Two Way Hard Three | Las Vegas Casino & Design Blog

It would make sense for SLS to buyout FountainBleu or Echelon or even partner with the New Frontier landowners and build there.

@ Chris Hall--in consultation with the TWHT engineer, I'll work on a solution.

As far as SLS goes, it's definitely an uphill climb for them, but who knows? Projects that seemed more likely than it have failed (Echelon) and ones that were arguably more of a longshot have opened (Cosmopolitan).

I don't know if they can get the money. There are certainly other things I'd do with $115 million in Las Vegas if I could get that kind of money. But if they do, there's no reason to think that Oseland won't get them across the finish line. is the property a success once it opens? I don't know.

As I mentioned on the show, there's also some ambiguity about how extreme the makeover will be. One of the press releases references tearing the structures "down to the skeleton," which I'm guessing doesn't mean the steel girders. I'll see if I can get access to the building to see just what state it's in now post-liquidation.

Thoroughly enjoyed it, and Roger Gros is a great guest. He's not afraid to share his opinions in a direct, fun manner. I, too, would like him to return.

I was hoping someone would ask Roger if he thought the AC Hard Rock boutique hotel/casino would ever be built, but maybe it wasn't necessary. When you all asked him about Atlantic City, his reply was, "Time has passed it by."

It'll be interesting to listen to this episode again in 2014 after we know whether the forlorn property at Sahara and the Strip will be SLS Las Vegas or still an abandoned Sahara.

Finally, I was amazed to learn that Hunter has never been to Boulder City. It's a great, small town. It's a good break for a few hours when the Strip gets overwhelming.

Solid show and great guest.

One thing though...as an audio guy...is there anywhere I can donate some funds to get Dr. Dave a better mic...or at least a windscreen for his existing mic?

I'm with Chuckmonster...SLS doesn't make sense on the front end or the back end. I spent a whole day exploring Sahara near the end of the fire sale. The ONLY way this will ever be anything remotely "luxury" is if they literally tear it down to the studs and start from scratch...which they can't do on their budget. Otherwise, it will be a "Plaza" style renovation...with the same old crappy bones, smelly elevators, and dirty parking garage...just new paint and carpet. The good news is that they sold off all the old mechanical/electrical plant, so at least that will be new...but...best case...if this thing ever does open under SBE, it will be a gold spray-painted, crystal covered turd that at best might siphon off some of the roid-chodes from Cosmo or Wynn.

SLS for VIMFP 2014!!

Great podcast! Roger added some interesting insight, and I hope he returns for future episodes.

Posted by Hunter

What's the point of a show like this if we just hope everything will work out for people that have preposterous plans?

I guess you can argue if our criticisms are 'objective' or not (I do not own any casino resorts ; I don't have any personal upside if he fails beyond repeating it again when it does happen) but since you don't break down specifically what you think isn't objective, it's hard to respond directly to that charge.

There are a ton of reasons why it might not work. Pulling these things off is *incredibly* hard, even if the seasoned operators make it look easy (and even some of them don't). For a guy who had to shutter the old place cause it wasn't making enough money, why should we assume it will work? That's the part of this that no one has explained to me.

As for getting "Earl'd", I'm not worried.

For about 15 minutes, back in '98 or so, several of the major casino operators started babbling about converting themselves into REITs ... mainly because the Clinton administration was about to close some loopholes that would have facilitated the conversion. (Station Casinos went the furthest off the deep end with REITmania; a foreshadowing of worse things to come.) The structure of REITs at the time didn't allow for much reinvestment of revenue, as I recall; I wonder if things have changed in that respect, given that a REIT is ultimately pulling the strings on this Sahara makeover.

Hunter

I'm trying to save you buddy! If you keep it up at this rate Sam Nazarian is going to call Robert Earl and get a copy of his dossier on you.

I think the point Jeff was trying to make is that it seems you guys are more wanting the project to fail in order to prove yourselves right, as opposed to just making objective observations to why it will not succeed.

I guess my opinion on the matter is, give it a go, if he succeeds cool, if not, sucks for him and his creditors. But if he does succeed it should pull some of the D-bags from the other properties up to where no of us is going to go.

I haven't listened yet, but I have to say I'm getting more enthused about SLS after observing what I believe to be a success with Hyde at Bellagio, serving both the day and night markets. That, plus the generally positive anticipation of SLS South Beach opening in less than a month. If money's available, Nazarian's Sahara project may help the North Strip and the city..

jeff - my point in bringing the trump thing up was to illustrate how opinions on the location are convenient to the person giving them (Oseland raves, Trump derides.) Who are you going to believe? I choose to believe neither.

Posted by Hunter

I say what I think and I think SLS is likely a dog.

Comparing SLS to Wynn seems like a major stretch. Two years before Wynn Las Vegas was set to open it was well underway not only when it came to construction but also pre-marketing and customer outreach. SLS has no customer list.

Great show, as always. Thank everyone for taking the time and effort of doing the show. Also, Roger Gros is a smart guy whose insights were good to listen to. I do wish that Gros had mentioned the GGB podcast that is available on the GGB website. I might be embarrassed to admit how many times I have listened to the podcasts featuring Mike Brandenburg from the Golden Gate, Terry Caudill from Binion's/4 Queens, Vince Wycliffe from Boyd Gaming, and the great 30 Years of Gaming in Atlantic City series. I think these podcasts are very close to Dr. Dave's Center for Gaming Research series and should be checked out by any Las Vegas gaming geek. Although the fact they are not on iTunes makes downloading them a major pain, IMO.
Regarding SLS Las Vegas: I wish you would never discuss it again. I think Dr. Dave is willing to give it the benefit of the doubt, and Chuck's citing of Donald Trump's opinion of the intersection via Norm! reflects his negative opinion of the project. I thought to myself that Chuck had jumped the shark when I heard it. For argument's sake I would say that WynnCore has neighborhood challenges from the north, east and west. And Mandalay Bay faces much of the same from the south, east and west. I don't have much desire to defend the project, I just wish you would let it up for air.
My genuine respect and love for you guys makes any negative comment very difficult for me, but I feel compelled to make it, because I think it is very important to keep you thick-dick studs on the journalistic straight and narrow.
Peace, be mellow.

Last week I spoke to some Hyde employees. They said almost all were new hires and almost nobody was brought in from LA. Apparently, SLS staff is stretched thin with the south beach property opening.

Hyde was a pleasant surprise although I don't know how the model servers are going to be able to move fast enough in their mini-dresses and heels when it gets busy.

Posted by Dave

They are growing very fast. It could pay off, but it's pretty risky. I'm guessing that local management makes most of the major decisions at the property level.

I hadn't seen this site for SLS Las Vegas before. The Strip facade sure looks different than Sahara. http://www.slshotels.com/lasvegas/

Jeff, great comment. I don't think Sam is either Milam or Wynn, but he's a lot closer to Wynn. He's got some high visibility properties and venues, and, like Steve Wynn did with Michael Milken, Nazarian is looking to others for money. An example is SLS Hotel South Beach which opens June 14. I'm not a South Beach guy, but I'm definitely going to check it out opening week. Nazarian borrowed lots to renovate the old Ritz: http://www.hotelinteractive.com/article.aspx?articleid=22831

Here's what I'm having trouble reconciling: How can SBE grow so quickly in size and into so many markets? It seems like that has to mean they are either smoke & mirrors, or they'll have no customer service depth. OTOH, I think this kinda reminds me of what Steve Wynn was doing in the late 1980's and 90's in terms of Golden Nugget's being built in Laughlin and Atlantic City, and the Mirage in Las Vegas. Seems like they were seen as rapid growth by a young operator using unusual and high interest financing?
I can't figure out if Nazarian is Chris Milam or Steve Wynn, but I'm pretty sure he's one of them.

Previoulsy I mentioned on this blog that I would be surprised if this SLS project opened before 2016. But it looks like Sam Nazarin might have a chance now to redevelop the SLS project with his first significant hire which is Rob Oseland.

I know I'm late to the game, but great episode. I found the discussion of the HorseP's future name to be interesting. I like Chuck's idea of a biker/whiskey/poker casino, but if that's the case, CET won't use the Horseshoe name on that. If you look at the publicity for the two Ohio casinos, CET is clearly using Horseshoe as one rung (maybe less) below Caesars. That makes much more sense for a future Bally's redo.

No, if CET went this route, they'd use the name "Roadhouse." This is the brand they slapped on their smallest Tunica property when they ended their deal with Sheraton. It looks like a honky-tonk inside, and that sort of vibe would fit very well in the relatively small, pretty dark IP casino. I'd love to see it happen.

I for one do not think you guys suck. i enjoy your show very much.

Regarding "predictable formulae," certainly MGM's Vegas joints have a tendency to draw on similar providers (same group of celebrity chefs, Light Group nightclubs, possibly one of LG's interchangeable restaurants, Cirque show). It should be noted that this formula is being experimented with even in Vegas (Hyde Lounge is sbe, not LG, and Aria brought in Shawn McClain and Masa Takayama, who IIRC don't have other restaurants at other MGM properties).

But I've stayed at MGM Macau. MGM Macau is a totally different beast to any of MGM's Vegas joints (for one, when I was there they had no free alcohol on the main floor and they have extremely tight comps). There's no Cirque shows (there's one at the Venetian but its leaving soon, and Franco Dragone (ex-Cirque) has a show at City of Dreams), and they don't have a single celebrity chef restaurant.

The design of the place is quite impressive too. There's a lot of variety but it doesn't feel inconsistent.

However, design consistency does have a flaw. It can make areas of a casino feel too same-same and thus make navigation hard (I have this problem at Wynn Macau).

MGM Macau does have some Vegas influence though. The Grande Praca is a mix of The Mansion's courtyard as well as the Bellagio conservatory, with lots of Portuguese influence. The main lobby has a huge wall of Chihuly art and a Chihuly glass sculpture on the roof (much more restrained and less dense than the Bellagio one though, but yes, it is glass flowers). The main casino floor feels like a more upscale version of the MGM Grand. But these influences are all given Asian and Portuguese twists.

Short answer is that I think MGM Cotai will cater very much to local tastes and it will not be a carbon copy of anything from Vegas.

I should add that catering to local tastes in no way means the "Auteur In Chief" approach doesn't work. Wynn Macau is the most successful property in Macau, and Roger Thomas did plenty of research on the local tastes and tried to cater to them.

Posted by mike_ch

I don't know, I kind of pull away the opposite feeling from that quote that you do. It suggests they have learned that dropping some tables, a Wolfgang Puck joint, and a Cirque show in any market doesn't cut it anymore.CityCenter seems like the ultimate expression that you can't just keep doing that and scale the materials budget appropriately and expect success.

If they're actually finding a replacement to the predictable formula of offerings, good for them. Hopefully they can bring it back and spare one(!) of their places here from the bore of that homogenized identity.

Sam Nazarian and SLS has a problem and it is quite obvious: he bought a casino at the wrong time (March of 2007) at the wrong location (Sahara and the Strip) for a lot of money (over $300 million dollars). I would be extremely surprised if any casino (including SLS) opens in that vicinity until 2016 at the earliest.

Very interesting and thanks for the Vegas insight. I will make sure I start following everyone one twitter so I can stay up on everything!

Capri has a nice ring to it. Not necessarily with Flamingo. Or even Capri Flamingo (reversing the order).

If Apple were to buy in it would be iCasino or something. (blech) But they are too snooty to associate with gambling.

Great discussions of The D Las Vegas on both Vegas Gang #76 and #77. I'm much more enthused about The D than Hunter. It may partly be because you can take the boy out of Detroit, but you can't take Detroit out of the boy. Derek Stevens sounds like the real deal unlike people like Colony Capital or Sam Nazarian.

Stevens owns an automotive and tool & die conglomerate in Michigan which is privately held but must have been started by his family a century ago. He still runs it, and from its websites, they have used the 20th century to prepare for the 21st. Although I can't find numbers like in a public company, it looks like the business has given Stevens deep pockets to pursue other areas of interest---like Las Vegas. He has a love for the city which he has demonstrated in investments in Golden Gate, Fitzgerald's (The D) and the Las Vegas 51s. He is on Twitter ( @DerekJStevens ), and his ID, "Bolts and Blackjack" tells me a lot. Add to that his directorship in Riviera Holdings, and this is not an absentee investor. It's exciting to me that a real person, not a faceless corporation, sees a future in downtown Vegas. Dr. Dave summed it up from his interview notes with the quote, "Fun", which Dave said one does not hear in an interview with a Strip player.
One question: Does Stevens still own the 51s? It was scheduled to be sold to Milam, but that was always sketchy to me. http://baseball.wikia.com/wiki/Las_Vegas_51s .

This is why Stevens can pursue his Vegas vocation/avocation: http://www.coldheading.com/corporate-brochure.pdf

The Sahara discussion was interesting, a day after I read that Sam Nazarian is opening a Hyde Lounge in the Miami Heat's American Airlines Arena and has plans to expand into other arenas. He can do this with a lot less capital than would be required to do anything with Sahara. Count me with the Vegas Gang in not believing Sahara will re-open in 2014. http://www.businessweek.com/news/2012-04-18/miami-heat-teams-with-sbe-to-open-hyde-nightclub-at-arena

Just listened to Vegas Gang #76, four weeks late. Great episode. Really liked the AC info even though it was very sobering. Down 36%? Wow!

Since almost a month has passed, have Hunter, Chuck and Dave changed their initial views of The D?

The former Imperial Palace in Biloxi now goes by just "The IP." Someone correct me if I'm wrong, but I believe CET is now paying a licensing fee for the trademarks "Imperial Palace" and "IP" since they sold the Biloxi property to Boyd.

I can't imagine they want to continue forking over that cash, so the "IP" name is going to disappear from Vegas for good, I believe.

I love the idea of returning it to the "Flamingo Capri" name. That's outstanding. And if the LVH eventually gets bought out by the Strat's owners and renamed back to "The International"? Awesome. Then let's just convince Boyd to rename Echelon back to Stardust, and I'll be happy.

Plebians Palace? ;-)

I like the Capri thought as I read your article I kept thinking, could they just fold the rooms into Harrahs and Flamingo and be done with it, but I think it would hurt them.

I think they lose the opportunity to make a splash with some free publicity, and it just takes too long to explain to people that you maybe booking Harrahs/Flamingo, but you'll essentially be staying a block away (albeit indoors).

I like the idea of the Flamingo Capri, more then any of the other choices at the moment. I remember at one point, CET seemed to indicate that they wanted to brand the Flamingo more, but it appears that got pushed to the side.

The O'Sheas angle makes the most sense seeing as to the amount of PR they've been doing in the last few months in regards to its' closure at it's current location. Instead of it operating on the Flamingo's gaming license (as it was an annex of the Flamingo), they use the Imperial Palace license.

The only other name option they might pull from their portfolio is Roadhouse, which is what they renamed the Sheraton Casino & Hotel in Tunica. But in some respects, that may not entirely mesh with their plans, although it would be a fitting tie-in with Toby Keith's establishment at Harrah's.

Or they could rename it something completely out of left field and wasn't on anyone's radar.

Though I hadn't thought about the Horseshoe, which sounds like a good idea, I am willingly to bet that it's going to continue the latest trend in poor branding and go with "The IP." The guys at Caesars just aren't that slick and it wouldn't surprise me if they were the only ones in Vegas who thought "The D" was just sheer brilliance.

Eric--I fixed it. Thanks for pointing that out.

I'm glad that no one thinks that "IP" is a viable name. It's just too close to fifth grade punchline material.

They'd probably lampshade it by launching an "IP Daily" blog.

I like the discussion, but I have to admit, I'm having the same problems it appears Caesars is in deciding on a name. I agree with your assessment, if it was going to be a Horseshoe they'd have already decided on it, and since I don't think the inside of the IP is going to be redone in any meaningful way, I think that's out. I'm partial to Linq or Osheas at this point, although I'm holding out for something inspired.

Keeping in mind the current direction of Caesars Entertainment, how about:

Debtors Prison. They could even be trendy and just call it the DP.

I'm gonna have to give the Apple Casino a big thumbs down... Though I'd love it if they put phone chargers in the slot machines anyway...

We'll be discussing this on the next podcast. Fun topic.

Or, Jean-Paul Sartre

Jimmy "Buffett." Two T's.

I was wearing a Buffett shirt one time and a waitress asked me, where's "Jimmy's Buffet?"

As I look at the neighbor properties I keep thinking of "Satre". Maybe they coul say "This is the only casino we would put his name on"?

I vote for Linq Las Vegas. It rolls off the tongue and already has some name recognition from the publicity surrounding the wheel. Rendezvous doesn't sound to me like a mid-market name, and Horseshoe should be saved for a better property.

As Elvis would say, Viva Linq Las Vegas!

I think Horseshoe has to be the favorite if they keep the name in house. The national branding would make a lot of sense.

I think co-branding is a distinct possibility. Much like Nobu, it brings a whole other marketing arm in to help sell the property. Co-branding could be with something as simple as a hotel chain or restaurant or something drastically different (doubtful), but I think Caesars likes having outside partners.

Thanks Dr. Dave, it definitely helped me get a clearer picture of what you thought. I think you are right on with that.

If there is one thing I think the recession should have taught the operators on the strip is that there is a middle base that is potentially under served on the strip. In some senses that base was catered too during the recession, but I still believe that forward thinking properties would have a chance at building some brand loyalty if they only took a look at the market. (I fear the Riv. is too late to the game, given what's happened down there, but hoping it does work out)

I do understand that downtown is becoming a very solid alternative, but I do think there is a segment that prefers the feel of a 1500+ room resort with the amentities it can offer and downtown still lacks certain resort style amentities as a whole.

"While the SLS Hotel in Los Angeles is one of the most beautiful hotels I've ever seen"

seriously? did we go to the same place? all style no substance... and "too smart for its own ironic good" style.

Posted by Dave

^ My first thought is, what they already had, with some hands-on management and a modest renovation--freshening up the rooms and public areas, improving the restaurants, and creating a more ambitious entertainment program. In other words, you'd have to give reason a people to stay there.

It would have been rough going 2008-10, when room rates all over town were low, but now that they're picking up it would be well-positioned.

Now that the place has been gutted, I don't even know what a simple renovation would cost. I didn't see for myself, but the liquidation guys said they were selling off the escalators and other big, expensive things like that (Yet the roller coaster is still there. Strange.). So with the place absolutely empty, and now out of action for almost a year, I don't know whether it would be worth it to bring it up to a four-star standard.

I think value proposition is the way to go--working together with Circus, the Strat, the LVH, and the Riviera, you could do some interesting things down there. I'd also explore a shuttle to Downtown, playing up the property as the northern terminus of the monorail. Maybe charge $2 for the shuttle, but give them a $5 matchplay or $5 slot freeplay when they get back? At least you'd grow your database.

The Palmer house is a great example. Absolutely ancient, I was always worried when I plugged my computer in, I was going to short out the entire floor.

Very nice analysis, Dr. Dave. I do have a question though, what would work at that location for a resort?

^^Exactly. I was saving this for the Vegas Gang, but I'll share some of it now: in other markets, the Sahara would be considered a relatively new building and its rooms relatively big. I stayed at the Palmer House in Chicago once. Ancient rooms, literally just a little bigger than the bed: $209/night conference rate. Think of what you'd get in Las Vegas for that.

So while Sam's plan--to rehab an older property, kicking the luxury level up--would work well in other markets, it doesn't make a lot of sense in Las Vegas, with a few exceptions (Cabana Suites at El Cortez jumps out at me). Even at the El Cortez, the managers were very realistic about their expenses and their post-renovation pricing, which is why the property is a success.

While the SLS Hotel in Los Angeles is one of the most beautiful hotels I've ever seen and the hip have shown they don't always mind staying in small rooms if the place has cachet and a hot nightclub (check out the W Hotel in NYC for instance), we've already seen Sammy's business plan in action in a much better location. It's called The Cosmopolitan and it's not exactly raking it in!

I was gonna try to be offended on behalf of all the hard working Las Vegas anaylists, then I got to thinking of some of the idotic crap we've seen them throw out in the past 8-10 years that I've been following it closely. I reealized...I got nothin.
Defending Nazarian is almost impossible, but with the analyists thrown in, I just gotta cry "Uncle". Wonder what else I can get worked up about?

Posted by Hunter

In addition to Vegas stuff, I also follow Apple very closely and one thing I've learned is that most analysts are either morons or liars.