Hotels, after Wynn

Feb 22, 2005 9:10 AM

Much is being made of the upcoming opening of Steve Wynn’s new resort on the site of the old Desert Inn. And for good reason — Wynn has always been an innovator in Las Vegas and everyone is excited to see what’s behind that towering "forest" in front of his property.

But, beyond Wynn Las Vegas and Sheldon Adelson’s plan to build a new mega-resort next to his Venetian, there isn’t much going on as far as hotel construction on the Strip is concerned.

Not on the surface, anyway.

There are several huge projects in the making that we have heard relatively little about. They are the stuff of future stories and some big-time spending. (See interview with architect Joel Bergman on page 1.)

For instance, once Harrah’s completes its acquisition of Caesars Entertainment, it may reshuffle the casino deck at the corner of Flamingo Road and the Strip. CEO Gary Loveman has said that he would like to bring the "Horseshoe" brand to the Strip, and insiders say he’s got his eye on the largely undeveloped land in front of Bally’s.

Another site that is begging to be developed is the Riviera property. The 26 acres between Paradise Road and the Strip is well-located, and the mish-mash nature of the add-on buildings cries out for the wrecking ball. The problem, right now, is the company’s stock is trading too high — in the low 40s at press time — making a buy-out very costly.

Ditto for the much discussed Tropicana. The escalating values associated with Strip real estate may be the best thing for the aging Trop, but its owner, Aztar Corporation, hasn’t tipped its plan as to which direction it’s headed. Sources close to Aztar, however, reveal that the company doesn’t want any part of redeveloping the prized site. That would be up to a new owner, whomever that turns out to be.

If there’s one constant that will drive these deals, it’s the fact that the Strip is not going to be duplicated anywhere else — real estate values will continue climbing, especially as projects such as Wynn Las Vegas and Donald Trump’s high-rise condos come on line.

Returning to the north Strip, the Sahara is on verdant land, though heirs of the late owner, William Bennett, are expected to wait patiently for an offer that grabs their interest.

MGM Mirage, which will soon own Circus Circus through its Mandalay acquisition, will eventually focus on redeveloping the property, perhaps in conjunction with the vacant land north of Circus Circus and opposite the Sahara.

Boyd Gaming is definitely exploring how it will develop the aging Stardust site. They might have tipped their hand when they bought the Budget Suites next door, giving them 60-plus prime acres. Expect Boyd to announce a mixed-use project — hotel, condos and retail — for the Stardust site sometime in the near future.

Another outgrowth of the MGM-Mandalay merger is the emergence of several new players on the Strip. Highly-placed principals in the Mandalay Resort Group supposedly have plans to remain in the resort business, but as a private rather than public company.

Another possible player is former Golden Nugget Chairman Barry Schier, who is expected to resurface soon as a principal in a project involving another veteran gaming-oriented entrepreneur.

The Turnberry Place developers have shown they are not content to rest on their high-rise laurels, evidenced by their joint venture to develop a high-rise condo hotel with MGM Grand on the site of its defunct theme park. The word is that Turnberry could push north and acquire the old Wet ”˜n Wild site, which adjoins the El Rancho site that Turnberry is working to develop.

Fueling the speculation over the Wet ”˜n Wild parcel is the fact that Paul Lowden, the parcel’s current owner and former Sahara owner, has lost his appetite for doing the developing himself. Remember, a couple years ago he announced plans for a Fantasy of the Sea themed resort, but those plans seem to have been washed away.

In addition, keep in mind Turnberry’s plan of several years ago to develop a London-themed resort. Those plans were placed on the back-burner, but now it seems like the pot is ready to boil.

Finally, it’s hard to imagine Hilton Hotels not having a significant presence on the Strip. Even though they are building timeshares north of Circus Circus, and the La Concha owners have announced plans for a majestic hotel managed by Hilton’s Conrad division, there is little going on for Hilton on the Strip. Steve Bollenbach said once that Hilton did not get the respect it deserved as a Las Vegas hotel-casino operator. Once the Harrah’s merger with Caesars is completed, look for Hilton Hotels to cut some deals of its own designed to return the operator’s name to prominence in Las Vegas.