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Gaming Guru

Arnold M. Knightly
 

Eastside Cannery celebrates 1-year anniversary

28 August 2009

By Arnold M. Knightly

LAS VEGAS, Nevada –- When the Eastside Cannery opened a year ago today, the cracks in the economy were beginning to show.

But even during the recession, the $250 million hotel-casino on Boulder Highway has been able to attract a loyal customer base, principal owner Bill Paulos said.

"As we mature as a property, we will certainly grow that niche," Paulos said. "We are going to continue to flesh out what our customer wants. In times like these, we need to listen to our customers more instead of less."

The property will have a low-key celebration for the anniversary with free cake and champagne from noon until 6 p.m. today, and from 2 p.m. until 6 p.m. Saturday and Sunday. The property will also have free slot tournaments and free shirts tonight.

The "newness" of the Eastside Cannery has lingered for customers because it is the first new hotel and casino along that stretch of Boulder Highway since Boulder Station opened in 1994. The area includes Sam's Town and Arizona Charlie's Boulder.

One of the biggest challenges has been to "cut through" all the promotions offered by both locals competitors and Strip operators trying to lure area residents, owners said.

The current economic atmosphere has led to a consumer's market in the casino industry, with companies offering room, food and show specials and large discounts.

"There's no question, it's tough out there," Paulos said. "Everybody's in the same boat. Everybody's now throwing stuff against the wall hoping something will stick. The consumer now, it's their market. They can put a calendar on the wall and mark down every special there is at each casino and go to each one."

The Eastside Cannery is on the Boulder Strip, the third- largest gaming sector by revenue in Nevada.

Gaming revenue in that area was down 2.84 percent for the second quarter ended June 30, and down nearly 10 percent the previous 12 months ended June 30, a report from the Gaming Control Board shows.

The occupancy rates for the 307-room hotel have been "wonderful," Paulos said, but he added that the average daily room rate has suffered due to pressure from area properties and along the Strip.

"Our (room rates) absolutely have suffered a bit," Paulos said. "But not nearly as much as I would have thought. We really feel really good about where we are."

The company is privately owned by a joint venture between Paulos, co-founder William Wortman and Oaktree Capital Management.

The company continues to work on growth plans for the Eastside Cannery, and is finishing plans for a parking garage on the 27-acre site.

The Eastside Cannery features a 16-story hotel tower, a 20,000-square-foot ballroom with meeting spaces, a 450-seat bingo hall, six restaurants, and a pool, spa and sports book.

The future looks good for the Eastside Cannery's owners, Cannery Casino Resort, Paulos said.

The company recently reduced its debt to $575 million from $860 million using proceeds from a sale of 24.5 percent of the company to Crown Ltd. Crown also paid $50 million to suspend a buyout of Cannery.

Wortman has been out of town this week exploring opportunities for the company to grow, Paulos said.

"That is because of the financial situation we're in, Bill and I are able to devote most of our time to going out and expanding the brand," Paulos said.