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Best of Benjamin Spillman

Gaming Guru

Benjamin Spillman
 

Jay-Z to open $20 million party lair

7 September 2007

and Jason Bracelin

LAS VEGAS, Nevada -- The last time Jay-Z was spotted at The Venetian was at the opening of Tao Beach, one of the newest upscale pool clubs that are the latest party trend in Las Vegas.

On Thursday, the rapper-turned hip-hop entrepreneur was back at The Venetian to announce the opening of his own venue, a $20 million party lair called the 40/40 Club, scheduled to open in December at the Palazzo, a 3,000-room hotel-casino that will adjoin The Venetian.

When it opens, Jay-Z, whose given name is Shawn Carter, will be the newest entrant to the Las Vegas club scene that's grown from a gimmick to attract late-night traffic to Strip casinos into an entire party industry with some clubs making tens of millions of dollars in revenue.

Jay Z's 40/40 Club, for example, will be a 24,000-square-foot sports-themed restaurant that club promoters say will feature 85 plasma-screen televisions, 24-karat gold and platinum flooring and five 40-foot, bi-level bars. The name refers to baseball players hitting 40 home runs and stealing 40 bases in a single season, a feat accomplished by only four players.

"We've always believed that sports and entertainment are cousins," said Jay-Z, describing the inspiration for the Las Vegas 40/40 Club and two others he and business partner Juan Perez have in New York and Atlantic City. "We started this to marry the two."

Despite the hefty investment in things like gold and platinum flooring, the 40/40 Club may not even be the most lucrative venue on its block.

The Venetian is already home to Tao, a restaurant and club that earned an estimated $55 million in sales in 2006, making it the top selling restaurant in the country. It was one of four Las Vegas venues in the top 15. Two of the other three are venues that include nightclubs, Mix and RumJungle, both at Mandalay Bay.

"Las Vegas is like no other place in the world," Jay-Z said of the nightlife scene that has mushroomed in Southern Nevada in recent years to rival party and celebrity hubs like New York and Los Angeles. "It is every other place on steroids."

Two major nightclub operators, Pure Management Group and The Light Group, lead the way on the Strip. Pure advertises 10 club-style venues on its Web site in Las Vegas resorts like Caesars Palace and Treasure Island and a company official recently told the Los Angeles Times its revenue has grown from $25 million to more than $120 million in recent years.

Light Group bills itself as one of the leading nightclub companies in the country and boasts five clubs and lounges on the Strip along with four upscale restaurants.

As recently as Aug. 31, two new clubs opened in Las Vegas, Pure's LAX at the Luxor, a mega-club that paid former pop star Britney Spears a six-figure fee to attend its opening, and Blush, a smaller club in Wynn Las Vegas.

As the competition has increased among high-end nightspots, so have the costs.

"Las Vegas has really changed the face of what nightclubs are," says Anthony Olheiser, general manager of Studio 54 at the MGM Grand, which is one of the longest running mega-clubs, having opened in 1997. "Right now, everybody is trying to one up everybody, so if somebody spends $15 to $20 million, somebody's going to be spending $20 to $25 million to make it that much more plush, that much more exclusive. I think what happens is that as the costs rise so high, you're going to have less and less players in the game, because they're just not going to see the value in that type of investment."

Still, Vegas remains on the cutting edge when it comes to clubbing.

In addition to Jay-Z, other celebrities who have had ownership stakes in Las Vegas clubs include basketball star Shaquille O'Neal, singers Celine Dion and Christina Aguilera, tennis players Andre Agassi and Steffi Graf and DJ AM.

"New York used to be the capital of night life in this country," Sean Christie, operator of Blush said in a interview before the opening. "You are not going to find $20 million night clubs in New York. Here, you look around the corner and you are going to hit one."