Park Place Ent. plans ‘surprise’ at Flamingo

May 28, 2002 8:09 AM
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Park Place Entertainment has big plans for its Flamingo and Bally’s properties.

President and CEO Tom Gallagher teased the annual shareholders’ meeting last week with mention of "a great surprise and attraction" at the Flamingo. He later branded Bally’s front entrance as "the most valuable property in Las Vegas."

Company officials provided no further details, but sources tell GamingToday that the Flamingo project will include a major entertainment venue and a significant expansion of restaurant offerings. "After all, our name is ”˜entertainment,’’’ said one insider.

Speaking of entertainment, work continues on the 4,000-seat Colosseum across the street at Caesars Palace. The $95 million facility ”” which Gallagher called "the highest quality entertainment venue in Las Vegas" ”” will host Celine Dion for 200 shows each year.

Demand has been so strong that Caesars began selling tickets last week, 10 months before the scheduled March opening. Seats ranging from $87.50 to $200 top Bellagio’s "O" as the priciest ducat on the Strip.

Still, some stockholders were less upbeat. One called the massive Colosseum "a company killer" that will require unprecedented revenue to break even. Another complained that Park Place’s stock was performing poorly.

Analysts have predicted earnings-per-share at about half of MGM Mirage, Mandalay Resorts and Harrah’s this year.

Gallagher said a new management team, along with a commitment to "operating effectiveness and financial discipline," is righting the ship. Meantime, he termed Park Place stock a good value for the future.

The company is also looking at new gaming venues from Rosemont, Ill. to Macau. In New York, Park Place has an agreement with the St. Regis Mohawk tribe to build a casino in the Catskills, 90 minutes from New York City ”” once all the legal issues are ironed out.

"We were the first runner-up in Macau (behind Stanley Ho, Steve Wynn and The Venetian) and we doubt that they’ll all be awarded,’’ Gallagher said. "We’re next in line with Mandalay.’’

In Atlantic City, Park Place is reviving the Ocean One Pier in order to expand and upgrade retail offerings next to its Caesars Palace property.

In Las Vegas, Gallagher expressed confidence that his company’s proposed contract with the Culinary Union will be ratified ”” a move that could give Park Place a leg up in fierce Strip competition.

But things aren’t so rosy at the troubled Aladdin, where Park Place took a $70 million write-down on its bond investment.

"There’s no likelihood that we will get anything out of it,’’ Gallagher said. "If the place had been run rationally, there might have been a chance. But it’s not a high priority for us now.

"We’re thinking more about what we can do at the front of Bally’s.’’