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September 21, 2014

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Wynn, who has an early winner, plans an Encore

Business at Wynn Las Vegas has been so strong that Steve Wynn says he'll begin building his next Las Vegas hotel in the spring.

Wynn said Monday afternoon that he'll begin building the Encore soon after he agrees with his builder on an exact price for the $1.5 billion project, which he expects to submit to his bankers by the end of March.

Encore, which will take about two years to build, will have about 2,030 suites, with the smallest room encompassing 738 square feet -- the biggest rooms on the Strip, Wynn said.

The casino will have 40,000 square feet and four restaurants, its own pool and spa and a parking garage.

"Adding 2,000 rooms to this place is like spittin' on the floor," Wynn said. "You can't miss."

Borrowing the money to build won't be a problem, he said.

"They were eager to give us $1.4 billion before we opened (Wynn Las Vegas in April)," Wynn said. "After our opening success, don't you think they'll be even more eager?"

The combined properties will give Wynn almost 4,800 rooms and more than 150,000 square feet of casino space.

There will also be a nightclub -- "a big sucker by the pool," Wynn said.

The new tower, with 48 floors, will have three more floors than Wynn Las Vegas, and the tower will be wider as well, to make space for the bigger suites.

The new hotel will have the same exterior look as Wynn Las Vegas and will connect to the existing property at its north end, near its showrooms.

Like Wynn Las Vegas, the Encore tower will curve, but the inside of the tower's curve will look north, with the end of the tower opposite its connection to Wynn Las Vegas pointing toward the Stardust.

Wynn said the $251 million in net revenue Wynn Las Vegas reported in the quarter ending Sept. 30 made the decision to expand easy.

"We did some research, and Bellagio in its first six years never got to $251 million in net revenue until the first quarter of this year, after it was expanded to 4,000 rooms," he said. "We did it in the summer of our first year."

The third quarter is traditionally a slow revenue period, much weaker than the first quarter, which includes big conventions and the New Year, Chinese New Year and Super Bowl weekend frenzies.

Longtime gaming executive Patty Becker, now executive director of UNLV's International Gaming Institute, said Wynn's success opening properties is undeniable.

"He's the best or one of the best," Becker said. "He's a leader in that regard -- with the Mirage, with Bellagio and now with the Wynn."

UNLV public administration professor Bill Thompson said Wynn is at the forefront of the change in Las Vegas toward wealthier, bigger-spending visitors and gamblers.

"He sets the standard, and others catch up to him," Thompson said. "He understands these high rollers better than anyone."

Thompson noted that the Encore addition would differ from the 1993 opening of Treasure Island four years after Wynn opened the Mirage, because Treasure Island was a lower cost alternative than the top-of-the-line neighbor.

"With all suites and bigger rooms, this will probably be where Wynn keeps some of his best casino guests," Thompson predicted.

Wynn first announced plans to expand Wynn Las Vegas in February 2003, and the plans have grown from a new half-billion-dollar tower of about 500 rooms to a much bigger concept in a separate, albeit connected, hotel.

Wynn said his plans for the expansion grew as his evaluation of the market changed. The power of Wynn Las Vegas and its reception surprised him, he admitted.

But working against expansion was the recent spike in building costs, which made him think that it might be better to wait until costs cooled down. He blamed the rising costs on the number of projects now under way in Las Vegas and the rising price of steel and concrete.

Wynn said Tony Marnell, who built Wynn Las Vegas, Bellagio, Treasure Island and the Mirage, would not be building Encore. He said Marnell will be busy with other projects, probably including Marnell's son's planned south Las Vegas property, the M Resort.

Tutor-Saliba, a California-based builder owned by Perini Corp.'s controlling shareholder Ron Tutor, is expected to build Encore, Wynn said.

"Our success made the decision to build an easy one," Wynn said. "We're going to go ahead and build."

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