Palms Casino Resort General Manager Jon Gray, who oversaw a massively expensive, and just completed redevelopment of the off-Strip casino hotel, has resigned.
Operating company Station Casinos, a subsidiary of publicly traded Red Rock Resorts, issued a statement on Gray’s departure, saying, “With the third and final phase of the redevelopment project having been completed in late September, Jon has elected to move on to the next chapter of his career.”
It added that “Jon will be greatly missed at the Palms. We are extremely grateful for his many valuable contributions to the property over the years and wish him the very best of success as he proceeds to his next challenge.”
Gray said, “It was time to go. It was time to move on. I was brought on to reposition the Palms and help rebuild it. I’m proud of what we have done with the project and now I am ready to move forward.”
Kord Nichols, Station’s senior vice president of operations, was appointed to fill in until a replacement is named.
Gray had worked at the Palms under founder George Maloof and later moved to Caesars Entertainment to oversee development of the Linq retail, dining and entertainment complex on the Las Vegas Strip. He was working as an executive with Nike in Oregon when he was lured back to the Palms in 2016 after Red Rock acquired the property for $312.5 million.
The redesign, 18 months in the making and with a price tag of $690 million, includes the addition of several ultra-luxury suites, an array of new celebrity chef restaurants, entertainment lounges and massive nightclub spaces, tens of millions of dollars of original artwork, new outdoor signage𑁋including a 272-foot-tall LED mesh wall that fills the whole Strip-facing side of one of the hotel towers𑁋and a complete redesign of the casino.
The investment community now is waiting for the return.
In its second-quarter earnings report, Red Rock blamed start-up costs and higher-than-anticipated operating expenses associated with the renovation for driving down cash flow.
SunTrust Bank gaming analyst Barry Jonas has since lowered his cash flow estimates for Red Rock “to account for continued margin pressure at the Palms property” as its business begins to ramp up following the construction disruption.
“While management has highlighted more margin pressure in the near-term with upward inflections expected in the fourth quarter and entering 2020, we are taking a wait and see approach,” he said in a recent client note.
