Red Rock Station
set to break ground

Jan 20, 2004 6:51 AM

Station Casinos is set to proceed with building its new flagship property, Red Rock Station, now that county commissioners have approved the project.

To be built on 73 acres at I-215 and Charleston Blvd., Red Rock Station will initially have about 400 guest rooms, down from 1,500 rooms originally planned. The height of the hotel tower has also been lowered from 300 feet to about 198 feet.

The changes were required to meet Summerlin zoning codes.

The anticipated cost for Red Rock Station is about $450 million to $475 million, with construction slated to begin this summer. The project is expected to be completed in late 2005 or early 2006.

"Red Rock Station will be the premier property in the Las Vegas locals market," said Frank J. Fertitta III, chairman and chief executive officer, during a conference call last week. "The project represents the next level in the evolution of regional entertainment complexes for locals. We expect that the quality and location of Red Rock Station will drive business from all over the valley."

The initial phase of Red Rock Station will feature a sprawling casino with 60 table games and 2,700 slot machines. Other entertainment venues will include 16 movie theaters, a 20,000-square-foot health spa, and several restaurants, including a buffet.

Fertitta added that Red Rock Station will be similar is size to Sunset Station, the company’s most profitable casino, but would have many of the upscale amenities found at Station’s highly-successful Green Valley Ranch Station.

"Using the same architects and designers that helped create Green Valley Ranch Station, we’ve started the initial design of (Red Rock Station), and we expect to add a number of additional amenities," Fertitta said. "We are also extremely excited about moving forward quickly with this project because its location allows us to offer our product to two markets that are currently under-served by Station — Summerlin and West Las Vegas."

Red Rock Station will be built in the 1,300-acre Summerlin Centre development, a Howard Hughes Corporation project.

In addition to the hotel-casino, Summerlin Centre will include an 8-acre Central Park, a 1.5 million square foot regional shopping center, an office district encompassing more than 2 million square feet of mid- and high-rise buildings, a high density urban residential district, and two traditional suburban residential communities.

In addition to representing Station’s latest and most expensive casino to date, Red Rock Station will become the company’s corporate headquarters and centerpiece of its gaming empire.

Moreover, Red Rock Station will be come the company’s sports hub, from which all race and sports operations will be directed. The current hub is Palace Station.

In its conference all last week, Station officials estimated Red Rock Station would initially generate $60 million to $65 million of EBITDA (cash flow) in its first year, increasing to about $80 million to $85 million by its third year.

Company officials were also elated that Red Rock Station can be financed through a combination of free cash flow, bank credit and senior subordinated notes, will are scheduled for offering early this year.