Joined: Jan 14, 2010
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May 16th, 2010 at 2:40:37 AM permalink
Hilton is now operating at a loss .

Now the entire northern strip (Palace Station, Stratosphere, Circus Circus, Sahara, and Hilton) is all running at an operational loss. It is hard to imagine that only three years ago this end of the strip was considered the primary focus of future development.

It would seem logical that if one of them closed there would be fewer hotels competing for the limited market. However, it may not matter as the market may get smaller and smaller as the place gets more and more depressing.

Local politics
While Stratosphere and Palace station are inside the city limits of Las Vegas, the rest of these hotels are in a town called Winchester which was one of these towns that sprang up in the 1950's to prevent the city from absorbing their territory. It is only 4.5 square miles and has only 27K residents. It essentially is the first mile outside of the city limits from Sahara Avenue to Desert Inn Rd.

The city has about 33% of the population of the county, but probably about 12% of the casino revenue. In the casino boom of the last 20 years, the city has only gotten three new casinos (Stratosphere, Suncoast, and Rampart) within the city limits. Most of the other casinos (Red Rock, Texas Station, and Alliante) are outside of the city limits. In their desperation to keep a tax base for the city, the council has dumped hundreds of millions into projects around Fremont street with Neonopolis being probably the most spectacular failures. Often times the city and the strip end up in direct competition (with the potential sports arena being one of the more visible areas of competition). One possibility is for the city to absorb Winchester. The city directors may re-focus their efforts on Winchester instead of Fremont Street. Winchester has been proposed as a possible location for the sports arena. If Winchester were part of the city, then the city would not view the arena as competition against Fremont street.
Joined: Oct 19, 2009
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May 16th, 2010 at 4:29:00 AM permalink
Quote: pacomartin

It is hard to imagine that only three years ago this end of the strip was considered the primary focus of future development.

By whom? Wall Street? The Politicians? The Speechwriters? Or the people who owned large parcels there and wanted to get out? Or the people who owned large parcels there and wanted additional development to make things even better for them?

Did the people who built the M Resort seven miles south of the airport share the "North End of The Strip is the Primary Focus" theory?

There was, if I recall correctly, alot of discussion about the North End of the Strip and even about North Las Vegas. Surely those uncompleted projects at the North end of the strip show that somebody plunked down big bucks in the belief for continued development there. Wall Street bankers halted those projects and turned it into a "blighted area" as far as tourists are concerned. I'm sure that somewhere, someone is working on assembling even larger parcels there!
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May 16th, 2010 at 6:45:02 AM permalink
I think the north end of the strip would have been pretty dazzling if Echelon and Fontainebleau were completed. It would have given people staying at Treasure Island, Mirage, the Venetian, and the Wyncore a people to walk north. The low end north end properties would flourish again as a cheap option in that area of town.

At this pace of the economy and with CityCenter opening up to massive losses, I think it will be at least 5 years before these projects are completed, best case scenario.
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Joined: Jan 14, 2010
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May 16th, 2010 at 6:55:06 AM permalink

There were at least 10 projects in some form of development.
(1) Obviously the Fountainbleau Las Vegas which began three years ago on April 2007.
(2) Echelon Project by Boyd. Stardust was imploded in March 2007.
(3) There was Crown Resorts who planned a 1000' skyscraper for the Wet & Wild Site (canceled on March 2008)
(4) On June 20th 2007 MGM MIRAGE and Kerzner International Holdings Limited announced that the companies have entered into a letter of intent to form a 50/50 joint venture to develop a multi- billion dollar integrated resort property on the Las Vegas Strip. Kerzner built the Atlantis Resort in the Bahamas.
(5) SBE planed a major redevelopment and expansion of the Sahara Hotel and Casino. The agreement to purchase casino was signed March 2007.
(6) Stratosphere was going to have some development (condos or something) on 17 acres of empty land. Agreement for purchase was April 2007 but settlement was following February 2008.
(7) The 555 Group was in the process of trying to assemble 27.3 acres of North strip land just south of the Riviera Casino. They applied to the FAA for height clearance for eight 572' towers.
(8) Marriot had a major plan for land near the Convention Center. The Residence Inn and a Courtyard Inn would have probably been torn down.
(9) Riviera was going to be purchased and torn down by Starwood Group and replaced. The stockholder of Riviera rejected the $17 per share price offered in 2006, and now the stock is trading at 40 cents per share. Starwood may acquire the property for almost the price of the furniture.
(10) A vague plan for replacing Circus Circus was publicly discussed. No renderings were ever released.

The Plaza Hotel on the New Frontier site does not technically meet my definition of the northern strip since it was south of Desert Inn road. It deserves an honorable mention.

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