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August 1, 2014

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Cannery dreamin’: Casino targets locals market

Some seven miles from the shimmer and glitz of the Las Vegas Strip and amid the modest tract homes and retail centers of burgeoning North Las Vegas, a factory-like building rises from a corner of dirt on Craig Road just west of Interstate 15.

The structure, built to resemble a fruit cannery from the post-World War II era, won't be packing peach slices anytime soon.

Come January, it will open as the Cannery Casino Hotel -- a 50,000-square-foot casino with more than 1,200 slot machines, 21 table games and four restaurants. Separate buildings will house 201 hotel rooms.

The Cannery, which will employ about 850, is one of few casinos that have been built in Las Vegas in recent years. While several major resorts are planned near the Strip, projects in local neighborhoods have been virtually halted by a state law that went into effect about five years ago that enacted strict requirements for new casinos in residential areas.

Under Senate Bill 208, casinos that would have died in 1997 when existing casino development zones were wiped out were still allowed to build projects that met certain requirements. Developers with plans in the pipeline were required to obtain necessary local permits by the end of 1998 and obtain a gaming license from the Nevada Gaming Commission by the end of this year.

The Cannery and its principals received a recommendation for approval from the Gaming Control Board last week and are expected to be approved by the commission in time for the year-end deadline -- squeaking by rivals who might have considered building nearby casinos.

Only one other casino -- the Tuscany hotel and casino off the Last Vegas Strip on East Flamingo Road -- has received regulatory approval this year.

The Cannery is about five miles from competitors Texas Station and Fiesta -- larger casinos owned by dominant locals' casino chain Station Casinos Inc. Santa Fe Station, another Station Casinos property, isn't much further.

Locals' casinos say they typically draw customers from a 5-mile radius, meaning that the Cannery's potential customers may overlap somewhat with Station Casinos'.

But that doesn't concern William Paulos, one of three owners of the Cannery and a partner in Millennium Management, manager of another neighborhood casino inside the J.W. Marriott Las Vegas resort in Summerlin.

"There's enough business up there for everybody," Paulos said.

North Las Vegas "might be the fastest growing Zip Code in the U.S.," he said. "It's amazing when you drive through and see the great value for the dollar people are getting for their homes. And the expansion is going to continue."

Station Casinos, which has plans of its own to build a ninth regional casino in Summerlin, has long touted the fact that it controls more land available for future casino development than the competition. In a recent conference call with analysts, executives reassured investors that the Cannery would not pose significant competition because of its size and because it is relatively distant from Station properties.

Small even by neighborhood casino standards, the Cannery is a far cry from the theme megaresorts Paulos engineered as an executive for Circus Circus Enterprises Inc., the predecessor to Mandalay Resort Group.

Paulos oversaw design and construction work for the Excalibur and the Luxor, two of the more-recognized casino resorts in Las Vegas. As president of Primadonna Resorts Inc., he helped develop the design and feel for MGM Grand Inc.'s New York-New York Hotel & Casino, a joint venture with Primadonna before the company merged with MGM Grand in 1999.

At Primadonna, Paulos served as the primary contact for Wall Street investment firms -- a job that eventually lost its luster.

"I got very tired of the public company business," said Paulos, who left Primadonna in 1996 to form Millennium Management with William Wortman.

Wortman, former chief financial officer and vice president of administration for non-gaming departments at Caesars Palace, shares that view, he said.

"Always dealing with Wall Street ... got a little old for us, being entrepreneurial kind of guys."

Paulos, Wortman and the Cannery's third partner, Robert Mendenhall, had always envisioned some kind of factory theme.

They considered a brewery design but settled on a 1940s fruit cannery -- an idea that allowed them to have fun with industrial beams and fanciful images of fruit and pin-up girls.

A peek inside the place while under construction reveals a building that looks a lot like a real factory. Save for a central, circular bar, the casino floor will have an open floor plan, with 25-foot high ceilings, skylights, exposed metal columns and restaurants at the periphery.

Eventually, high-tech slot machines will sprout from bright carpet and a tile entryway, marble accents and eye-catching images of Vargas girls will beckon patrons inside. Customers will be able to avoid the casino floor altogether by taking outdoor entrance into Victory's Booze & Bets, an enclosed sports bar that will have an inconspicuous counter where gamblers can make sports wagers.

Customers can more easily find their favorite games or navigate throughout the building with a simple, moderately-sized floor plan, executives say.

The casino floor isn't what will most distinguish the Cannery from competitors, they add.

A multi-use events center, located off the casino floor with a marquee entrance, will serve as a local headquarters for festivals as well as concerts, sporting events and conventions.

Ed Ridenour, the Cannery's director of special events, was plucked from his native West Virginia to plan the events menu.

Ridenour, who is new to the casino industry, has organized everything from regattas to the National Independence Day Parade in Washington, D.C. He will work with about four other employees with experience in event planning who will focus on creating festival themes and activities. Their appointments aren't yet final, owners said.

Ridenour has done his homework by checking out the blitz of events already offered at local casinos across the Las Vegas Valley. The Cannery's event center, called The Club, will be different, Ridenour said.

"The theme will change every few weeks. It could be themed for a Mardi Gras festival or a football festival. We'll invite nonprofits to participate in events here. It can be whatever we want it to be."

The centerpiece is a set of custom-built, 60-foot high glass doors that can be closed for indoor activities and opened to an outdoor pool and recreation area. The center is aimed at hosting events that can handle thousands of patrons all day long and in all kinds of weather. The ultimate goal, Ridenour said, is to attract customers from across the Valley.

That means more customers spending more time at the property, he said.

"We can move more people through here than a jazz concert at a locals casino on a Saturday."

The Cannery is the first ground-up casino project for Paulos and his company. But it may not be his last.

The company doesn't have any immediate plans to announce but is on the lookout for other possible projects, Paulos said.

"We're always looking for opportunities."

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