Wynn weighs D.I. options

May 8, 2001 9:55 AM

The countdown continues for Steve Wynn’s remake of the Desert Inn property, and speculation is building.

Promising an announcement by "late this spring," the ex-Mirage magnate has kept a low profile as he pores over architectural schemes and works to line up financing. Thus far, all he’ll divulge are sketchy plans for a 52-story resort with 2,300 all-suite rooms and a water feature.

But that’s just a sliver of the 220-acre canvas occupied by the venerable Desert Inn resort and golf course. Ultimately, Wynn intends to gut the course and, according to sources, erect up to four resorts on the property bounded by the Strip, Sands Avenue, Desert Inn Road and Paradise Road.

In his characteristically understated style, Wynn dubs it "the single most wonderful resort in the history of Las Vegas."

The hot corner is at the Strip and Sands across from the expanding Fashion Show Mall. With the Rouse Co. doubling the center’s size to 1.9 million square feet and adding some big names like Nordstrom’s, Bloomingdale’s and Lord & Taylor, potential tie-ins with Wynn are emerging. Along Las Vegas Boulevard, the Maryland-based retail developer is putting up a canopy stretching the length of two football fields. The frontage will accommodate a 72,000-foot "public plaza" of sidewalk cafes and bistros. Above it all will be a giant LED display screen and 400 feet of advertising panels.

Not about to be outdone, Wynn reportedly is in serious negotiation with Harrods of London for a store on his side of the street. Harrods owner Mohammed Al Fayed has expressed increasing interest in both Las Vegas and gaming. He recently raised $506 million by mortgaging Harrods’ Knightsbridge store in London and is exploring new investment opportunities. And he already has an Internet gaming site available in 11 languages.

Neither company will confirm or even discuss a Wynn-Al Fayed collaboration. But industry observers are betting on some sort of joint venture that melds big-name retail, entertainment and casino action.

"It would bring the retail-gaming synergy to a new level," says George Connor of Colliers International.

Are people just adding two plus two and getting five?

Harrods may, in fact, be a long shot. The towering egos of Wynn and Al Fayed, the would-be father-in-law of the late Princess Diana, are so large they might not fit in one city.

Al Fayed, for example, has his own Web site (www.alfayed.com), which immodestly trumpets the "Thoughts of Chairman Mo." On pages labeled "Who killed Dodi & Diana," he accuses English society of trafficking in "racism, hypocrisy and invisible power." He claims his son and the princess were killed in a Paris auto accident because the London elites loathed his Egyptian background and would never allow him to become part of the royal circle. Al Fayed has been involved in innumerable lawsuits over everything from immigration laws to agricultural regulations. He has, in turn, been sued by members of Parliament for libel.

Still, Wynn needs capital anywhere he can get it. After landing the D.I. for a bargain-basement price of $270 million, his attempts to secure a $260 million buy-in from Tokyo-based Aruze Corp. were complicated when the pachinko machine maker ran afoul of the law in Japan. Aruze was accused of concealing $35 million in income and was hit with a $15 million fine.

One way to jump-start the D.I. venture would be to reroute the monorail project to serve Wynn’s property. Bob Broadbent, director of the transit system, confirmed that talks with Wynn have been "ongoing."

"We hope to have a decision by mid-June," he says.

Instead of running along Sands Avenue, an alternative alignment would route the monorail into the center of Wynn’s property.

"Automatically, the least valuable parcel becomes the most valuable," Connor says. That venue, he suggests, could be a combination of L.A.’s Century City and New York’s Times Square.

Richard Lee, a local real estate expert and executive with First American Title, also envisions a substantial non-gaming component to the remade Desert Inn expanse. "It will be diversified with things like high-rise offices on the east end," he speculates.

Wynn, the hotelier who made themed resorts into an art form, says he won’t theme the D.I. property. Thus, landing a Harrods wouldn’t necessarily trigger a faux version of jolly old England - especially with two other nascent Strip projects and Virgin Atlantic Airlines Chairman Richard Branson contemplating such a motif.

But sources say Wynn might try to jump the gun, noting that London-based Virgin Records and perhaps even a James Bond-007 entertainment element could be a natural pairing with Harrods.

Until he’s ready to talk, Wynn is keeping his cards close to the vest.

"Then," as he said recently, "you won’t be able to shut me up."