Wynn Palace entering design phase two
January 30, 2018 3:00 AM
by Phil Hevener
“The impact of the tax bill passed by Congress is like a tsunami,” Steve Wynn was saying as he took a look at the future during a discussion of his company’s plans for the future both in Las Vegas and Macau.
In Macau, a gaming jurisdiction that had been the focus of grumbling by the Wynn Resorts chairman, Wynn has reversed his attitude. The gloomy outlook had him grinding his teeth in frustration a couple years ago when it appeared the government was over-regulating the casino business there.
Yes, he has definitely changed his tune and the company is moving forward immediately with the design of its phase two Macau at the moment project on 11 acres next to the Wynn Palace which opened in late 2016. Don’t forget, there was a time when it sounded as though expansion was unlikely.
“Do not bet against China,” he says now, his voice rising in emphasis of this point.
Wynn Palace has managed to successfully take what looks like huge potential in the so-called mass market of wealthy Chinese who have an appetite for a quality experience in the floral-themed resort.
Wynn has received informal encouragement to begin work on phase two, a relatively small hotel of several hundred rooms – each a minimum of 650 square feet with features he has not previously used. The management team for company projects was recently in Las Vegas working on designs.
And that brings us to the 280 acres on the east and west sides of the Las Vegas Strip, land that includes the 38 acres he bought opposite the Wynn-Encore complex. Properties on both sides of the street will be connected by an “air conditioned umbilical cord.’’
The 38 acres will be the site of what Wynn will call Wynn West. The land will no longer be referred to as the Frontier property. Better to look at the 38 acres and everything on it in terms of its future potential. He took a similar position after the 2000 purchase of the Desert Inn and its golf course.
The story of development along the Strip has been one that involves huge real estate deals. Not all of them worked out but they did often enough that “sin city” and all it offers travelers have been in a near constant of happening.
“A work of art in constant progress” is the way one frequent visitor sees it. “Every time I come to Vegas someone is talking another feature.
Wynn is planning another hotel on his recent purchase. It would be about 2,000 rooms. Add those rooms to what Wynn Resorts has or will build east of the Strip and the company will quickly have about 8,000 rooms, a nice position for the company to be in at a time when the average nightly rate is regularly at $300 or so and still climbing.
This is an example of spending habits that have increased the percentage of non-gaming revenue for companies that can afford to offer the best products.
With facts serving as drivers of corporate strategy, planning and design work related to all company ventures is moving forward at a faster than normal clip.
Why so fast? There are a couple of likely reasons, not the least of which has been the attention given Wynn in and the company in the wake of a Wall Street Journal story that alleges sexual misconduct over decades.
Wynn has denied it all but because he is the high profile person he is in addition to becoming chairman of the Republican Party’s finance committee (from which he resigned over the weekend), the accusations involving his so-called misconduct are also being checked by casino regulators in both Nevada and Massachusetts. Macau is not expected to be a problem.
What happens should the unexpected occur and he is forced to surrender his gaming license in either state?
Caesars Entertainment would probably leap enthusiastically at a chance to acquire the Wynn Resort holdings. The company has long regretted its decision to ignore earlier opportunities.