It feels like I've started my own cottage industry talking about SLS Las Vegas. It's a topic that people seem to be interested in and that they feel strongly about, and I feel I've got something to say because I talked to COO Rob Oseland last week. I shared my thoughts on last month's press release right here last month. After the jump, I'll talk about what I've written and share a little something new.
On Thursday, my Green Felt Journal in Vegas Seven gave a basic overview of where SLS Las Vegas stands right now (in addition to some cover art that I'm sure the sbe folks didn't fall in love with). You can read it here.
In addition to talking a little bit about why he thinks SLS will work, Oseland talked about his career with Wynn, which I think is a very important piece of the puzzle. Wynn "graduates" pretty much have their pick of where they want to work next, and I asked Oseland what drew him to sbe when he could probably have scored the president's chair at his pick of already-running Strip resorts (for COO, pre-Tom McCartney springs to mind as a possibility).
He said that it was the more entrepreneurial feel at sbe, and he seemed fairly clear about not wanting to be encumbered by a big corporate structure. Read into that what you will.
There, I specifically asked how it would fit in with its neighbors, and Oseland's basic answer is that it won't. And how SLS could succeed where Cosmopolitan has not. You might not be satisfied with his answers, but it was clear to me that he's thought about this a great deal.
So here's two more snippets. My questions in bold:
What's the timeframe for funding and construction?
So far we've got $300 million raised that is placed in escrow until remaining $115 comes in through EB-5 funding. That will happen in the next 2 to 6 months.
We'll have construction immediately commence when the other $115 million comes in, which will be as early as middle of July or as late as October. It will take 17 months to build from then, so we could open in early 2014.
The next question has some real relevance today with the news that Echelon won't open until 2018 at the earliest.
Boyd has a legacy database and land on the Strip right down the block. Why do they think it's 2-3 years before construction should start and you think the time is now?
From a Las Vegas macroeconomic perspective, we've seen the market absorb 11,000 rooms in the last few years. Since then occupancy has grown, ADRs have grown, and visitation has grown, along with convention volume. It's a recovery. We feel that two years from now that recovery will still continue, and the city will be more healthy. The market will be able to absorb an increase that's a very small fraction of the room base.
The market needs to continue to reinvent itself. We will do that. History says that things that are current always prevail.
If nothing else, Sam Nazarian has in Rob Oseland a guy who knows who to design, build, and open a Las Vegas Strip casino. He was involved in doing that with Bellagio and was COO of both Wynn and Encore. If they can get the $115 million, I don't see any reason why this wouldn't happen.
Of course, the big question is whether they can get that money, and what the place is actually going to do once it's open. I can't give you a definitive answer to either of those questions, and I honestly don't think anyone--even the people planning the project--can.
In any event, this is fun stuff to talk about.