Rio looking at observation wheel

By Liz Benston

Wednesday, Dec. 24, 2003 | 11:13 a.m.

The Rio hotel-casino is negotiating with a Las Vegas development company to build a giant ferris wheel behind the resort -- the latest announcement in a long line of Las Vegas Strip observation wheel concepts that have been proposed over the years but haven't yet materialized.

The $86 million "Voyager" ferris wheel at 600 feet tall would be the world's largest, permanently transforming the city's famed skyline and serving as a major tourist draw similar to the Big Eye wheel in London, developers said Tuesday. Stores and restaurants would be located below the wheel and visitors also could ride an elevator to a three-story nightclub located at the wheel's center.

Financing has not been lined up for the project, which would be entirely owned and developed by Voyager Entertainment International Inc. -- a company with no material assets that is on shaky financial footing.

"We do not anticipate enough positive internal operating cash flow until such time as we can generate substantial revenues, which may take the next few years to fully realize," the company said last month in its most recent filing with the Securities and Exchange Commission. "Voyager continues to have a working capital deficiency that raises substantial concern regarding its ability to continue as a growing concern."

Voyager claims to be marketing similar ferris wheels in Dallas, Texas and Shanghai, China but hasn't yet lined up financing for those projects. The thinly traded company went public in 2002 through a merger with a publicly-traded shell corporation.

Voyager President Richard Hannigan said financing will "not be an issue." The company developed its concept for the wheel more than a decade ago and now owns a patented design unlike any other, he said.

Voyager expects to be the first -- and only -- company to bring an observation wheel to Las Vegas, he said.

"Whoever gets it built first will be successful," he said. "We will be able to move very quickly."

Tom Jenkin, president of Harrah's Western Division, said he is also confident Voyager will be able to obtain financing for the project. Rio owner Harrah's Entertainment Inc. expects Voyager to break ground before the end of March and open by July 2005. Harrah's would lease the land to Voyager for a percentage of revenue, Jenkin said.

The resort has been approached by other companies aiming to build ferris wheels in Las Vegas but is instead negotiating with Voyager because the company's concept "had the most panache," Jenkin said.

Voyager has been shopping around its ferris wheel concept for the past several years. In 2001, a predecessor of the company proposed to build a 500-foot wheel at Harmon Avenue and Las Vegas Boulevard next to the Aladdin resort.

In February, county commissioners approved a plan by Voyager to build the wheel as part of a hotel-casino project proposed by Archon Corp. on land Archon owns that is now now occupied by the Wet 'n Wild waterpark south of the Sahara resort. Voyager announced this month it had broken off negotiations with Archon, which issued a separate statement saying it intends to move ahead with preliminary plans to build a resort and 500-foot ferris wheel. Archon officials could not be reached for further comment.

Other observation wheels have been proposed in Las Vegas, including a wheel at a London-theme resort that was put on indefinite hold. That resort was supposed to be next to the Turnberry Place condominium complex on Paradise Road.

The Voyager ferris wheel's futuristic design calls for 30 observation cars resembling spaceships that feature wet bars, bathrooms and lounge seating for up to 20 people each. The retail and restaurant area at ground level will be 80,000-square-feet, the company said.

Unlike previously proposed sites, the Rio's location on East Flamingo Road affords the greatest view of the Strip and the best vantage point possible for the wheel, which would rise 150 feet above The Rio and would be visible from thousands of north-facing hotel rooms, Hannigan said.

"If we can't have the best view in town it just wouldn't work," he said.