Wynn plans new Strip resort

Thursday, June 8, 2000 | 11:27 a.m.

CARSON CITY -- The days of the themed resort in Las Vegas are over, says casino developer Steve Wynn as he revealed plans for a 3,000-room hotel adjacent to the Desert Inn.

The new hotel will probably have another name and the future of the world-famed Desert Inn golf course isn't decided, says Wynn. In his new venture, Wynn says he wants "to improve on the Bellagio," considered one of the top hotels in Southern Nevada.

And the present Desert Inn could eventually be replaced by a new hotel. "In the end when we're finished, there will not be the buildings there are now," Wynn said, talking about a 10-year development.

Wynn gained preliminary approval from the state Gaming Control Board Wednesday for his $270 million purchase of the Desert Inn, which he said in recent years, has either lost money or only broke even. The purchase is from Starwood Hotels & Resort Worldwide Inc.

Wynn said he would keep the Desert Inn operating for the next four years while he develops and builds the new resort, which will have a "casual elegance." Asked by reporters if it would be a themed resort like some of his former properties, Wynn replied, "That part of my career is behind me."

"Themes are pretty much a thing of the past," he said. His new hotel, he said will stress gardens, landscaping and natural light ... "those things we enjoy in every hotel."

Themes have a "tendency to get tired. How can you refurbish pirates, and Egypt and Camelot over and over again?

"Once you introduced Sir Lancelot, you've sort of shot you wad or Long John Silver or whoever."

Wynn introduced flaming volcanoes at the Mirage and a pirate fighting ship at Treasure Island.

His life work now, he says will be developing the 22-acre Desert Inn parcel, which he sees as a sleeping giant. It is between the Expo convention center and the Las Vegas Convention Center. It is right across the street from upscale department stores such as Neiman Marcus and Saxs Fifth Avenue.

Owners of the 18 homes that border the property will be offered a deal to sell their property for 10 percent above the appraised value. Their acquisition, he said is not central to the development of the new hotel.

He plans an art gallery in his new hotel, like he had at the Bellagio. It will be five months before he decides on a name for the new resort. "The new hotel will not be called the Desert Inn," he said.

And the Desert Inn will probably be replaced. There would be a new resort -- "It would not be the DI as it stands now," said Wynn. "It's going to be a new DI. We can make it work as it (the DI) stands now. It's a big advantage to us to keep it open the next three or four years while we build the new hotel."

The present DI is too small, too close to the street, it's right up against the sidewalk, there's no room for cabs, he said. "It's a thing from the 50s," adding, "It's not a competitive facility." The second hotel to replace the DI would also have about 3,000 rooms.

Asked about continuing the golf course, Wynn replied, "That's another story. The golf course is a tremendous advantage, but this piece of property raises the point of value of that land.

"One of the things I have to decide, and I haven't done it yet, is how important is the golf to these two hotels or is there something else we can do with it," he said.

He said the choices for the Desert Inn are "infinite," because the land. "This hotel is alive on all four sides," he said, as he lays out his plans for the next 10 years.

He said former owners of the DI such as Howard Hughes, Kirk Kerkorian, ITT and Starwood never focused on developing this property.

He told the board he is putting up $200 million of his own money and borrowing $100 million from the Deutsche Bank, which he will repay by Oct. 1. He plans to retain 60 percent while selling off 40 percent of the operation in a private placement. He said he will invest another $100 million.

Wynn wants to be in a strong financial position so that when he borrows money for new projects, he can get an interest rate of 8 percent or lower. He said he worked to pay off the debt at the Mirage and "protect our balance sheet, even though Wall Street didn't appreciate it."

Wynn received more than $500 million, pre-tax, from the MGM Grand Inc.'s purchase of Mirage Resorts Inc., in May. And Wynn bowed out of the picture at the Mirage company then. His new company is called Valvino Lamore, LLC., named after his grandfather who came to this country in 1914 and performed on the stage as a second act to singer Al Jolson.

The deal for the DI is to close June 22 right after the state Gaming Commission approves the application. Wynn will inherit $9 million in markers. He told the board he does not intend to use the baccarat room on the mezzanine and will keep all gambling on the main floor.

In talking about the future of Las Vegas, he called it the greatest convention city in the world. Indian gambling in California, he said would be the most menacing challenge the city has faced. But he said, "Las Vegas is too tough a competitor."

He predicted the present 120,000 hotel rooms would expand to 135,000 in the next few years.