Caesars’ aim: Keep towering over Strip

By Liz Benston

Thursday, July 19, 2007 | 7:23 a.m.

Forty-year-old Caesars Palace draws back the curtain today on plans for the property's seventh hotel tower - the third block of rooms to be shoehorned onto the site within a dozen years and a project that demonstrates the rare staying power of a historic brand.

The $1 billion investment includes a 665-room, 23-story tower, a 263,000 - square-foot convention center and a new front entrance and lobby for the main casino. It comes at a time of transition for parent company Harrah's Entertainment, which is expected to go private as part of a wave of private equity takeovers of major companies.

The $17.1 billion buyout has raised questions about how the world's largest casino company will be run.

And now we're getting a big clue.

The new tower, which is expected to be completed by the first quarter of 2009, signals that Harrah's new private owners will forge ahead with strategic projects even as Harrah's has trimmed its corporate staff.

The fact that Harrah's is targeting Caesars before tackling expansions at its other Las Vegas casinos speaks to the importance of its flagship resort, which has created a legacy of old yet new, kitsch yet elegant, venerable yet hip.

Caesars, the grand dame of the Strip, has undergone numerous makeovers . The property's history is one of additions large and small as well as ongoing touch-ups - from raising too-low casino ceilings to repainting facades in brighter hues.

This latest addition will not only be the most expensive in Caesars' history, but perhaps its most important, because it will occupy one of the last unused spaces on the 85-acre site, one of the largest parcels on the Strip.

The new Octavius Tower will sit west of the Flamingo Road-facing Augustus Tower on land partly occupied by the pool area, which will be redesigned with additional pools and outdoor amenities such as a restaurant and spa to fit the new space. The Pavilion events center at the rear of the property will be torn down to accommodate a new, larger convention center.

Historically, hotel additions have been smart investments for casinos because they're cheaper than building entire resorts and, as luxury offerings, can command higher room rates. But the company, especially as it goes private, may not be concerned with mere short-term profit.

During the next few years, Harrah's plans to open Caesars resorts in the Bahamas, Slovenia and Spain as part of an aggressive plan to expand that brand worldwide. Upgrading its flagship to a higher standard isn't only a Strip requirement, but may also be a global imperative.

Tinkering with a 40-year-old brand is a tricky task. Although Caesars has lost some cachet to rivals Wynn Las Vegas, Venetian, Bellagio and MGM Grand, it remains the oldest and most recognizable luxury property in Las Vegas.

The task of expanding the property falls to Greg Miller, Harrah's vice president of property development and a veteran in cultivating entertainment brands.

"You really only have one chance to get it right with customers," he said. "We need to make sure we really nail the details."

Before joining Harrah's three years ago, Miller developed Universal Studios' theme parks and headed Universal Mediterranea in Spain, Europe's second - largest resort.

In Caesars, the new owners can claim the Strip's first heavily themed resort, a place that made its name with roaming centurions, prize fights, high rollers and A-list headliners. Its various owners also have preferred to build additions rather than implode and start over, as has occurred up and down the Strip.

That strategy has resulted in a topsy-turvy collection of labyrinthine buildings, including multiple hotel towers with their own names and reputations, some several decades old.

Although no longer the biggest high roller joint, Caesars hopes to maintain its ranking among top-drawer hotels while about $30 billion in resort development comes to the Strip in the coming years.

Rooms in the new Octavius Tower, named for Julius Caesar's nephew, will start at 600 square feet and include 71 suites, topping out with villas of more than 10,000 square feet with terraces, poolside access and private entrances from Flamingo Road a stone's throw from Interstate 15.

The new rooms will include flat-panel TVs, bedside iPod docking stations, layered coverlets and sheets rather than duvets, televisions above bathroom sinks and digital "do not disturb" signs.

The central lobby spilling into the original, circular casino pit will be remodeled in a grander style, and the old casino ceiling - one of the last recognizable relics in the property - will be raised by at least 10 feet. There will be plenty of Greco-Roman touches in these additions, Miller said.

"There's an essence here. The history of Caesars is something to build upon, not to reinvent from scratch," Miller said.

Caesars Palace recorded its best year in 2006, with operating profit rising more than 50 percent.

Credit for that, analysts say, goes in part to the days before Harrah's purchased Caesars Entertainment in 2005, with the opening of two celebrity-chef restaurants, the deluxe Colosseum Theater hosting Celine Dion, and Pure, which at the time was the most expensive nightclub in town.

Under Harrah's, Caesars has continued to morph, with a leopard print gambling pit with lingerie-wearing dealers based on Caesars' Pussycat Dolls show, and the opening of Rao's, an outpost of the famed Harlem eatery.

"The updates they've done to date have very much kept it in the loop as premier place," said Anthony Curtis, publisher of the Las Vegas Advisor newsletter. "Caesars is not in any way considered outmoded. And it's as good a gambling brand as it gets."

The changes have helped address some fears that Harrah's - known for middle-of-the-road gambling halls across the country catering to the retired, fanny-pack crowd - would cheapen the higher-end Caesars brand.

Executives say the sale of Harrah's to private owners hasn't influenced progress on the Octavius Twower, for which planning began a year and a half ago, six months after Harrah's took over the property.

"The Augustus rooms were so well received that we knew right away that we'd better get going and build more," Miller said. With the addition, Caesars will have 4,013 rooms.

"There are more people who want to stay at Caesars than we have rooms," he said.

What happens next for the company, at least in Las Vegas, is unclear.

The expansion is a first step in what Harrah's hopes will become a master-plan upgrade encompassing the multiple casinos it owns across from Caesars Palace, east of the Strip.

Miller says Harrah's is studying its options.

For now, all eyes are on Caesars.