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Dan Lee Is The Man With The Plams

By Chuckmonster on Wednesday, 9th October 2013 10:26am
  » filed under Las Vegas  comments: 14


Late last week, The Palms abruptly changed management, sending post-Maloof property president Joe Magliarditi to the cleaners and appointing deposed Pinnacle Entertainment CEO Dan Lee in his spot. Magliarditi was the man responsible for the full scale property refresh and rebranding undertaken by TPG Capital and Leonard Green and Partners since they wrestled control of the property from cash strapped visionary George Maloof in 2011.

Under Magliarditi, Palms refreshed their hotel room product, upgraded interior spaces, swapped out bars & restaurants and had begun a major refresh of its sagging nightlife venues. Pioneered by Maloof, nightlife/daylife were Palms' bread and butter but are now as ubiquitous as... well... bread and butter, but with even more cutthroat competition. In addition to appealing to tourists with a penchant for partying, Palms' pitchfork dove deeply into the wallets of the locals market by offering the best video poker pay tables and slots in town.

While the renovation and refocused branding of The Palms has been very well received by guests, it has fallen short of its goal - restore the Palms to its once glorious distinction as being THE joint in town.

Enter Dan Lee.

What? Yes, that Dan Lee. The former Wall Street analyst turned Steve Wynn acolyte who was Chief Financial Officer during the heady days of Mirage Resorts. That Dan Lee. The very same Dan Lee who silently orchestrated a massive covert operation of false corporations and holding companies that bought up every sliver of land between Bellagio and Monte Carlo without raising suspicions of land owners or driving up prices. That Dan Lee. The very same Dan Lee who transformed an inconsequential gaming company Hollywood Park Entertainment into publicly traded powerhouse Pinnacle Entertainment. That Dan Lee. The very same Dan Lee who bid up the price of Aztar's sale of the Las Vegas Tropicana so high that eventual winner Columbia-Sussex collapsed under the debt and mis-management, while Pinnacle walked away with a cool $300 million break up fee. That Dan Lee. The very same Dan Lee who purchased the Sands Atlantic City from financier Carl Icahn, which was promptly closed, imploded and carted away while he spearheading another campaign to buy up surrounding properties that he hoped would eventually become Pinnacle Atlantic City. That Dan Lee. The very same Dan Lee who was forced out as CEO of Pinnacle after allegedly threatening St. Louis Council member Steve Stenger and attempting to strong arm St. Louis County executive Charlie Dooley after they gave permission to a competitor to build a casino near Pinnacle's Lumiere Place.

Yeah. That Dan Lee.

Strangely, as was his desire all along, Dan Lee finally has a property in Las Vegas. The Palms.

On the surface, the appointment of Dan Lee as boss of the Palms reads like a size 12E foot being crammed into a size 9B shoe. To say Dan Lee is overqualified for the job is the uber understatement of the millennium, yet par for the course in Vegas.

Without question, the neighbors should be terrified.

Gold Coast generates little-to-no excitement for the casual Vegas traveler, but is solidly attached to the Boyd Gaming's cautious and sturdy backbone of locals and Hawaiian islander marketing. With some adjustment in casino playability and renewed locals focus, Palms may be able to snare some of the locals casino play back.

Rio, a property of questionable quality that has been slowly losing its battle with father time thanks to Caesars Entertainment slow motion bankruptcy, may have Penn & Teller and access to the dregs of Total Rewards, but it lacks nearly everything else that can keep it relevant. Rumors of Rio sales are so frequent that we don't even bother reporting on them anymore, as Caesars prices in a chunk of their debt along with the nuts and bolts of the property.

Losing Pinnacle was Dan's personal MGM take over of Mirage. Like Wynn, Lee had the world in his hands and let hubris, power, greed and emotion get in his way. The Palms is his Desert Inn... he's inherited a recently renovated somewhat classic property, slightly past its prime but with branches healthy enough to support new growth. If there is one thing that history has proved it is that Dan Lee doesn't idle. He is always looking for the angle that opens the door to developing his next property. The real play here isn't about turning the Palms into a powerhouse. That goes without saying. This is about Dan Lee's third act - restoring Dan Lee as gaming industry powerhouse, but now with a property in Las Vegas.

Perhaps the terrified neighbors shouldn't include the lowly Rio or cruddy Gold Coast, but instead those who are rapidly - and for divergent reasons - approaching expiration... Gary Loveman, Steve Wynn and Sheldon Adelson.

Tagged: palms   dan lee   rio   gold coast   steve wynn   pinnacle entertainment   mirage   loveman   


Comments & Discussion:

Great analysis of a story that's caught a lot of people by surprise. What's next? Another Vegas acquisition? Expansion nationally? Lots of properties in lots of markets are on the market.

I will admit that Mr. Lee has studied with the greatest theologians, and is a brilliant administrator, but does he know anything about pastoral ministry? Understanding and addressing the needs of the flock are tricky things and there have been many people who have tried, yet failed. Because they had the "head knowledge" but lacked the "heart knowledge"

Terrific insight and great reporting Mr. Monster. That is classic Chuck.

Great story. So what will stage two be, wedging a foot in the door of the Strip be negotiating a deal to add Cosmo to the mix and with 2 properties begin the dawn of a new casino empire?

There was a great srticle in 1998 in CFO Magazine. If anyone can figure out how to access it, it's worth reading.
"Behind the Mirage How Dan Lee stealthily acquired a big chunk of the Strip ­ and other Las Vegas tales. ... October 1, 1998". www.cfo.com

actually while the article link is dead the google cache version still provides page 1 but unfortunately none of the other 3 pages.

while searching for it, though, stumbled on this absolute gem - from back when Mandalay was Project Paradise, Adelson was seeking Venetian funding, and the Desert Inn (site of Wynn) had just finished a $200mm reno. oops. Bellagio and Paris being built at the same time too. Great read.

have to copy paste because of the non-html comments, sorry:

Building a Classier Image; Las Vegas Hotels Woo Blue Chip Visitors
NY Times 1997

also, back when the article was written the rio was considered 'relatively high-end', yikes.

Good quote to close the article that's probably still true today,

"We are beyond building spaces, we are building conversation pieces,'' said Alex Yemenidjian, president and chief operating officer of MGM Grand, which is controlled by the financier Kirk Kerkorian. ''There will be eventually a half a dozen properties in Las Vegas that will command 90 percent of the public attention, and then every other property will be a dormitory."

@detroit1051: ask and ye shall receive!

tracked down an older version of the CFO article through an archive of their ancient CFONet.com website. Enjoy!


there is also an affiliated story on Lee and Mirage from same issue, linked here. Pretty funny, uses Monopoly as example of Strip frontage:


Thanks for these articles! Excellent sleuthing.

When Marnell Corrao Associates had Rio, it was what the Palms was in its' heyday. It was a locals casino that was also fairly popular with visitors and part of that was because it was the only all-suites resort in Las Vegas at the time.

Here's my wild ass theory. With Caesars and Palms having some mutual ownership, perhaps the new Caesars Growth Properties ends up acquiring the Palms. CGP will be a separate publicly traded company (although Caesars Entertainment will be the majority owner) and perhaps that will be a way for them to acquire an additional property without getting too much heat. Maybe this explains the Lee hire at the Palms.....

@jimmybond, thanks so much. Quite a story. A Vegas friend had an ownership share of Boardwalk at the time, and he has lots of stories about Dan Lee. Dan Lee was just what Steve Wynn needed to keep his feet on the ground while his head was in the clouds. Loved this quote: " "Steve Wynn loves to design hotels. He forgets to buy the land," says Lee with a laugh."

The problem for the Palms is the Cosmo. Now there's no reason for the party-crowd to leave the Strip for the "cool" places with the hip, young crowd like Palms & Hard Rock. It'll be interesting to see what Dan Lee does.

This man might be able to literally move mountains. From the CFOnet.com story:

"Lee and Wynn also lobbied successfully with the county commission to have the Strip's Harmon Avenue crossroad moved north so that it wouldn't cut through the new Mirage land."

Good Story.

Hmmm... If he could restore Palms status as the place all the kool-kids are going to and then buy up the Rio and Gold Coast I could see a mini-megaplex doing pretty well out there...

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