March 1998 and May 2005.

FX, however, wrote off $10.7 million in development costs in the third quarter after abandoning plans for the Elvis-themed resort in September due to the "dislocation and turbulence in the capital markets."

The group posted $482,000 in revenues in the third quarter ended Sept. 30 against operating costs of $16.8 million driving it to a $33.7 million loss.

FX has posted a $112.7 million loss the first nine months of the year.

The possible loss of the land comes after an agreement for FX to acquire an 85 percent interest in Elvis Presley Enterprises fell through.

In a Nov. 5 filing with the Securities and Exchange Commission, FX said the acquisition agreement was canceled when a go-private deal for CKX Inc., which licenses the rights to the singer, collapsed.

FX is a partnership between Robert F.X. Sillerman, whose publicly traded company CKX, Inc. owns the name and image of Elvis Presley and the operation of Graceland, hotel developer Paul Kanavos and residential and commercial developer Brett Torino.

Attempts to reach FX representatives in New York on Tuesday failed.

FX, which is publicly traded on the Nasdaq National Market, has had its stock price fall from an offering-day high of $10.02 per share Jan. 10 to 13 cents per share at Tuesday's close.
Source: Las Vegas Review Journal / Updated: Dec 31, 2008 
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Reactions

MarkJ (profilecontact) wrote on Jan 12, 2009report abuse
There's no doubt the area around Graceland is rundown and needs a facelift badly. I was surprised that the museums weren't more 21st centruty operated than it was. From what I noticed back in 07 when I was there was that outside of the car museum their facilities they got now looked outdated and lacked appeal. Plus it seemed crowded. They need to space it out more and have more food choices. It'll be interesting to see what all they bring in and add to their existing setup to make it more fan friendly and appealing.
elvislives72 (profilecontact) wrote on Jan 7, 2009report abuse
No need to panic anymore. Sillerman just announced today in the Memphis Commercial Appeal that the merger falling through with 19X will not affect their plans for Graceland at all and that they're hoping to get it going this year. They've been buying up over a 100 acres of land since 2006. He says the recession didn't hurt the Elvis business at all even when gas prices were at $4.00 a gallon. He bragged about how good CKX did during the hard times of 08 and how EPE played a significant role in that.
elvislives72 (profilecontact) wrote on Jan 6, 2009report abuse
Steve your last sentence says it all. It's the fear that the young hip hop generation of new fans wanting remixes may run off the grandmas and grandpas and take over Graceland. I see it now. Well get used to it because the majority of people touring Graceland today are anywhere from 35 and younger. From teenagers and young adults on their own and not by default. Elvis is appealing and always will be. It's passed down from generation to generation. Like it or not it's the new crowd that has re-ignited the fire lately with the remixes and success on the charts. Not the old timers. So accept reality and accept that Elvis is getting younger and not aging with his original fanbase. Besides if Elvis wasn't wasn't getting younger then Sillerman wouldn't be planning to spend a fortune to go all hi-tech with him for these young ones and to bring in even more new young fans.
Steve V (profilecontact) wrote on Jan 6, 2009report abuse
The fan base is getting younger by default. That stands to reason as older fans die off or just start making other things in life a priority. But bigger? No way. it will never reach the masses it had in its heyday with us older fans.
elvislives72 (profilecontact) wrote on Jan 3, 2009report abuse
The fan base in general is getting younger and bigger while Elvis' generation is dying off. The average visitor to Graceland is under the age of 35. I wouldn't call that old. The people buying the mainstream releases aren't the hard core fans as once was. It's the newer fans starting to discover his music.
EspenK (profilecontact) wrote on Jan 1, 2009report abuse
I kinda agree with everyone here: Yes the fanbase is getting old and the challenge of letting new, young people discover Elvis should be taken seriously. However I agree with Brian as well, I believe in Sillermans plans. The Graceland area is in serious need of a facelift and modernization. When I was there in august 07 the area was in a sad shape, especially Heartbreak Hotel was almost about to fall apart. You can't show an area like this to new fans, this is not a good display of the king.
Brian Quinn (profilecontact) wrote on Jan 1, 2009report abuse
Graceland will get more popular than it has ever been if the Sillerman plans go ahead. At present the annual visitor figure is around 500,000 but the plans are to develop the Graceland area and it is then anricipated that the annual figure will be over 1 million. Likewise, the CityCenter Cirque Du Soleil 'Elvis' Show opens as a permanent attraction in Las Vegas in December 2009 and will then tour the world until around 2015 including China.

Elvis will continue to gain more fans each year as he has done since 1956 and his Annual Dollar Income will improve drastically to the stage that he could again become the highest earning entertainer dead or alive.
Steve V (profilecontact) wrote on Jan 1, 2009report abuse
Even before the economic downturn of 2008, visitation at Graceland was declining over several years. Lets face it the fan base is getting old and there will be less & less 'original' fans returning to Memphis. Sure Elvis makes new fans every year but will they be as serious as fans of old and want to visit & revisit Memphis which doesnt offer that much beyond Sun studios & Graceland. I think not. We must be realistic. The Graceland heyday is winding down just as the CD releases are. It will stay afloat but not be as important to newer fans as it once was to older fans.
elvislives72 (profilecontact) wrote on Jan 1, 2009report abuse
Mofo22, Sillerman cannot sell EPE or Elvis' naming rights. It's part of the deal he signed. He's stuck with what he invested $115 million into when he signed that deal with Lisa. He can back out on the Ali deal from my understanding. So that may happen now. I think CKX will now look for a third party to merge with as they were hoping with 19X. That was where they were going to get funding for their Vegas hotel. EPE is investing a lot into the Graceland plans as is CKX. It may be downsized now due to the fall through agreement but it'll still happen. They've already begun demolishing apartment complexes behind the Graceland visitor's center. If they were putting their plans on hold those bulldozers would come to a halt.
elvislives72 (profilecontact) wrote on Jan 1, 2009report abuse
What's happening with CKX and the credit crisis is happening all over. Rapper JayZ has now announced that he will not be pursuing a chain of resort hotels as well. Many project that are not already underway in construction will be canceled or put on a year long hiatus. That's from Vegas to NY. However Jack Soden the CEO of EPE has already said that the plans for Graceland are still afoot meaning they're still moving forward with their plans. I don't think they'll be doing what they planned to due to the economy but I think their main priority is to improve and renovate first, maybe move all Elvis stuff to the same side as the mansion and then down the road as in years, start to develop a new hotel and restaurants. Brian's right, give the man a chance to fulfill his dream for Graceland and Elvis. Nobody saw this economic storm coming. It hit like a tornado.
Brian Quinn (profilecontact) wrote on Dec 31, 2008report abuse
I cannot understand the mistrust that some fans have of Bob Sillerman and CKX. Everything he has touched up to now has been an out and out success. This is why Priscilla and Lisa Marie have sold 85% of the rights of EPE to him. They feel he is the man for the job and acknowledge that they cannot achieve what he is capable of. Just give him a chance as and when the current financial crisis abates.
Eap54 (profilecontact) wrote on Dec 31, 2008report abuse
I too agree with Mofoca22. The only difference with sillerman is that he can sale his rights to Elvis name, but col. parker put in him in hts grave
panda (profilecontact) wrote on Dec 31, 2008report abuse
just to wish all at elvis news a very happy new year and lets keep elvis name in the news and in the charts in 2009
PRESYER (profilecontact) wrote on Dec 31, 2008report abuse
I do agree with you Mofoca22. I too am disgusted to a certain extent.
I just hope that we will never have the opportunity to see another profiteer who will do nothing but to take advantage of his name no matter how and when! Elvis Presley in "Elvis in Concert" (CBS) was Elvis Presley and those who criticize him and /or detract him concerning that period should...
I saw him performing (exactly 12 weeks before his death) in the US State of Maine and he did it, he really did it !
Jumpin Jehosaphat (profilecontact) wrote on Dec 31, 2008report abuse
Gee I'm broken hearted. There is enough junk in Las Vegas but i do like the .13 cents a share nice to see the bigones come down once in a while.
Mofoca22 (profilecontact) wrote on Dec 31, 2008report abuse
ahhh i can see sillerman selling elvis rights to someone else now, now that he wont be making any money off his name. freaken shame that elvis has become just a money making venture for people and it disgusts me also when you go on you tube we always have to defend elvis's legacy because they say he was drunk and stoned during elvis in concert cuz he screwed around when singing are you lonesome tonight. people have no respect for the man behind the legend in business or in death. i love the king and ill defend him till the end like i know you all will. he is our guy lets hope 2009 is a greater year for elvis and the rest of us cuz we know 2008 was kind of a joke.
Brian Quinn (profilecontact) wrote on Dec 31, 2008report abuse
I suspect that this project will be back on the agenda when the current world financial crisis wanes.
PRESYER (profilecontact) wrote on Dec 31, 2008report abuse
That's it, friends ! When it comes to Elvis Presley, it's always a lot of mess! I imagine that someday this could lead to the "bankruptcy" of EPE and one again prove that every good thing in life must... come to an end. Money makes the world go around, they say, well...
FJE (profilecontact) wrote on Dec 31, 2008report abuse
Too much monkey business for me to be involved in!!

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