Wednesday, Nov. 16, 2011 | 5:23 p.m.
The hotel has grown almost boundlessly over the past 10 years in its physical structure and its readily recognizable brand: the Palms. “A Maloof Family Resort” reads the hotel marquee, a lasting nod to its founding family.
The Palms is still widely regarded as George Maloof’s place, similar to Wilbur Clark’s Desert Inn, a product of its founder’s thoughtful planning and vision, where two towers -- the Fantasy Tower and Palms Place -- and scores of sensational shows and events have been staged in its remarkable life span.
Ten years ago, Maloof was walking a very long red carpet at the front of the new hotel, a gala event remembered mostly by the appearance of starlet Paris Hilton, cloaked in a dress adorned with $1 million in gaming chips. “Play her on red!” someone shouted at that opening. It was a high time indeed on Nov. 15, 2001, but also an anxious moment. The Palms was the first major Las Vegas resort to open after 9/11. Skeptics wondered whether tourists who feared flying would come to Vegas for a new off-Strip resort.
Maloof and the hotel he built has prospered, survived, persevered and stands today -- with ample structural support. In June, Maloof finished negotiating an ownership restructuring that left his family with 2 percent of the Palms, as investment firms TPG Capital and Leonard Green and Partners assumed majority ownership -- at 49 percent apiece. In return, those firms assumed $400 million in debt accrued by the company during the recession. Over time, depending on the hotel’s profitability, Maloof’s stake could rise to as high as 20 percent.
Since that announcement, the ownership partnership has appointed industry veteran Joe Magliarditi, formerly of the Hard Rock Hotel and M Resort, as president. Maloof is chairman of the board of the Palms, and the management team includes two representatives of TPG and two of Leonard Green and Partners.
Maloof also maintains his position as the head of N-M Ventures, which owns the Palms, N9NE Steakhouse, Ghostbar, Rain, Nove Italiano, Playboy Club, Moon and the Stuff store, assuming that post as part of a settlement of a legal dispute between the hotel and night life operator Michael Morton.
Amid growth and challenges, success and struggles, Maloof remains unchanged from the night he opened the Palms. He still carries the same affable, approachable disposition he did a decade ago, when all this was still in front of him. On Tuesday, the Palms’ 10th birthday, he’s back at the hotel’s high-end gaming lounge, the Mint, wearing a light-blue dress shirt, dark slacks and his tousled, Maloof-ian hairstyle, which has become a look for all time. He talked of the past decade and plans for upgrading the hotel’s main tower and nightlife attractions.
The Kats Report: When you look at the timeline of the Palms’ highlights and signature events over the past 10 years, what goes through your mind?
George Maloof: When you look at it that way, it just goes by very quick. Things go by fast when you’re reading about them … It’s hard to cover it. There are some great moments. Really great moments … CineVegas (international film festival, which shut down two years ago), that 10-day period, was my favorite time, without question.
The thing about this property is that there have been so many. When you look back, don’t know if there has been a property anywhere in the world that has had more things happen than what has happened at the Palms. I really don’t. I can’t think of another one in Las Vegas, where so many monumental things have happened.
TKR: Has there been a single moment indicative of the hotel’s growth, or one “wow” moment that really stands out, where you thought, “We’ve really upped the game?”
GM: It was kind of challenging when we first opened because we had to get people used to coming here. In that first six months, there was a lot of anxiety. Not everything was right. We had to make changes. But the first month I felt really comfortable was probably June (2002). I felt then that the plan was working. It was about a six-month period. We had to make a lot of changes, we had to market right. It was probably that first June where we thought, “I think we’ve got it.”
TKR: Specifically, what did you do to turn that corner?
GM: We did a lot of things with our casino floor, with our slots, tweaks here and there that made a difference on the casino side of it. We were getting a lot of publicity, and that really helped. It’s kind of like what the Cosmopolitan is going through now, where you have that same type of buzz.
TKR: In a lot of ways, it seems the Cosmopolitan is to this point in time what the Palms was 10 years ago. They are similar in that there is a moment in time that it owns. The Palms was the first major resort to open after 9/11, and the Cosmopolitan is viewed as putting a bookend on the era of megaresorts in Vegas.
GM: Yeah, for the time being, that is true. There is some of the same feeling you have when you walk through (Cosmopolitan) that you had when we opened the Palms. I think there was maybe more buzz about the Palms when we opened. It was right after 9/11, and so there was just a lot of attention put on us. But there has been a lot of attention on the Cosmo, too. A lot of attention.
TKR: Ten years ago, we knew what you were doing: Opening the hotel. What about today? What is your typical day like?
GM: It hasn’t changed much, really. I get here. I still work with the employees. I’m still working aggressively toward what we want to accomplish in the next two to five years. I’m planning with Joe on that.
TKR: How do those meetings work, with you and Joe?
GM: They’re great. We just come up with what we feel needs to happen. … Once you make an announcement that you’re going to expand, you get everybody who wants to be involved throwing ideas at you. You have to figure out, through that, what you want to do. And that’s what we’re in the process of doing now.
TKR: Whenever there is a restructuring of ownership and authority at a resort, you wonder where the someone like you who has had ultimate authority is now positioned. Is it more of a cooperative plan of attack with you and Joe when it comes to enacting your vision?
GM: I think we both understand the property. He came on six months ago and has a good understanding of the property. I try to help out with a lot of the history. If we’ve tried things before and they haven’t worked, I let him know about it. Bringing in new people has helped. It’s given us a fresh look at certain things. I think that has been very important. As far as expanding, there are certain elements that we don’t want to miss and some you want to make sure your player base is attracted to. And, you just have to have an understanding of what the brand is about and how it expands and how it grows.
TKR: How do you mean?
- George Maloof is still the face of the Palms (6-30-2011)
- George Maloof: TPG partnership good for the Palms and family (6-27-2011)
- George Maloof: Little change in operations as family ownership hits 2 percent (6-21-2011)
- Maloofs will own just 2 percent of Palms (6-19-2011)
- Palms, TPG announce partnership to 'significantly reduce' debt (6-14-2011)
- George Maloof, Michael Morton reach settlement, part ways (1-4-2011)
- Palms owner George Maloof arrested on DUI charge (10-11-2010)
- Jeff Simpson: Palms Place condo tower will be a success (2-24-2008)
- Don’t bet against Maloofs (2-15-2007)
- Q+A: George Maloof (2-13-2007)
- Where fantasies come true (11-3-2005)
- Palms plans condo-hotel tower (3-3-2005)
- In his Palms: Turning 2, Maloof’s pride and joy is a major Vegas player (11-14-2003)
- Second tower at Palms is confirmed (9-8-2003)
- Palms opens tonight, competitors ready (11-15-2001)
- Station, Greenspuns to invest in Maloof family’s new casino resort(7-8-2000)
- Work to begin in June on Maloof’s Flamingo Road casino (11-3-1999)
- Who are the Maloofs? (4-2-1999)
GM: You don’t want to get too fancy with it, but you want to remember that we have a huge nightlife presence and at the same time a big locals presence. So, as we expand, we’ll expand for those two markets.
TKR: What can you tell people who live in Las Vegas, specifically, about what you have planned?
GM: We’re working on things that will appeal to our local base. ... And things that we’ll use to bring people off the Strip in terms of our nightlife.
TKR: What about Rain? That’s a nightclub that has been around since the hotel opened, and 10 years is a long time for a club to be open without upgrades.
GM: Well, might be time to do something there. But it still does very well, with its location off the pool. It needs something new, to be fresh. Ten years is an eternity for a club, but it has sustained itself.
TKR: As someone who has been the visionary and the face of the hotel for so long, when you have an idea to do something around the hotel and make a change somewhere -- something that’s going on in the lounge or a change in any of the amenities -- can you still do that? Can you still forge your vision on the property, or do you have to go through someone else?
GM: There are not a bunch of people we need to go through. I just talk to Joe or our partners. Not really a lot to change. We really want to expand. If I see something that’s wrong, it’s wrong. I have enough sense to know it’s not right.
TKR: If you have an idea for how something is designed, or how something should be positioned, or maybe an act you should bring into the hotel, and Joe disagrees with you, what happens?
GM: We just talk it through, like anybody else. That’s happened before Joe, where I’ve had certain ideas about things and the staff has come to me and said, “I don’t think it’s going to work. I don’t believe in it. It’s not the right act for that day.”
TKR: What about the Playboy partnership? That has been very important to the hotel over the past several years. Where does that stand now?
GM: We’re talking to Playboy about plans to maybe extend that agreement with them, because it’s coming due. We’re in discussions now. It’s due sometime next year. We’re looking at everything, ways to make it better, ways to maybe do it in different locations, evaluating all of it.
TKR: Is there a possibility of entering into a partnership that is not with Playboy?
GM: I wouldn’t say there’s a possibility of that. There’s been a little bit of speculation, but we have a good dialogue with those guys. I don’t know if that’s an absolute thing that would happen.
TKR: It’s been one of your most important partnerships, right?
GM: It’s been a great partnership.
TKR: I’ve heard there has been some housecleaning of Playboy Club staff. Any truth to that?
GM: We went in a little bit of a different direction with how we wanted to handle the dealers. So that happened, yes.
TKR: This was done in the context of it remaining the Playboy Club?
GM: Yes, right.
TKR: Talk about what the Pearl has meant to the growth of the hotel. It’s still one of the best venues for live performances in the city and has been very successful. How might it be used differently?
GM: It’s incredible. We’ve looked at some different things. You know, its true essence is as a live concert venue, so we’ve been pitched shows on a permanent basis, but none penciled out for us. I don’t know if we want to take away from the variety of what we have in that room. It works.
TKR: What types of shows have you been pitched? Are they primarily production shows?
GM: Yeah. More production shows. It’s actually bigger than most theaters. Most shows are in 1,500 to 1,600 seat venues. Pearl is 2,600. It’s a spectacular theater. We could do anything in that room. It’s really built for everything. All of the sight lines are perfect. The stage is nice. The sound system is great. We’ve looked at a few touring (production) shows and made some inroads toward that, but the numbers have not worked out. … But I’d like to see maybe a four-week run of something. If it goes beyond that, it might get a little tired with the local market we have, but maybe I’m wrong. We’ll try it. It certainly works at other places.
TKR: Are you satisfied, by your own standards, that the Palms is where you want it to be after being open for 10 years?
GM: It’s getting there. From a physical standpoint, I think it’s in good shape. I think we need to do things to the original tower. It needs to be redone, and we’re going to redo. But we’re trending right, the city, as things are getting better in town. That’s a good feeling. When the city got hit, we got hit. Now we feel we’re coming back, particularly on the room side. As we finish the tower, we’ll get a lot higher room rate, and that will help. (Phone) call volume and Internet volume, and the distance people book, those are the indicators.
Two or three years ago, we were booking big groups for next month. Now it’s spreading back out again, 90 days, 120 days, and that’s a very good sign. It shows confidence.
TKR: What about George here? Is your life going to be discernibly different in the foreseeable future than it has been over the past 10 years? Are you going to be able to explore anything that you haven’t in your personal life?
GM: Like get married or something (laughs)?
TKR: Whatever it is. I don’t want to use the “M” word. But in 10 years, you have been immersed in the Palms, living the Palms. You’ve had a lot of success and a lot of challenges. Is there a point where you think you’ll dial back a little bit and investigate another identity, another way of living?
GM: (Laughs) I haven’t thought about that, really, I haven’t. I’ve always looked at this as something more than a job, for sure. It’s part of me, and I really want to do what’s best for the property. I don’t really have a lot of needs. It’s not like I need to go buy a yacht and take multiple vacations. It’s just not in me.
TKR: You don’t see yourself as the type of mogul who will step away from the property for months off at a time?
GM: At that point, you might as well just retire because your mind’s not in it. You can’t go away for three months. Steve Wynn, when he goes away, he’s still focused. Michael Gaughan, same thing. In this business, you have to be there, you have to stay connected to it, or you can lose your edge pretty quickly. It’s so competitive.
TKR: You dropped a couple of names of people everyone has a lot of respect for in this industry, Steve Wynn and Michael Gaughan. They are different personality types, but they have similar roles at their properties. Who do you identify with at this point in your career?
GM: My style is a lot different from anybody’s, but with Steve, it’s the way he treats his customers and the way he focuses on the community. Michael, (Las Vegas Sun President and Editor) Brian Greenspun, a lot of respect for him, in what they have done for the community over the years. Bill Boyd, a lot of respect for the way he presents himself and, again, what he’s done for the community. These are guys who live, breathe and work it, and give back. Hopefully I’m in that same category. I am a guy who has lived it, breathed it and given back.
TKR: What is the biggest lesson you have learned over the past decade?
GM: It always comes back to the same thing: taking care of your employees and your customers. There’s no special formula. You have to be able to change, and you need new things. You need new technology. That’s really how you stay competitive so your people have the right tools. Not that I never knew that, but I am more assured of it now.
TKR: How are you with social media? I don’t think you have your own Twitter account or Facebook page.
GM: I don’t do Twitter. I don’t do Facebook. It’s too open. It’s too much information. I’m accessible to a point, but at that point it becomes more of a personal issue. I just don’t have the time. I can’t take time to tweet.
TKR: I remember the walk-through just before the opening of the Palms, when you handed out your cell phone number to everyone in the group who had toured the hotel. It was sort of a message, to come to you as the point person at the hotel. Are you still that way, 10 years later?
GM: Absolutely, absolutely. That hasn’t changed.
TKR: Do you foresee your family coming out of this experience at the Palms and developing another resort?
GM: I would like to do that at some point, somewhere. The partners I have now, we can work together on maybe doing something somewhere else. I think that’s important. You want to grow. You can’t just stay idle. What we’re doing at the Palms is very important, to get people in who haven’t been here. It starts here, and we’ll see what happens.