Home News Cosmopolitan sold for $5.6B, without any real estate transfer taxes

Cosmopolitan sold for $5.6B, without any real estate transfer taxes

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When investment giant Blackstone sold The Cosmopolitan of Las Vegas, it exceeded the amount paid a few billion dollars a few billion dollars, and executives praised the resort’s “high level of success.”

The deal was also the latest high-value sale in southern Nevada and did not generate a $ 1 real estate transfer tax. Governor Steve Sisolak Congressmen say it should be taken up at the next legislative session.

Billionaire’s Stephen Schwarzmann announces Blackstone May 17th Completed the $ 5.65 billion sale of cosmopolitan. On the same day, a certificate of real estate was recorded in Clark County, with no sales price, transfer tax, or transfer tax, and the specified line was blank, showing the county record.

To claim a transfer tax exemption, Filing quoted a section of state law that allows real estate owners to transfer real estate to affiliates without paying taxes.

The description described: “Transfer between entities with a parent-subsidiary relationship (direct subsidiary from the parent company)”.

Blackstone held partial ownership of the property with approximately 3,000 rooms, but as part of a multi-billion dollar sale, two new groups acquired ownership of the flashy hotel casino real estate.

Numerous lucrative transactions in southern Nevada (valued at hundreds of millions or billions of dollars or more per transaction) are real estate transfer taxes that help buyers and sellers support Nevada schools and low-income housing. It is configured to avoid payments. , Review-Journal Survey It was released last month.

This complex transaction eliminates the need for large companies to pay daily taxes on the sale of Las Vegas Valley homes, apartments, warehouses and other sites, resulting in millions of dollars in government tax collection annually. I will.

In such transactions, buyers often acquire a limited liability company or other entity that owns the property, rather than buying the property directly.

New York-based Blackstone announced $ 5,000 bonus For each of Cosmopolitan’s approximately 5,000 employees, a week before the sale ended, the statement in this story said:

“We comply with all laws and comply with tax laws in all circumstances. We are very proud of what we have provided to Nevada and our citizens through our investment in cosmopolitan.”

“Collecting transfer tax”

Prior to the completion of the Cosmo sale, at least $ 27.5 billion worth of transactions in the Las Vegas region, including approximately 20 transactions involving hotel casinos, malls and other real estate on or near the Strip, were in 2007. Since then, it has ended without being publicly reported. Real estate transfer tax.

Buyers or sellers involved in these transactions, including the latest ones, have not been accused of fraud by government agencies, as far as the review journal can determine and the sales document claims. Transfer tax exemption Permitted by state law.

Mr. Sisorak said this month that he “expects” the state legislature to “consider this completely” when the next legislature is held in February.

“We need to collect a transfer tax on those sales,” the governor told the review journal.

He also said that large and small transactions need to be analyzed.

“We are clearly in a time of revenue need in the state, which needs to be fair to everyone,” said Sisorak.

Big money

The transactions tracked by the Review-Journal involved multiple buyers and sellers, including casino operators MGM Resorts International, Station Casinos, Wynn Resorts, Las Vegas Sands Corp., and Genting Group. Casino Landlord Vici Property; Pension Fund TIAA; Landlords of several mega resorts on the Strip including Blackstone, Bellagio, Aria and Vdara. Millionaire Phil Ruffin, owner of Treasure Island and Circus Circus.

For example, Blackstone acquired cosmopolitan from Deutsche Bank in 2014 for $ 1.73 billion. The certificate recording the sale of real estate with the county stated that the selling price, transfer tax amount, and transfer tax were all “$ N / A”.

As part of the latest sale of cosmopolitan, MGM Resorts has acquired operations from Blackstone. Over $ 1.6 billion He then leased the property for an initial annual rent of $ 200 million.

On the real estate side, New York investment company Stonepeak and the family office of Andrew and Peggy Cherng, the operator of fast food chain Panda Express, have acquired ownership of the property.

When there was a sale publication In September, Blackstone real estate executive Tyler Henritze said: Said Cosmopolitan staff said, “We have perfectly implemented an ambitious business plan to position real estate for such a high level of success.”

Blackstone did not disclose new ownership of the property or personal ownership of the new landlord.

Stonepeak refused to comment on this story. Efforts to talk to Cherngs or representatives have failed.

In Clark County, transfer tax accounts for part of the purchase price of real estate, tax rate 0.51 percent. For example, if you sell a $ 300,000 home, you will incur a $ 1,530 transfer tax.

However, high-value transactions can charge a large amount of tax.

For example, the $ 4.2 billion sale of Bellagio real estate in 2019, the $ 3.89 billion sale of Aria and Vidara real estate last year, and the $ 1.1 billion sale of Crystal’s luxury mall shop in 2016 totaled about. It could have generated $ 47 million in transfer tax revenue. ..

Instead, property records show that their collective transfer tax bill has been nullified.

The Review-Journal is owned by the Adelson family, including Dr. Miram Adelson, a majority shareholder of Las Vegas Sands Corp., and Patrick Dumont, President and Chief Operating Officer of Las Vegas Sands.

Contact EliSegall [email protected] Or 702-383-0342.follow @eli_segall On Twitter.

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