Feb. 01, 2006
Copyright © Las Vegas Review-Journal

Station focus away from Strip
Company reports earnings rise, says it will concentrate on NLV, Reno plans
By HOWARD STUTZ
GAMING WIRE

Construction continues Tuesday on Red Rock Resort, a Station Casinos project. Station said the $925 million hotel-casino will open April 18, about three weeks later than originally expected.
Photo by Clint Karlsen.

With gaming operators planning an estimated $25 billion in development along the Strip over the next decade, Station Casinos will turn its full attention toward expanding its already dominant local casino base to capitalize on the expected economic upturn fueled by the growth.

That means construction plans for the company-owned 67 acres near the Strip would be shelved in favor of building casinos in North Las Vegas, along the expanding Interstate 215 corridor and in Reno, Station Casinos executives said Tuesday during a fourth-quarter and year-end earnings announcement.

In addition, the company announced the first phase of $925 million Red Rock Resort will open April 18, about three weeks later than originally anticipated. "We only have one chance to make the best impression possible, so if it takes a couple of extra weeks to train the staff and make sure everything is ready, then we're willing to do that," Station Casinos Chief Financial Officer Glenn Christenson said following the company's quarterly conference call with analysts and investors.

In announcing earnings, the company said its net income was $41.7 million in the quarter ended Dec. 31, a 9 percent increase compared with $38 million a year ago. For 2005, the company's net income was $161.9 million, a 59 percent increase compared with $66.6 million in 2004.

Station Casinos' basic earnings per share in the fourth quarter were 63 cents. While analysts polled by Thomson First Call predicted the company would earn 64 cents per share in the quarter, Station Casinos officials said when its earnings were adjusted to accommodate interest charges for vacant company-owned land awaiting development and construction expenses, the diluted earnings per share were 69 cents in the quarter.

For all of 2005, the company said its basic earnings per share was $2.46, up from $1.03 earnings per share in 2004.

The company said its fourth-quarter net revenues were $285.1 million, a 7 percent increase compared with $264.7 million a year ago. For the year, net revenues climbed above $1.1 billion, an increase of 11 percent compared with $986.7 million in 2004.

Station Casinos said its cash flow -- defined as earnings before interest, taxes, depreciation and amortization -- was $123.9 million in the fourth quarter, an increase of 16 percent compared with $107.1 million a year ago, and $480.9 million for 2005, a 25 percent increase compared with $385.4 million in 2004.

When it is unveiled in less than 12 weeks, Red Rock Resort will be the company's 15th Southern Nevada casino. Red Rock will open with 400 hotel rooms, nine restaurants and other entertainment offerings, as well as a casino with 3,000 slot machines, about 500 more than previously anticipated. Red Rock Resort's second phase, another 450 hotel rooms, is expected to open by the end of the year.

Once Red Rock Resort is up and running, attention will be directed toward building a planned $400 million to $450 million hotel-casino in the North Las Vegas master-planned community of Aliante that Station Casino's will co-own with an affiliate of the Greenspun Corp. The companies have a similar 50-50 relationship in the Green Valley Ranch Resort.

Christenson said the partnership wants to put Aliante Station at the head of the development curve.

"(Aliante Station is in) a tremendous location in a rapidly growing part of the valley," Christenson said. "We have a lot on our development plate."

Including Red Rock Resort, Station Casinos now has more than $1.2 billion in development projects. Three in-progress construction projects are parking structure expansions at the Santa Fe Station, Green Valley Ranch and Fiesta Henderson.

While Aliante Station is expected to break ground by early 2007, the company's other development opportunities -- at Durango Road and Interstate 215; at Cactus Boulevard and the Strip's southern end; and on the 33-acre site on the Boulder Highway where the Castaways was imploded last month -- will all be planned without any development timetable. The company also plans to develop two casino sites in Reno, which will also figure into the mix.

"It allows us to make a decision based on the economic market," Christenson said. "The key thing is flexibility. We can do the project that will provide the most shareholder value and we can pull the trigger when business conditions are appropriate."

The company's major change in plans was to delay development of a 67-acre parcel west of Interstate 15 near Tropicana Boulevard and Industrial Road, dubbed Project W by the company, that houses the Wild Wild West.

With Las Vegas economic analysts predicting widespread economic growth over the next few years, jump-started by Strip casino development projects, Station Casinos said building more local casino properties catering to an expected residential population boom makes the most sense.

"Whether it's one year or five years, Wild Wild West will always be there," Christenson said. "It's going to be very difficult for someone else to assemble 67 acres that close to the Strip in the near term."

Gaming analysts said they supported the company's decision to focus on new local-themed properties.

"We remain fans of the local Las Vegas gaming market, which we believe is the best risk-adjusted market in gaming today, and we can't fault the company for deploying capital in these markets," John Mulkey of Wachovia Securities said in a note to investors.

Christenson added that the company has a $2 billion credit line to fund capital improvements.

Jan. 30, 2006
Copyright © Las Vegas Review-Journal

World Market Center ready for second show
Organizers expect 40,000 to 50,000 to attend
By CHRIS JONES
GAMING WIRE

Ashley Pendry, the showroom designer for Minka Group, arranges the vendor's lighting display in preparation for this week's local furniture market at the downtown World Market Center.
Photos by Ronda Churchill

The 10-story World Market Center will host an estimated 40,000 to 50,000 furniture industry representatives at the Las Vegas Market beginning today and running through Friday.

Hot on the heels of a multiyear courtship that produced a surprisingly hot-and-heavy first date, World Market Center is again dressed up and primed for action.

Whether this week's second round of furniture industry matchmaking will top July's inaugural event remains to be seen.

But leaders of downtown Las Vegas' planned $2 billion furniture showcase are confident they'll see plenty more deals consummated around town this week.

"We don't really know what to expect, but we tend to think it's going to be as strong as our first show," Dave Palmer, World Market Center's general manager, said last week. "Buyers wrote orders. They got into a feeding frenzy."

Las Vegas residents are still largely unfamiliar with World Market Center's purpose. But they undoubtedly recognize its signature 10-story tower southeast of the Interstate 15-U.S. Highway 95 interchange, as well as an adjacent 16-story steel framework rising next door.

Both are early portions of a proposed eight-building, 12 million-square-foot furniture and home product showplace that already draws manufacturers and retailers from around the world to biannual markets, or "marts."

The events are closed to the public, but generate big business for manufacturers such as Broyhill Furniture and Tempur-Pedic, and buyers who represent retailers such as Levitz and R.C. Willey Home Furnishings.

World Market Center's founders, Los Angeles businessmen Jack Kashani and Shawn Samson, have worked for six years to woo the industry away from its historic showplaces in San Francisco and High Point, N.C.

So far, their efforts seem to be paying off.

Attendance estimates for last summer's debut Las Vegas Market varied, with published figures between 53,000 and 70,000.

Actual attendance was closer to 60,000, spokeswoman Dana Pretner said last week, adding variations stemmed largely from numerous pre-registrants who did not attend.

This week's event, which runs today through Friday, is expected to draw 40,000 to 50,000 people.

July's show received a boost from its partnership with the Association of Woodworking & Furnishing Suppliers, a sister trade show at the Las Vegas Convention Center.

That convention will not recur this week.

Palmer said July's event also benefitted from a "new market excitement" that may not carry over to the winter show.

Still, the Las Vegas Convention and Visitors Authority said World Market Center will generate $90.1 million in nongaming visitor spending this week.

Kevin Bagger, the authority's marketing and research director, based that figure upon projected attendance of 62,000.

Shortly after July's event, World Market Center management hired an outside consultant to rate its market and recommend changes.

The consultant's 27-page report produced several likely improvements, most notably a relocated and enlarged registration tent, additional food outlets with reduced prices, and 100 shuttle buses rather than July's 80.

"And they'll be running more frequently," Pretner said of the shuttles, which link World Market Center's downtown campus with numerous Strip hotels and downtown's Golden Nugget.

The Las Vegas Convention Center was unavailable this week, so the Las Vegas Market's off-site displays were shifted to Mandalay Bay.

Downtown's 10-story tower will house 230 permanent showrooms, with 200 more exhibitors placed in temporary tents nearby.

Mandalay Bay will host 600 more exhibitors.

Overall, "Furniture Week" events will occupy more than 1.5 million square feet of exhibition space.

"That's an unusual statistic we don't usually track, but this is an unusual show," Bagger said of the multivenue gathering.

Jan. 21, 2006
Copyright © Las Vegas Review-Journal

Miss Idaho claims community service honor at pageant
19-year-old awarded for promoting breast cancer awareness
By KATHLEEN HENNESSEY
THE ASSOCIATED PRESS

Miss Idaho Tracey Brown won the Miss America pageant's Quality of Life community service award Friday for her work promoting breast cancer awareness.

Brown, 19, has raised $8,000 for the American Cancer Society and is working with state lawmakers to create a special license plate to raise money for breast cancer research.

Miss Oklahoma Jennifer Berry was the runner-up for her work with programs to prevent drunken driving. Miss Alabama Alexa Jones, an advocate for arts education, was named the second runner-up.

The Quality of Life honor is given to the contestant who shows she has improved others' living conditions through service. All 52 women competing for the crown this week in Las Vegas applied for the award.

The winner of the pageant will be named tonight at the Aladdin in a show televised on Country Music Television (Cox cable Channel 57) at 8 p.m.

Brown, a student at Whitworth College, says she wants to be a broadcast news anchor. She said her service work, which won her a $3,000 scholarship from the Atlantic City-based Miss America Organization, was inspired by her mother, a breast cancer survivor.

Berry, 22, a student at the University of Oklahoma, won a $2,000 scholarship. In 2005, she started a teen drinking prevention program after a friend died in a drunken driving accident.

Jones, 24, will take home $1,000 to use for her education at the University of Alabama. At 18, she founded a nonprofit group that brings performing and creative arts education into schools.

Last year's Quality of Life award winner, Miss Alabama Deidre Downs went on to be crowned Miss America 2005.

This is the first year the pageant has taken place outside Atlantic City.

Jan. 17, 2006
Copyright © Las Vegas Review-Journal

TOURISM: Easing of travel rules could aid LV
Federal push expected to make it easier for foreigners to visit U.S.
By CHRIS JONES
GAMING WIRE

The Macau Lion Dancers perform outside the Fashion Show mall in August. A federal government plan to ease travel restrictions to the U.S. could bring more foreign visitors to Southern Nevada. Photo by Craig L. Moran.

A federal push to ease restrictions on foreign travel expected to be announced today could bring more big-spending international visitors to Nevada and Las Vegas, state travel leaders said Monday.

Tension between the State Department, which works to improve the nation's image abroad; and Homeland Security, which often upsets foreigners when tightening America's borders; has been increasingly common after 2001's terror attacks were launched by foreigners within the United States.

Despite continuing security concerns, many U.S. leaders have called for a more welcoming approach to global travel at the federal level. And fortunately for American business interests, such change could soon be under way.

U.S. Secretary of State Condoleezza Rice and Homeland Security Secretary Michael Chertoff have scheduled a press conference today at 7: 30 a.m. PST, according to the Travel Industry Association of America, a Washington trade group.

Efforts to confirm the event's subject through the departments were unsuccessful Monday because of the federal holiday.

But the White House Bulletin, a McLean, Va.-based subscription service, reported that the Cabinet members will unveil a comprehensive program designed to ease foreign travelers' access.

Plans include "model airports" with streamlined customs procedures and greeters who will assist travelers in their native language. Public Diplomacy Watch, a tourism Web log, speculated that a new international registered traveler program could also result.

Bruce Bommarito, a TIA board member and director of the Nevada Commission on Tourism, said today's expected changes would open the nation's door "quite a bit more."

"We always support security and safety in our country," Bommarito said by telephone from Los Angeles. "But beyond that, we really think that we need to improve our public image around the world and make it much easier for the right people to travel here."

Rossi Ralenkotter, the Las Vegas Convention and Visitors Authority's president and a fellow Travel Association board member, added, "Whatever can be done to eliminate some of the red tape ... is important for Las Vegas."

Increased foreign visitation could have a huge financial effect on Nevada's travel-dependent economy.

The convention authority estimates that Las Vegas hosted more than 3.37 million international travelers in 2004, its best annual total since 2000's reported 4 million; with marketing programs growing overseas, it hopes to lure nearly 6.5 million by 2009.

Separately, the U.S. Department of Commerce in June said Nevada's nearly 1.63 million overseas travelers ranked fifth among U.S. states and territories in 2004. That ranking did not include visitors from Canada and Mexico.

For the past few years, the state tourism commission has aggressively promoted Nevada before millions of potential Chinese travelers. Bommarito's group has led multiple trade missions to Asia, and oversaw June 2004's opening of the first state-sponsored tourism office in Beijing.

Changes are already under way to improve Chinese access to U.S. travel visas, Bommarito said, including extending visas from six months to one year and allowing mail-in renewals. The Chinese government recently told him 480,000 U.S. travel visas were issued to Chinese through October of last year, up from approximately 280,000 in all of 2004. He expects that figure will top 1 million next year.

Extensive paperwork and lengthy visa processing are frequently cited as obstacles to U.S. travel, Ralenkotter said. Citing high foreign attendance at this month's International Consumer Electronics Show as an example, he said improved access could also bolster the local convention industry.

"The (federal) dialogue is important as we go forward because we're in a global economy and a global travel economy," Ralenkotter said.

He credited the Travel Association and its affiliated Travel Business Roundtable for raising awareness at the "highest levels of government."

The Commerce Department said foreign visitors to the United States dipped from 51 million in 2000 to 49 million last year. Many experts blame post-Sept. 11 visa restrictions and anti-American sentiment among many foreign travelers.

The World Tourism Organization also reported last year that the United States hosted 6.1 percent of international arrivals worldwide in 2004, below its 1992 peak of 9.4 percent.

Jan. 06, 2006
Copyright © Las Vegas Review-Journal

HOUSING MARKET: Investor homes raise concern
Appreciation rates catch attention of economists
By HUBBLE SMITH
REVIEW-JOURNAL

Chief economists from the housing and financial industries expressed concern Thursday about the number of investor-owned homes in Las Vegas.

Investors nationwide accounted for about 23 percent of new home loan originations last year and Las Vegas is probably closer to 35 percent to 40 percent, Frank Nothaft, chief economist for Freddie Mac, said Thursday during a conference call held by Washington, D.C.-based Homeownership Alliance.

"Las Vegas generally runs above the national average in investor and second-home purchase activity," Nothaft said. "It's beginning to raise flags."

He worries about housing markets that have shown 20 percent appreciation rates over the last two years, attracting investors and second-home owners, and Las Vegas falls into that category.

"What will happen in Las Vegas? It's hard to say. The entertainment industry has been very strong and you've got large immigration and employment growth, well above the national average," Nothaft said. "So you have an increase in house prices, but it's related to the influx of new residents and job growth. But certainly that's a market that you should use some caution in the coming years."

Paul Merski, chief economist for the Independent Community Bankers of America, said Las Vegas hasn't had the sharpest price appreciation in the nation. Compared with markets such as Naples, Fla., and parts of California, Las Vegas prices are still relatively cheap, he said.

"I know Fortune published a calculation of the most overpriced markets and Las Vegas was still down on the list. Las Vegas is 38 percent overpriced compared with Naples that's 84 percent overpriced," Merski said.

"Especially compared with the Southern California coast, Las Vegas still looks very affordable," Nothaft added, "but for people that are living there, I think they are really beginning to feel the pinch."

The housing market, both in terms of prices and sales, has begun to slow modestly as mortgage interest rates have climbed steadily, the economists said.

"The slowdown amounts to a tapping of the brakes on a hot market," National Association of Realtors Chief Economist David Lereah said. "Home sales are coming down from the mountain peak, but they will level out a high plateau -- a plateau that is higher than previous peaks in the housing cycle."

Single-family housing starts will probably be down about 7 percent in 2006, said David Seiders, chief economist for the National Association of Home Builders.

He forecasts one more quarter-percent interest rate increase from the Feds at the board's Jan. 31 meeting, taking the prime rate to 4.5 percent, with 30-year fixed-rate mortgages going from 6.2 percent to 6.7 percent by year's end.

The housing industry is most sensitive to interest rate increases and a higher rate will take some of the investors and speculators out of the market, Seiders said.

"Housing turns from being a powerful economic driver to a drag on gross domestic product in 2006," he said.

Separately, energy prices, catastrophic events, consumer spending and business downturns are a few factors that could significantly affect the U.S. economy and housing market in the new year, potentially resulting in increased foreclosures, the Foreclosure Economic Advisory Council reported.

The new bankruptcy law that took effect in October is also poised to become a major factor for mortgage financing and homestead protection.

"The direction of the economy, and housing, in particular, will most likely be sensitive to what happens in the foreclosure industry," Boca Raton, Fla.-based FEAC said.

The foreclosure industry in the West has remained stable and quite low, with only 19,363 active foreclosures from September 2004 to September 2005.

Rapid real estate appreciation and healthy job markets, combined with high demand for a limited supply of homes, have worked to the benefit of homeowners in Western states.

"Homeowners in the West, who are in default, are keeping the region's foreclosure inventory from growing by meeting their financial obligations prior to final foreclosure action," the report said.

Dec. 30, 2005
Copyright © Las Vegas Review-Journal

NEW YEAR'S EVE: Party gathering steam

Businesses, drivers eager to cash in

By CHRIS JONES
GAMING WIRE

Greeters and drivers wait Thursday for arrivals at McCarran International Airport to shuttle them to hotels. About 300,000 visitors are expected for the holiday weekend.
Photo by John Locher.

The scene Thursday at McCarran International Airport was reminiscent of this summer's surprise hit motion picture "March of the Penguins."

One by one they lined up, dressed penguinlike in their black-and-white tuxedos. Dozens of limousine drivers from resorts such as Bellagio, Tropicana and The Hotel at Mandalay Bay, each awaiting their turn to ferry incoming visitors to their Las Vegas playground of choice.

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Unlike the movie, actor Morgan Freeman wasn't on hand to narrate.

But his absence in no way means this New Year's Eve in Las Vegas will not become a blockbuster.

"They tell me it's supposed to be busy," Gene Sherow, a driver with Bell Transportation, said with a smile as he stood outside the airport awaiting his next fare.

Things have been slow this month, Sherow added. But he is eagerly anticipating the cash he will rake in during his first New Year's holiday as a Las Vegas limo driver.

Sherow's sense of pending spending isn't unique. Across the valley, businesses from hotels to restaurants, nightclubs to stores can't want for the pre-2006 party to get under way.

Robert Frey, owner of the Pure nightclub at Caesars Palace, said New Year's Eve brings out the biggest of big spenders.

"Each of our tables goes between $5,000 to $10,000," Frey said. "Supply and demand creates limits. We have 88 tables, and they're sold out. If we had 188 tables, we would have sold them, too."

Pure sold out 3,000 New Year's Eve party tickets, which do nothing but get patrons in the door, at $250 a pop.

The club will mark its one-year anniversary Saturday, an occasion Frey and company will mark with socialite Nicky Hilton and her boyfriend, Kevin Connolly of the HBO series "Entourage."

"We've purchased one of the five largest bottles of Cristal ever made," Frey said, referring to a 15-liter champagne behemoth created for the recent millennium celebration.

Hilton plans to pop the cork at midnight, proving stars and businessmen are not above Las Vegas' freewheeling charms on Dec. 31.

"There's no other night like this," Frey said.

Hotel room rates have skyrocketed this weekend as travelers clamor to get in on the action, and other celebrity events abound, including rapper Kanye West's Saturday concert at the Aladdin and Kid Rock's set behind the turntables at Jet, The Mirage's new nightclub.

Approximately 300,000 visitors are expected in town each day this weekend, up 2.4 percent from last year's level, John Piet, senior research director with the Las Vegas Convention and Visitors Authority, said Thursday.

The city's 134,000 guest rooms will be 98 percent occupied, with visitors' nongaming economic effect projected at $187 million.

Last year, the city had 293,000 visitors per day over New Year's weekend, which kicked off with a Friday observance of the federal holiday.

Local guest rooms were 97.8 percent occupied, and visitors spent $176.1 million on nongaming goods and services, Piet said.

The weekend guests include Brian and Eve Richard, who left their suburban Detroit home early Thursday to start their first Las Vegas vacation.

Asked why they chose to spend New Year's in Las Vegas, Brian Richard said, "It's warmer than where we're from."

Before they fly home Sunday, the Richards said they will see some shows, gamble a bit and check out the local nightclub scene. And on Saturday night, they will be among the mass of revelers who will ring in 2006 watching fireworks above the Strip.

Another young couple from the Midwest, identified only as Greg and Jennifer, arrived Thursday from St. Louis to celebrate Greg's 21st birthday earlier this month and Jennifer's recent graduation from Southern Illinois University-Edwardsville.

Jennifer, 22, said she wants to enjoy the city's many sights. But Greg's goals for New Year's weekend didn't exactly coincide.

"I couldn't care less about seeing things," he said. "I just want to gamble and get drunk."

But both plan to be outdoors on the Strip at midnight Saturday.

Dec. 29, 2005
Copyright © Las Vegas Review-Journal

LAS VEGAS TOURISM: McCarran count tops 40 million
Passenger tally on pace to break record of 2004
By CHRIS JONES
GAMING WIRE

For just the second time in its nearly 60-year history, McCarran International Airport has exceeded 40 million annual passengers, the Clark County Aviation Department said Wednesday.

Through November, the Las Vegas gateway hosted more than 40.7 million arriving and departing passengers, up 6.9 percent from its 2004 pace.

McCarran last year handled nearly 41.5 million passengers, a record it should easily exceed once this month's passenger traffic has been reported. In addition to Christmas travel, December's big draws include the National Finals Rodeo and various concerts and events surrounding this weekend's New Year's holiday.

Airport leaders have long contended construction of new resorts and visitor attractions is driving air traffic here.

In 2005, hotel-casino operators and condominium developers alone spent nearly $4 billion adding 3,800-plus guest rooms and 501,000 square feet of meeting space to Las Vegas' already sizable inventory.

And people continued boarding planes to see this city's latest and greatest.

November traffic at McCarran topped 3.6 million passengers, up 6.6 percent from a year ago.

The top local carriers were again Southwest Airlines and America West, which McCarran will continue to track separately from US Airways until the recently merged carriers consolidate their passenger reporting systems.

Dallas-based Southwest reported 1.14 million November passengers, up 7.4 percent. Year-to-date, its Las Vegas count was up 6.4 percent to 12.7 million.

Tempe, Ariz.-based America West enjoyed 7 percent November growth with 615,682 passengers. Through Novem-ber, its count was up 12.2 percent to just over 7 million.

Third-place United Airlines also enjoyed a solid November with 266,328 passengers, up 3.7 percent. Year-to-date, its Las Vegas count was up 3.4 percent.

American and Delta rounded out the top five despite decreased monthly and annual traffic.

Fort Worth, Texas-based American reported 208,266 monthly passengers, down 2.1 percent. Its annual count of 2.35 million was off 1.4 percent.

Atlanta-based Delta reported an 11.8 percent decline in November, while year-to-date its count was off 3.6 percent.

Industry analysts suggest so-called "legacy carriers," including United, American and Delta, are increasingly shifting aircraft toward long-haul flights, often to foreign cities.

Such moves can avoid competition with low-fare carriers such as Southwest, America West and JetBlue Airways, which typically have lower operating costs.

Las Vegas is a bastion of low-fare service because of its heavy emphasis on leisure travel.

THE TOP FIVE CARRIERS OF 2005 AT McCARRAN INTERNATIONAL AIRPORT

Carrier Passengers Annual percent
change
1. Southwest Airlines 12,706,412 6.4
2. America West 7,013,976 12.2
3. United 3,039,281 3.4
4. Delta 2,462,998 -3.6
5. American 2,353,483 -1.4

SOURCE: Clark County Aviation Department

Dec. 22, 2005
Copyright © Las Vegas Review-Journal

THE STRIP: Show time for South Coast
Built-in audience will greet new hotel-casino by Boyd Gaming
By HOWARD STUTZ
GAMING WIRE

South Coast dealer Angela Newman practiced dealing pai gow poker Wednesday at South Coast. The hotel-casino will open tonight with an 80,000-square-foot casino that includes a 60-table gaming pit.
Photos by Clint Karlsen.

South Coast housekeeper Ana Hernandez polishes furniture in a guest room Wednesday. The hotel-casino will open to guests tonight.

South Coast dealer Candace Webb throws the ball on the roulette wheel as other dealers bet during a test run of the hotel-casino's table games Wednesday. Boyd Gaming execs expect big crowds tonight.

When the fireworks are released tonight at 7 and the public can finally sample the offerings at the $600 million South Coast, the Strip will stretch to a destination Coast Casinos Chief Executive Officer Michael Gaughan, a lifelong Las Vegan, never imagined.

The Southern California-themed property, at the corner of Las Vegas Boulevard and Silverado Ranch Road, will open after a 20-month construction period and more than four years after Gaughan first purchased the land that would encompass the resort's 60-acre site.

When he was first convinced by Coast executives to purchase the real estate, there wasn't much surrounding the site.

The lights from the Strip, even the southern-most resorts of Mandalay Bay and Luxor, were far in the distance. As far as residents, only small ranch homes dotted the area, which is also near the once-popular Paradise Spa development.

Today, the nearby master-planned residential communities of Southern Highlands, Anthem and Silverado Ranch give the casino a built-in audience, as do several nongaming timeshare properties along Las Vegas Boulevard.

"It was strictly a real estate purchase because there was really nothing surrounding us," Gaughan recalled recently. "I had never flipped land before and we thought about selling it. Everyone told me to hold onto it, so I guess it looks like a pretty good purchase now."

During South Coast's planning and design, Gaughan sold Coast Casinos, including the Barbary Coast, Gold Coast, The Orleans and Suncoast, to the Boyd Gaming Corp. for $1.3 billion, creating what is now considered the industry's fourth-largest gaming company. The South Coast is the first Coast property to open under the Boyd banner.

On Wednesday, final preparations were under way to ready the casino for guests.

By opening three days before Christmas, a normally soft period for Strip casino visitation, the South Coast's 2,200 employees will be able to settle into their new surroundings. Gaughan's experience, however, tells him there will be crowds on opening night.

On Tuesday evening, a VIP party for guests of Boyd Gaming and Coast Casinos allowed friends and family to sample the menus at the South Coast restaurants, which, like the other Coast properties, don't stray too far from the corporate menu. A steak house, Mexican-themed restaurant, an Italian restaurant, a buffet, and an oyster bar all have names that play off the South Coast's Southern California theme.

The South Coast will open with an 80,000-square-foot casino that includes 2,400 slot machines, a 60-table gaming pit, a 300-seat race and sports book and a 600-seat bingo room.

As with other Coast-operated casinos, nongaming attractions include a bowling center and a movie theater.

South Coast also has at least 80,000 square feet available for casino and restaurant expansion. The initial 660 hotel rooms will more than double when a second hotel tower opens around April. A third tower could also be built.

"(A third hotel tower) is at least two or three years off," Gaughan said. "We have the footings poured for it already, but I'd like to build that through cash flow."

A portion of the South Coast's 150,000 square feet of meeting and convention space will be open tonight, but the bulk of the center, including the 4,400-seat equestrian events arena, will open by February. The arena, which can host 99 percent of all equestrian competitions, has booked 22 events for 2006 and 2007.

Dec. 15, 2005
Copyright © Las Vegas Review-Journal

Nevada restaurant growth tops nation, survey shows
By CHRIS JONES
GAMING WIRE

Paula Baldi carries food at Memphis Championship Barbecue. Restaurant growth in Nevada leads the nation, a survey shows.
REVIEW-JOURNAL FILE PHOTOS

From fast food to fancy fare, Nevada's restaurant industry is growing faster than anywhere else in the country, a new report shows.

Restaurants sales statewide are projected to top $3.73 billion in 2006, well above this year's $3.43 billion, the National Restaurant Association said Wednesday.

That 8.9 percent growth projection topped the nation, easily surpassing second-place Arizona's 8.1 percent, the Washington-based trade group said in its 2006 Restaurant Industry Forecast.

Thanks to solid increases in employment, disposable income and population, U.S. restaurant sales are expected to reach a record $511 billion next year, up 5.1 percent from 2005.

If that goal is met, it would be the first time the industry has exceeded the $500 billion dollar sales mark.

"It's pretty cool that we're No. 1, and not by a small margin," Paul Hartgen, president and chief executive officer of the Nevada Restaurant Association since mid-August, said Wednesday from Wynn Las Vegas, where he attended the annual Governor's Conference on Tourism.

Offering excellent experiences at the state's restaurants is key to maintaining Nevada's status as a world-class travel destination, he added.

"We're all one product," Hartgen said, referring to a Las Vegas travel industry that includes everything from hotel-casinos and shopping malls to nightclubs and Strip entertainers. "And the better we are as restaurants, the more we enhance that product."

Travelers account for approximately 40 percent of sales at fine dining restaurants nationwide, and 25 percent of U.S. casual dining sales, Hartgen said.

Success also stems from hungry locals. Paymon Raouf, who owns two Paymon's Mediterranean Cafe & Lounge locations in Las Vegas, said Wednesday he's not surprised Nevada's restaurant sales are projected to lead the nation.

In addition to an expanding visitor base, Raouf said Nevada's burgeoning population continually creates demand for new and different dining options.

"Every month there are 6,000 new people moving here, and they need to eat," Raouf said. "When people move in, we need more services like doctors and mechanics. And we need more restaurants and eateries, too."

The National Restaurant Association said the Mountain Region, which consists of Nevada and seven other states, is projected to enjoy 3.8 percent growth in disposable income and 2.8 percent growth in total employment next year. Both categories exceeded the projected national averages of 3 percent and 1.9 percent, respectively.

Nevada's population is also projected to grow by 2.9 percent, the National Restaurant Association said, citing another restaurant sales driver.

Sales improvements are projected in 49 states and the District of Columbia, with Mississippi expected to report the slowest growth rate at 3.5 percent. Neighboring Louisiana, which was considered one of the country's top dining destinations before Hurricane Katrina devastated New Orleans, is the only state where sales are projected to regress, in this case by 8.8 percent.

"Even with the challenges of rising energy costs and major hurricanes in 2005, the nation's restaurants are entering 2006 with a solid performance and optimism about the future," said Hudson Riehle, senior vice president of the National Restaurant Association's Research and Information Services Division.

Nevada ranked 30th in projected 2006 restaurant sales. California topped the list at $51.5 billion, followed by Texas ($30 billion), New York ($25.5 billion), Florida ($24 billion) and Illinois ($17.1 billion).