Park Place weighs Bally’s options

By Liz Benston (contact)

Wednesday, July 3, 2002 | 11:12 a.m.

Park Place Entertainment Corp.'s global reach and its resources as the biggest revenue generator in the gaming industry have paved the way for potential expansion opportunities galore.

What might be the most valuable property for the Las Vegas-based gambling empire, observers say, lies right under its nose.

In a recent interview with the Las Vegas Sun's sister publication, In Business Las Vegas, Park Place Chief Executive Thomas Gallagher said the company may eventually develop the land in front of its 2,814-room Bally's Las Vegas hotel-casino.

The prospect has been discussed with the investment community over the years, analysts say. However, it hasn't been extensively discussed publicly.

"There are no specific plans for that site at the moment and no capital commitment has been made for a project involving it," Park Place spokesman Robert Stewart said. "Like land we have available in Atlantic City, in ... the mid-South and in other places in the West, we think that in the long run, we could realize a significant return on investment by developing that land."

Park Place watchers have long speculated about whether the company would develop the land at the famed Four Corners, the heart of the Strip at Flamingo Road and the southeast quadrant of one of the most heavily traveled intersections in town. Bally's is set much further back from its peers along the Las Vegas Strip.

Analysts say the land could be better used.

"It's a bull's-eye location in Las Vegas from a real estate standpoint, from a location standpoint and from a company standpoint," Michael Rietbrock, a gaming analyst with Salomon Smith Barney, said. "I think people expect Bally's to do something there."

"I think it is one of the most valuable pieces of property in Las Vegas," added Dennis Forst, a gaming analyst with McDonald Investments. "If you had to do it over again, you'd probably build an attraction to bring people there or build the property right up to the street."

In 1994 Bally's unveiled an elaborate tunnel that ferries tourists up an escalator and onto four, 200-foot moving walkways through a spectacle of light, music and flowing water. The $12 million project was responsible for significantly boosting traffic into the casino.

The Las Vegas architecture firm that designed the walkway, Friedmutter Group, has run ads saying the feature has drawn 10,000 additional customers per day into Bally's.

Before the walkway, less than 6 percent of casino traffic came from people walking in off the Strip, Bally's then president Darrell Luery noted.

Strip properties have devised various strategies for attracting walk-in customers. The Aladdin Resort & Casino, now in bankruptcy, built an edifice right up to the sidewalk. The property has had problems drawing customers loathe to climb stairways leading up to the casino.

Other properties cultivate an image with elaborate attractions. The front of the Bellagio hotel-casino, one of the most profitable properties on the Strip, draws crowds to watch fountains in a lake that move in time with music.

Experts have debated for decades whether Bally's would expand its hotel-casino to the Strip or construct a separate attraction, Las Vegas-based architect Paul Steelman said.

Either is possible, though any new development would have to be "spectacular" to compete with the Bellagio and other first-class properties that have since sprouted along the Strip, Steelman said. Paul Steelman Design Group has developed designs for about 80 casino projects worldwide, including the Desert Inn and the Stratosphere in Las Vegas.

Another important attraction for Park Place already is under way across the street. The company expects in March to unveil a $95 million replica of the ancient Colosseum in Rome. The arena, positioned in front of Caesars Palace, will become a regular venue for a show featuring recording artist Celine Dion.