Las Vegas Sun

July 29, 2014

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BIZ BUZZ:

Jeff Simpson: Palms Place condo tower will be a success

George Maloof gave me a tour of Palms Place on Friday and I was really impressed by his new condo tower that is slated to open at the end of this week.

Maloof has shown me the various components of the Palms as they were built, starting with the original tower that opened in 2001 and the Fantasy Tower, which opened in 2005.

While I’m generally skeptical of casino resort condominiums, particularly hotel condos (like Palms Place), I think Palms Place will be a big success — financially and stylistically.

Unlike inferior competitors, Palms Place is close to its hotel and its amenities, but still maintains its sense of being separate — sort of an oasis of tranquility on the turbocharged Palms property.

New owners will begin closing on the Palms Place units this week, and I predict that almost all of those folks who put 20 percent down for the right to buy the 442 600-square-foot studios, 136 1,200-square-foot one bedroom suites and 21 penthouse suites will want to pony up the rest of the cash and become owners.

The views are awesome, the design of the units is clean and modern and the pool (which doesn’t open until April) wraps around a corner of the tower, has 19 cabanas and should be one of the city’s best.

Simon, the Palms Place restaurant and Lounge, overlooks the pool. The restaurant is being developed by Kerry Simon, the renowned chef who operates CatHouse at Luxor and used to run Simon Kitchen at the Hard Rock.

The vibe of Palms Place, from its lobby and lobby bar to its big and beautiful spa, is urban and sleek.

For those expecting an extension of the Palms itself, think again.

The high-energy nightlife of Moon and Rain nightclubs, the Playboy Club, Ghostbar and the Pearl concert hall will be confined to the Palms, Maloof told me.

“There will be no big, loud parties at Palms Place,” he said. “We do that at the Palms, but that’s not what Palms Place is about. It’s a place to get away and be comfortable.”

Maloof expects about 80 percent of the condo owners will at least occasionally rent their units to hotel guests, boosting the Palms count from its current 702.

Maloof said those who’ve toured the place can’t wait to take occupancy.

“Their response has been phenomenal,” he said.

•••

South Point owner Michael Gaughan isn’t the kind of guy who minces words, and he didn’t during a recent conversation.

I had called to ask him about competition in the locals casino business, which has obviously intensified in recent months.

The reason for the increased competition: Operators are struggling to keep their business as locals reduce their gambling budgets because of recession fears, the housing slump and rising gasoline and utility costs.

“My business is picking up, but business overall is slowing down,” Gaughan told me. “I’m staying even with last year, because I’m getting more local people, but they’re spending less on each visit.”

Gaughan made me laugh when we discussed the recent Consumer Electronics Show.

Show executives had complained about sky-high hotel room rates and food-and-beverage spending requirements that could eventually drive the show to move to another market.

“Those people don’t gamble at all,” Gaughan said. “They don’t even play at the airport (where Gaughan runs the slots on a concession from Clark County).”

Gaughan said that for casinos like South Point, which rely primarily on gaming revenues, CES customers are a losing proposition.

“We have to raise rates during CES just to keep ’em out,” he said, noting that South Point gambling customers can qualify for a casino rate to beat the high prices during CES week.

The best kinds of conventions to bring in gambling customers, Gaughan said, are the reward-type shows.

“Shows where franchises and salesmen are brought in and the company pays for everything. Maybe they have two meetings, but they have plenty of time to enjoy themselves. Those are the shows that help the casino. CES is a working convention, and they just don’t like to gamble.”

It’s easy to understand why the nice Strip hotels that make most of their money from hotel rooms and food and beverage, and the convention authority, which tries to help keep hotel beds full at high rates, like CES. And the convention generates a lot of international press coverage of all the new gadgets, stories that carry Las Vegas datelines.

But it’s refreshing to hear a different perspective from an old-school casino owner who relies on gambling winnings and who isn’t worried about alienating the non-betting techies who overrun the city every January.

Jeff Simpson is business editor of the Las Vegas Sun and executive editor of sister publication In Business Las Vegas. He can be reached at 259-4083 or at [email protected]

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