Las Vegas Sun

December 21, 2014

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Columnist Jeff Simpson: On Michael Gaughan’s straight talk about start-up glitches at his South Coast casino

Jeff Simpson is business editor of the Las Vegas Sun. He can be reached at [email protected] or at (702) 259-4083.

Michael Gaughan may be the most straightforward casino boss in Las Vegas. No $100 haircut, no pinstripe power suit and no pulled punches.

Most executives wouldn't disclose problems at their newly opened casinos until long after they are solved, but the Coast Casinos chief executive told me last week that South Coast business has been slowed by traffic problems and the short-term lack of some of the resort's key components.

The new casino opened in late December, but is not yet producing the numbers Gaughan is counting on from the $625 million resort.

"Weekends are fabulous at the South Coast, but the weekdays are still a little slow," he said. "I don't worry, though. It started the same at the Suncoast."

Gaughan knows what the South Coast's problems are, and says that most of them will be fixed quickly -- by March 1.

"I rushed to get it open and we didn't overhire like a lot of places do," he said, referring to the practice of hiring more employees than a property will eventually need to provide excellent service from day one. "Our food service is a little bit better now, and it will improve."

Another reason for the slow midweek start is that many of the South Coast's revenue streams -- and customer lures -- have yet to open, including the equestrian center, spa, nightclub, swimming pool and second hotel tower, he said.

Gaughan said one of the resort's biggest problems is something he and Coast Casinos parent Boyd Gaming Corp. have little control over: road construction.

He said the road-widening project on Las Vegas Boulevard South hampers access to the property and that the state's failure to begin work on the planned Silverado Ranch Boulevard interchange on Interstate 15 forces customers to use Las Vegas Boulevard.

"What they've done to Las Vegas Boulevard is a crime," Gaughan said. "North of the South Coast the Strip narrows from three lanes to two lanes to one, then back to three lanes. It's a real pain, especially in the late afternoon."

He said the new freeway exit was approved in 2003, and that Coast had offered to pay one-third of the interchange's cost, but the project has yet to commence.

"It's killing me," he said. "Well, maybe not killing. But it hurts."

For now Gaughan says the customer mix is "mostly local." He expects that the opening of the equestrian center in about a month and, eventually, the new I-15 exit will boost the property's tourist numbers.

Overall, Gaughan said he's pleased with the property's performance. He said customer feedback has mainly been positive.

"Give us a couple of months and we'll be doing great," he promised.

***

One of the funniest stories in the Las Vegas news media last week was, unfortunately, played straight by the Review-Journal and the Associated Press.

The story described plans for a group of developers to build a $4 billion casino resort in a very unlikely spot: near the Las Vegas Motor Speedway in North Las Vegas. Among the project's features would be a 26,000-seat sports arena, another arena with 10,000 seats and a 5,000-seat pool.

The story reminds me of a bevy of similarly hyped resort pitches I've heard in the past, including plans for themed casinos based on almost every major city and culture in the world.

The best was the $5 billion Moon casino project, pitched by a Canadian huckster about three years ago.

When I wrote about the developer's Moon casino idea, I noted that he came with a plan and a pitch (and even a model) but not with the cash. And that's always the rub. As a couple of academic experts told me then, ideas are cheap, and Las Vegas history is littered with big ideas that never were built.

And the North Las Vegas project is another that will never be built. The copy editor had the right idea in 2002 when he put this headline on my Moon casino story: "Pure lunacy."

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