Execs high on near future

Tuesday, May 17, 2005 | 10:51 a.m.

A panel of chief financial officers believes Las Vegas will undergo a more meaningful evolution of development in the next 10 years than it has had in its first 100.

The reason: The new condominium boom will transform the city into a truly metropolitan market, CFOs from several companies concurred Monday.

"This resort (Wynn Las Vegas, site of the 27th annual gaming conference produced by the Nevada Society of CPAs) is the last of its kind," predicted Jim Murren, CFO of MGM Mirage.

He said most of the next generation of Las Vegas resorts would include residential components to capitalize on the casino companies' most valuable asset -- their land.

"When Turnberry (Estates) started building, I'll admit I was skeptical," said Glenn Christenson, executive vice president and CFO of Station Casinos Inc.

Murren said he saw the light when his company partnered with Turnberry on the Residences at MGM Grand. A project that he expected would sell out in a year took seven weeks to fill, he said, and the second phase took a couple of months to sell.

"It's a dramatic shift that we're only beginning to understand," Murren said.

Christenson said Wall Street "still hasn't gotten its arms around it."

Murren said MGM Mirage's Project CityCenter will incorporate a high-rise living component. That project and a number of others offer proof that Las Vegas' latest development boom is far from over.

The CFOs identified upcoming projects up and down the Strip on the drawing board.

Ellis Landau, executive vice president, treasurer and CFO of Boyd Gaming Corp., said his company isn't ready to share details about what is planned for the 63 acres around the Stardust.

On the north end of the Strip, the CFOs said they expect the expansion of Wynn Las Vegas, the recently announced Fountainebleau project at the old El Rancho site and possible projects at the Frontier, Western Ho, Riviera and the Sahara sites.

On the south end, Christenson hinted that details would be announced by the end of the year on the 58 acres currently occupied by the Wild Wild West casino on Tropicana Avenue at Industrial Road.

Christenson said there would be components of a tourist property as well as a locals flavor. He gave no other specifics, other than "it's going to be a place you'll want to see."

Christenson also said he expects Station eventually will revamp its Palace Station project on Sahara Avenue and Interstate 15.

The CFOs said their job is to enhance shareholder value and the industry has been doing that my raising the bar in quality and turning casinos into total entertainment experiences that include top-drawer restaurants and retail experiences.

Noting that most of the newest resort properties generate more revenue in nongaming business than in their casinos, the executives said Las Vegas continues to generate tourism business by offering a value proposition to visitors.

"The value proposition is that you can stay here (at Wynn Las Vegas) or the Bellagio for less than you would pay for a room at the Quality Inn in New York," Murren said.

Other panel observations: