Wynn denies rumors that he’ll sell the Desert Inn

Richard N. Velotta and David Strow

Thursday, Sept. 28, 2000 | 11:17 a.m.

Steve Wynn's top executives today denied reports that the casino mogul plans to sell the Desert Inn, rather than imploding the property and building a massive new megaresort in its place.

However, they are now raising the possibility that parts of the Desert Inn building could become a part of the planned megaresort.

"Nothing about our plans have changed one iota," the company said a statement this morning. "The facts remain exactly as they have been since the Desert Inn was acquired."

Rumors that the Desert Inn could be headed for a reprieve were launched Wednesday when Gaming Today Publisher Chuck Di Rocco, citing an unnamed source, reported that Wynn was looking at selling off the Desert Inn, rather than imploding it. Di Rocco said Wynn may retain the 200-acre land parcel, and proceed with a smaller development south of the Desert Inn.

Local television stations picked up on the report. KLAS Channel 8 reported that "insiders" were saying Wynn was considering reopening the property himself, or going into partnership with Horseshoe Gaming Chief Executive Jack Binion.

This morning, Wynn's company made it clear demolition is still in the Desert Inn's future. However, for the first time, the company is saying some parts of the 50-year-old hotel-casino could be saved.

"The property will be developed for a multiple (number) of uses, including a casino resort, non-casino hotels, condominiums and other mixed-use development," the statement said. "Such development may involve parts of the existing Desert Inn hotel, but the development will also require the demolition of several parts of the hotel's existing configuration."

Elaborating on the statement, Desert Inn Chief Operating Officer Mark Lefever said many options were being considered for the land, including joint ventures with other companies or sales of certain parcels.

"But the main parcel is still going to be our casino hotel," Lefever said.

A source familiar with the matter said he doubted Wynn was backing off on plans to demolish the hotel, saying that liquidation sales of the hotel's furnishings are still proceeding.

While rumors were beginning to swirl Wednesday, Wynn regaled an audience of real estate professionals with details of his famed deals of the past. He also didn't sound like a man ready to bail on the Desert Inn, repeating his plans for a huge development at the north Strip site.

Wynn took about 500 commercial real estate professionals gathered for NACORE International's four-day symposium and exhibition in Las Vegas behind boardroom doors with a collection of stories about the deals that many say changed the face of Las Vegas in the past two decades.

In the same way that he detailed the blockbuster deal that merged Mirage Resorts Inc. with MGM Grand Inc. before a group in Los Angeles last week, Wynn described the deals that transformed him from a liquor distributor to a casino CEO.

And in nearly every deal, Wynn said he was the only one pitching the offers, leading him to believe the competition missed an opportunity.

Wynn was particularly satisfied with the deal that put the Dunes hotel-casino in his hands for $70 million. The Dunes was imploded in 1993 in one of the most celebrated demolitions in Las Vegas history and when the dust cleared, Wynn built his most impressive hotel, the Bellagio.

"I told Masao Nangaku (the former owner of the Dunes) that I was afraid that I had an offer that would be so low that it would be an insult to offer it," Wynn said.

Wynn said that it was common knowledge that Nangaku was seeking $225 million for the property, but he was having trouble selling it because the property had become run down.

"I said to him, 'My shareholders have authorized me to make an offer with a seven and a zero in it,' " Wynn told Nangaku.

The Japanese businessman recoiled when he heard the offer, Wynn said.

"But 10 days later, Dan Lee, my financial officer, came bursting into my office so excited that he could hardly contain himself. He said, 'They're countering with $75 million.' That was about $420,000 an acre."

But Wynn surprised Lee by instructing him to reject the $75 million offer.

"I don't think Dan could believe it, but I told him, 'You don't counter a $70 million offer with $75 million. You make it something like $150 million.' By 5 that afternoon, they called back and sold for $70 million."

Wynn also said he was all alone in the deal that gave him the keys to the Desert Inn hotel-casino. He reiterated earlier statements that he plans to develop a resort of elegance that will be better than Bellagio and stay away from the themed properties that have been the signature of Las Vegas development in the late 1980s and '90s.

"I've done my turn with volcanos and pirate battles," Wynn said in reference to the attractions at his Mirage and Treasure Island properties that were part of the MGM MIRAGE deal that closed in May.

He said he'll build a 2,000-room property that will be fancier than Bellagio and have attractions that scored well with guests there -- classic art and top-drawer entertainment and restaurants.

"The Ritz Carlton doesn't have to have a theme to be successful," Wynn said.

He added that the property has a can't-miss location, being on the doorstep of two of the three largest convention venues in the United States -- the Las Vegas Convention Center, which is expanding by more than 1 million square feet, to the east, and the Sands Expo Center to the south.

The property also is across the street from the Fashion Show Mall, which also is expanding and is or will be home to some of the nation's leading department stores, including Nordstrom, Lord & Taylor and Saks Fifth Avenue.