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December 18, 2014

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Fremont Street Experience helps downtown - some

Downtown casino revenues are up for the first time in four years, thanks in part to the Fremont Street Experience, but they still haven't reached where they were in years before the attraction was built.

Supporters of the four-block-long light and sound show say the trend is encouraging, especially given increased competition from the Strip, North Las Vegas and Boulder Highway casinos. With proper advertising and continued attention to the product, downtown casinos should continue to see more profits, they say.

Still, the numbers show a slow recovery.

Downtown casinos took in $678.6 million in 1996, the first full year the Fremont Street Experience was open. Profits in 1995 -- when the attraction was under construction and access to downtown was limited -- were just $625.6 million, the lowest level in eight years.

But profits in 1992, 1993 and 1994 were all higher than 1996, despite a three-year slow decline that prompted downtown casino owners to create the $70 million Fremont Street Experience in the first place.

"We'd all like to see it happening faster, I think," said Mark Brandenberg, managing partner of the Golden Gate hotel-casino. "Everybody would like to see more sooner. I'm pleased with what we're seeing."

Brandenberg said downtown as a whole had been suffering until the Fremont Street Experience came along.

"The Fremont Street Experience has taken a very important step in recapturing that share" of the gaming market, he said.

But if the huge canopy, which contains 2.1 million lights that at night project different computer-generated shows, has changed downtown, casinos also have changed.

For example, Boyd Gaming Corp. reopened the defunct Main Street Station in 1996 and continued upgrades to its other downtown properties. The Las Vegas Club, Binion's and Fitzgerald's are all undergoing renovations. And a city-financed garage now offers more parking spots.

In addition, the Stratosphere hotel-casino -- which opened in 1996 -- is included in the downtown figures, a fact that makes the $678.6 million figure look even more anemic.

But downtown operators say the Fremont Street Experience is part of a process, not the final product.

"Our view is the Fremont Street Experience has been a major plus for downtown," said Bob Kocienski, executive vice president of the Golden Nugget. "The increase in (gaming) numbers is strongly attributable to the Fremont Street Experience."

People will keep coming downtown, Kocienski said, if downtown casino owners keep investing in their properties to compete with other, newer casinos on the Strip and elsewhere.

"I think they'll continue to come," he said.

If the Fremont Street Experience is not bringing more money into downtown, it is certainly bringing more people. Mark Paris, president of the Fremont Street Experience Ltd. Liability Co., said his staff counts visitors to the street and sees steady crowds of 20,000 to 25,000 people each day.

That, Las Vegas Mayor Jan Laverty Jones said, is what the Experience is supposed to do.

"Our job with the Fremont Street Experience was to bring bodies," she said. "I can't make people gamble. That's the casino industry's job."

However, Jones said the Experience was the catalyst that got casino bosses to put money into what would have been a losing bet otherwise.

"Do I think that any of those casinos would have made the investment without the Fremont Street Experience? Absolutely not," she said.

An important factor is advertising, said Phil Griffith, president of Fitzgeralds Gaming Corp.

"If you have a great product but don't have enough money to tell people about it, you have to rely on word of mouth," Griffith said.

Money to spread the word about Fremont, in places like in-flight magazines and on airport billboards, isn't there because income from ground-floor retail shops in the Fremont garage isn't coming in, Griffith said. In fact, not a single store has opened its doors there since the attraction and garage opened more than a year ago.

The reason, Griffith said, is that a lawsuit filed by landowners and former retail operators contesting the city's snatching of the property via eminent domain is still pending. In fact, the suit is far from settled; rulings by judges thus far have heavily favored the landowners over the city, which has been hit for unconstitutionally moving to take land from one private entity and giving it to another.

"The (advertising) money would have been there," Griffith said.

Despite a less-than-stellar first year's performance, casino operators say something had to be done downtown, and the trend could now be reversing itself.

"Where would they (gaming figures) have been if they hadn't done Fremont?" Griffith asked. "We would have been in terrible shape if we hadn't done Fremont."

And Fremont Street Experience President Paris said people on the street are hopeful about the future.

"Since this is the first year ... we think we still have ground to cover," he said. "We'd love to be way ahead of where we are, but at this point we're optimistic we'll continue to grow."

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