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Gaming Guru

Jeff Simpson
 

Cannery Going Strong After First Year

5 January 2004

First-year performance at the Cannery was strong enough that the property now has plans for a multiscreen movie theater, additional casino space and a parking garage, owners Bill Wortman and Bill Paulos said Friday.

Business has continually improved after a slower-than-hoped-for start blamed on pre-war jitters dampened the opening of the $105 million North Las Vegas locals casino, the duo said.

"We're very pleased at our growth," Paulos said. "The war hurt us, and every one else, but we had a terrific summer and a good fall."

The Cannery has generated cash flow "at or above the average (13 percent) return on invested capital (for the casino business) in Las Vegas," Wortman said, meaning the Craig Road property has generated at least $13 million in cash flow since opening on Jan. 3, 2003.

Wortman and Paulos said they hope to begin construction on their planned expansion by the end of June; a 2,000-space parking garage alone would cost about $15 million, they estimated.

Driving the property's performance are three critical factors, Wortman said: an improving economy, dramatic population growth in the surrounding North Las Vegas area and a property that gives people what they're looking for in a locals casino.

The property, which has a 1940s industrial theme, has 1,275 slot machines and 21 table games, with a few more video reel, 1-cent and 2-cent machines and a few less video poker machines than when it opened.

The Cannery's slot club takes dead aim at a perceived weakness of its biggest competitor, Station Casinos, by offering cash back or comps instead of only comps to its American Can Club slot club members.

"Cash back is a better deal for our customers," Wortman said.

One observer likes what he sees in the Cannery.

"They've got a pretty good touch out there," Las Vegas Advisor publisher Anthony Curtis said. "The management has a good handle on things. The Cannery is still a work in progress, but it seems to be a successful, well-run operation."

The hotel has also done well, Wortman said.

When the Cannery owners opened the property, they hoped its 201 hotel rooms would be 70 percent occupied and generate an average daily room rate of $40, he noted.

During its first year Cannery rooms were about 82 percent occupied at an average rate that Paulos said was more than $60.

Paulos said they've had few problems they've had to fix. The slot machine mix was changed slightly and a small poker area was added to the table game pit.

Events held at the Cannery's special events venue, The Club, have, for the most part, been successful.

For example, a springtime Blues, Brews and Bar-B-Q event and radio-station sponsored gatherings drew big crowds, while a National Football League-themed football weekend last January drew few patrons and won't be repeated.

Station Casinos' dominance of the North Las Vegas market, with its Santa Fe Station, Texas Station, Fiesta Rancho and Wildfire properties, still leaves plenty of room for the Cannery's success, Paulos said.

Big companies like Station have a lot of access to cash and the ability to spend, he said.

"But their decision-making is slow, and it's tougher to talk to the boss," Paulos said. "They're an aircraft carrier; we're a PT boat. By the time they can start to turn, we've executed a couple of 360s."