The northern half of the Las Vegas Strip may be coming back to life during 2014 even as two of the Strip’s biggest players, MGM and Wynn, look like favorites to get Massachusetts resort licenses.
Developers have been shaking off the effects of the Great Recession that turned this strip of real estate into a graveyard for big dreams as financing disappeared. All that construction was a classic example of bad timing.
Sam Nazarian’s plans for re-building and opening the former Sahara as the SLS, “an all en-compassing mixed use resort” are already known. The project appears headed for an opening in late 2014 although scheduled openings, etc., are always subject to change with relatively little notice.
The other big project that could provide a catalyst for action elsewhere is across the Strip and slightly to the south of the SLS on land that was once going to be the site of Boyd Gaming’s $4.8 billion Echelon resort development.
The Genting Group acquired this property, about 80 acres, months ago. Its executives talked of plans for a massive Asian theme project. There is little obvious indication of anything happening since then, but access to capital is not one of Genting’s problems.
The company operates thousands of slots in a casino that has been built at New York’s Aqueduct racetrack. It has also acquired the old Miami Herald building on Biscayne Bay, the idea being to build there should Florida lawmakers ever get around to allowing casinos in the southern part of the state.
What should all this mean to Las Vegas?
Activity tends to produce a ripple effect and consumers show a greater willingness to spend. Casino companies have added to their Las Vegas amenities and used sophisticated marketing programs to reach travelers with an inclination to spend time in Las Vegas.
Continuing positive developments on the Genting and SLS sites might produce a rebirth of activity at Carl Icahn’s abandoned blue tower, the former Fontainebleau. People traveling to and from the SLS and whatever Genting has in mind will help create the kind of energy that does not now exist on the northern part of the Strip.
The Fontainebleau tower was about 70 percent complete when its developers, led by former Mandalay Resorts executive Glenn Schaeffer, hit some severe financial turbulence in 2008 and were forced to halt construction. The project went into bankruptcy and Icahn bought it for $150 million at a bankruptcy court sale in 2010.
Icahn may have figured he would quickly sell it to Penn National, which had been the only other bidder in the auction. The Penn officials knew they were looking at the need to spend another billion or so and balked at paying whatever Icahn was asking.
Icahn has no interest in looking at the Fontainebleau as anything other than a real estate deal and so he sold off all the furnishings and carpeting at bargain rates to other hotels such as the Plaza.
The prevailing economic climate at that time for projects or concepts such as a Las Vegas resort could be politely described as terrible – months before Boyd Gaming had called off its Echelon project. Plans for a Las Vegas version of Manhattan’s famed Plaza Hotel on the former site of the Frontier had also been put back on the shelf.
The Israeli owners of the Frontier land have been looking for a joint venture partner since then without a lot of success. Other north Strip corridor properties such as the Riviera and former Las Vegas Hilton, a block east of the Riviera, have also struggled.
Their big need: developers with access to capital and compelling visions about what Las Vegas might once again become.
Ironically, the gaming industry’s successes elsewhere and new Internet-related marketing capabilities have reminded some companies of the importance of a Las Vegas presence.
Macau is growing and it’s big and noisy, as are other areas of Asia. People from other parts of the world have a lot of money to spend on fun and games.
The nice thing about Las Vegas as far as a lot of deep-pocketed Asians and other globe-trotting tourists are concerned is that it is not Macau.
It’s another place to enjoy a world-class experience.
Phil Hevener has been writing about the Nevada gaming business for more than 30 years. He can be reached at [email protected]mingToday.com.