Boom, Bust and BA-BOOM - Nick's Picks 2006

Dr. Death Watch Returns For Las Vegas' Annual Physical

Posted by Chuckmonster

VT: Sahara and Riviera are both rumored to be courting suitors for purchase or partnership. Have they missed the boat for this wave of development?

NPC: If we've learned anything from Las Vegas "history" over the last 20 years, it's that it's never too late to do something new and cool. It's not inconceivable that Las Vegas could experience a significant slowdown, but so far that hasn't been a good way to bet. I don't think they've missed the boat, but I doubt it will get a whole lot easier to finance the sort of construction that will be needed to attract customers as we move forward.

VT: This year former Mandalay Resorts CEO Glenn Schaeffer announced a partnership with Fontainebleau Hotels in Florida to bring a Fontainebleau to the Vegas strip on the Strip-facing lot next to Turnberry. With all the construction going on in the next few years how feasible is it that Fontainebleau will actually become a reality (given competition, cost of entry, construction costs etc.)?

NPC: I think it's very feasible. The Fontainebleau people are very serious, well capitalized, and are working with big names in Las Vegas such as Mr. Schaeffer. Of the proposed but unconstructed projects slated for the Las Vegas Strip, I think it's one of the more serious projects. I also always like it when new blood with new ideas comes to Las Vegas, especially after the recent wave of megamergers so, personally, I hope this project is a success. The only down side I can see is that nobody is going to spell its name correctly.

VT: Let's talk about the hidden tumor at the Tropicana... every 3 months a report comes out stating that the Trop has ceased taking reservations after a certain point, fanning the flames of redevelopment on the Tropicana site. What's going on at the Trop?

NPC: A Las Vegas resort/casino is a big enterprise that can't turn on a dime. They typically take reservations and plan special events and conferences months, sometimes years, in advance. We all know that the Tropicana is an older property sitting on some very valuable real estate. The Tropicana's parent company, Aztar Corporation, knows that they need to replace this property. Doing so will require closing the place down, so they don't want to schedule events there too far out, which limits when they could begin construction. Therefore, they only take reservations a few months in advance. Every few months they announce no new plans and move out the date for accepting reservations.

Aztar has said they want to develop the Tropicana site themselves. I'm guessing the fact that they haven't done so by now probably means that they can't raise the money they need to do so on favorable terms. Either they have to bite the bullet and do it, they need to sell the property, or they must partner with someone who can afford to develop it in exchange for a piece of the action. Aztar loses money in lost opportunity costs the longer they delay this. Some day something has got to give.

VT: Colony Capital has done an amazing job with the Las Vegas Hilton bringing in Big Name entertainment and beginning a massive multi-phase realignment of its offerings. What do you see in the Hilton's future? Will they change the name when the construction is completed?

NPC: I like the Hilton. This is a place worth visiting. We can make (fair) jokes about the monorail, but I think it helps the Hilton. They only have the rights to the name for a limited time, so they'll have to change it within the next few years. I said here last year that they should adopt the old name of the property, the International. I'll stick with that recommendation this year.

VT: Wynn Las Vegas opened to much fanfare and ballyhoo in April 2005. It's been in operation for nearly 10 months, and has proven to be a monstrous success, what other tricks may Wynn have up his sleeves?

NPC: Well, as you well know, Wynn is getting ready to start on the construction of his expansion project, modestly named Encore. After that, Wynn has about 200 acres to play with, currently being used as a golf course behind the property. Most folks seem to think that this land will eventually become another (fourth?) master-planned mixed-use megalopolis, but who knows what Wynn has up his sleeves?

VT: If you had to narrow down one area where Wynn Las Vegas has most impacted to the Las Vegas casino industry what would it be?

NPC: The one area where Wynn Las Vegas has impacted the local industry is in timing. Wynn's construction has led off the last three waves of casino building. Wynn Las Vegas is a nice place, but I wouldn't call it intrinsically groundbreaking. What's important is not the property, but that everyone has started building again at least in part in response to it.

VT: Moving to another Steve Wynn property, Tim and Tom sold the Golden Nugget. Nobody saw this one coming, not even Tim and Tom... what's your gut feeling about Landry's and their plans for the Nug?

NPC: Boy, I don't know what's going to happen there. Every time we seem to be on the verge of a downtown renaissance, it never seems to materialize. Tim and Tom came in and their vision of the Golden Nugget sort of fizzled. Barrick bought out Gaughan and was supposed to massively redevelop everything, but that's collapsed in a heap. Harrah's bought the Horseshoe, and then flipped it in a hurry. Landry's has a shot and doing something worthwhile, but then again, so have a lot of people. I don't think they can revitalize downtown all by themselves, and I don't see them getting a lot of help from their neighbors.

     Add To Itinerary


Comments & Discussion

» No Guts, No Glory... Be The First to Post

Comments Are Closed