Las Vegas Sun

October 24, 2014

Gaming:

Low cost is Eastside Cannery’s major innovation

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Steve Marcus

The Eastside Cannery, built as a slightly higher-end property than its sister casino in North Las Vegas, occupies a part of the suburban valley that is already home to a host of casinos. It’s within three miles of Boulder Station, Arizona Charlie’s and Sam’s Town, but it’s expected to benefit from being the new kid on the Boulder Strip.

When the Eastside Cannery opens for business this evening, customers may notice a few vintage touches — beaded curtains, geometric tile accents, murals of women in beehive hairdos and photos of cars with tail fins.

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Roulette dealer John Furry, left, practices Tuesday at the Eastside Cannery for the $250 million, 307-room casino's opening tonight on Boulder Highway.

Casino opening

  • The Eastside Cannery will open its doors at 8 p.m. Thursday.

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Beyond the Sun

They may also notice the latest casino to open in Las Vegas has a buffet with tableside service (an all-you-can-eat restaurant that lures passers-by with a 20-foot dessert bar, diner-style, out front), a retro entertainment lounge with high-backed sofa chairs, and cocktail servers in snug outfits resembling those once worn by carhops at drive-ins.

The industry elite, however, will be focusing on another achievement: the property’s $250 million price tag.

Keeping the cost of the 307-room property at Harmon Avenue and Boulder Highway low is a feat that isn’t going unnoticed in an industry in which a simple hotel or casino expansion can cost hundreds of millions of dollars.

Until today’s opening, the most recent casino debut in Las Vegas, the nearly $1 billion, 400-room Red Rock Resort in 2006, broke a money record for suburban casinos. The $700 million M Resort will open in March with 400 rooms.

Cost is more than a factor of size.

At Red Rock, Station Casinos splurged on marble floors, bartops of solid onyx and custom-built chandeliers, among other things. Some observers, noting the extra cost, said locals wouldn’t care that walls were lined with exotic wood and stone instead of wallpaper. But Station executives say their iconic resort was built to withstand competition for decades to come.

The Eastside Cannery is a study in doing a lot with a lot less.

Bold, colorful accent pieces in purple, orange and yellow make the property look upscale without more expensive materials, general manager Sal Semola said. The understated 1960s theme is aimed at all ages, from the older crowd that will recognize some of the designs to a young audience attuned to a modernized vintage look, he said.

The property’s hotel tower is “modern industrial,” with pitched sections of roof in corrugated metal and girders lined with LED tubes that will change color at night.

“We wanted a look that was timeless, that wasn’t going to look stale years from now,” Semola said.

The floor is patterned carpet that’s just midcentury enough in appearance to look hip — with nary a marble slab in sight.

But customers aren’t likely to notice the ways in which the property’s co-owners, Cannery Casino Resorts executives Bill Paulos and Bill Wortman, kept costs under control. The lower price tag will increase the odds that the property will turn a profit more quickly.

Keeping the decor in check is only part of the equation.

Paulos and Wortman have opened more than a dozen casinos on the Strip and beyond. They have learned the more specific their project plans are from the outset, the easier it is to keep costs down during construction.

Some changes to a property’s initial plans are inevitable. Yet costs can spiral upward with each change and add-on, Semola said.

“You have to understand what you’re doing on the front end or that’s going to drive up your costs,” he said. “These guys are good at keeping things under control. And they’ve done this so many times that they know what to expect.”

The bosses have bullish expectations for the property, in spite of its conservative price tag.

Paulos and Wortman opened the Cannery in North Las Vegas in 2003 — a property that benefited from its relative isolation on the northeast side of town.

The Eastside Cannery has about 50 percent more rooms and slightly more slot machines than the Cannery despite being within striking distance of three big casinos and several small ones along Boulder Highway. The property also has two features that are lacking at its sister casino in North Las Vegas: 20,000 square feet of meeting space and a top-floor entertainment venue unique to Boulder Highway, called One Six, with panoramic Strip views.

The Eastside Cannery, Semola said, was built as a slightly higher-end property than the Cannery. The company’s third local casino, the Rampart at the J.W. Marriott in Summerlin, is small but caters to a wealthier crowd, reflected in its higher-end Waverly’s Steakhouse. The Eastside Cannery’s steakhouse, Carve, has hardwood floors and a prominent meat carving station but will have a more casual atmosphere and clientele, Semola said.

Unlike other valley suburban areas, where casinos are miles apart, Boulder Highway, with some of the highest slot machine payback percentages in the area, is a competitive slugfest.

The Eastside Cannery is less than a mile down Boulder Highway from Boyd Gaming Corp.’s Sam’s Town casino, less than two miles from the Arizona Charlie’s Boulder casino and less than three miles from Station Casinos’ Boulder Station. Many other, smaller casinos dot the “Boulder Strip,” where casinos generated $903 million in gambling revenue over the 12 months that ended June 30, versus the Strip’s $6.7 billion. By comparison, downtown casinos reported $622 million in revenue and North Las Vegas casinos reported $295 million in revenue, according to the Gaming Control Board.

The casino is in an older area known for its trailer parks and rent-by-the-week motels that developers have avoided in favor of the faster-growing western part of the valley.

The Eastside Cannery, the first new casino on Boulder Highway since Boulder Station opened in 1994, will benefit by being the new kid on the block, Semola said. It’s expected to attract customers from the former Nevada Palace, patrons from nearby properties and people who are new to the area, he said. It also will benefit from new housing developments that have sprouted up on both sides of the highway in recent years, he added.

Proximity to the competition will work to the casino’s benefit, Semola said.

“There’s critical mass here,” he said. “There’s clearly demand for this product from locals but also regionally” from California and Arizona visitors.

The economic downturn began after the property was under construction and its depth was largely unforeseen by gaming executives. But the downturn probably wouldn’t have changed the timing, plans or price tag for the casino, Semola said.

“You’re not going to have a trendline that’s constantly going up. You’re going to have those downturns, and the town is going through a period of overbuilding right now. But we’ll get through this,” he said.

“This investment makes sense for this market right now. We can always expand in the future.”

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