It looks just like old times with casino projects, land purchases and plans for future development extending the Strip’s bustle north to the Las Vegas City line.
But unlike 2008, when the real estate bubble burst and the big casino projects with it, the activity today isn’t being led by Israeli businessmen and movie stars who don’t have a clue.
It is being led by people who know the gaming industry and who know Las Vegas and, in the case of Steve Wynn, a man who bats 1000 when he decides on a development project.
Consider the activity:
• Wynn buys 38 acres on the site of the former New Frontier for $336 million for undisclosed future development.
• New York developer Steve Witkoff and Miami firm New Valley buy the unfinished Fontainebleau for $600 million, rename it Project Blue and have begun making moves to complete the building.
• Genting Malaysia has finally started construction of Resorts World.
• Struggling SLS will have new life if Meruelo Group can renegotiate debt down to a level that makes operating the casino financially viable, thus justifying a purchase of the former Sahara.
• The Las Vegas Convention and Visitors Authority has begun a $1.4 billion renovation and expansion that will result in new buildings on the Strip where the Riviera recently stood.
• Golden Entertainment purchased the Stratosphere and intends to spruce up the property and its surrounding area near-term and long-term develop 15 adjacent acres.
• The city of Las Vegas reportedly is committed to rehabilitating the neighborhood north of the Stratosphere, which is the southern entrance to the city.
In addition, Wynn has begun construction of Paradise Park at Wynn Las Vegas, which will include a 1,500-room hotel, and Las Vegas Sands and Madison Square Garden plan to build the world’s largest concert arena with 17,500 seats.
All this activity promises to make the north end of the Strip as busy and exciting as the mid-to-south stretch.
For investors, this promises to be good news for the four public casino operators—Las Vegas Sands, Wynn, Genting and Golden Entertainment.
• Wynn will benefit because it no longer will be on the frontier. Project Blue and Resorts World will be to the north, creating for Wynn the kind of pedestrian traffic and cross-property visitation enjoyed by properties to the south.
Wynn will now also have 280 contiguous acres, enough to build a kind of Wynn World and transform what is almost a boutique operator into a Las Vegas presence comparable to MGM Resorts and Caesars, and larger than Las Vegas Sands.
And, as Steve Wynn has demonstrated, his projects make money for investors.
• Las Vegas Sands will benefit as the new surrounding development adds thousands of hotel rooms meaning customers for the concert arena and more convention activity.
• Genting benefits by adding what will be the company’s second-largest property after Resorts World in Malaysia, and you can bet Genting will cross-sell Las Vegas to its customers who stretch from southeast Asia to New York to Europe.
• Golden Entertainment’s Stratosphere will still be the northernmost property on the Strip, but no longer isolated, and will finally get the benefit of foot traffic, cross-property visitation and proximity to the new convention center complex.
As the smallest of the four companies, a north Strip boom would have the biggest impact on Golden’s stock value. The price Wynn paid for New Frontier land and the $7 million an acre the convention authority paid for the Rivera suggests $4 a share or more of value for Golden’s undeveloped land.
