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Arnold M. Knightly

South Point starts project to expand

24 August 2007

LAS VEGAS, Nevada -- South Point has begun a $95 million expansion to meet demand for more convention space and hotel rooms, owner Michael Gaughan said.

The project includes a 25-story, 830-room hotel tower, nearly 10,000 square feet of conference space, two new restaurants and three bars.

"What's happened to me is I've started to do bigger convention business than I thought I would do," Gaughan said. "The problem I have is, I have no overflow rooms."

The restaurants and bars are scheduled to open by the end of the year. The hotel tower is scheduled to finish in July.

Occupancy rates at the hotel on the far south Strip are more than 90 percent during the week and close to 100 percent on weekends, numbers provided by the hotel show. Thirty percent of the rooms are filled by convention business.

Gaughan said he has trouble filling requests for conventions that want to book hundreds of rooms.

"I had a great one that wanted 1,600 rooms," he said. "I don't have the inventory. The most I could give them is 900 rooms."

The hotel now has 1,350 hotel rooms and 150,000 square feet of convention space.

Kevin Bagger, research director for the Las Vegas Convention and Visitors Authority, said 15 percent to 17 percent of visitors to Las Vegas are tied to conventions.

South Point spokeswoman Courtney Fitzgerald said the property views itself as a locals casino with significant convention space -- not one that competes with Strip properties.

Mandalay Bay, 5.5 miles north on Las Vegas Boulevard, is the closest property, with a large convention area at 1.5 million square feet.

Gaughan said his hotel receives a lot of overflow during the week from people attending conventions at other properties. He said the hotel expansion will probably be the property's last because he is out of space on his 51.5-acre site.

Gaughan, 64, sold his Coast Resorts company to Boyd Gaming Corp. for $1.3 billion in 2004 before South Point opened. He bought the south Strip resort back in July 2006 in exchange for nearly $512 million in Boyd Gaming stock.

He said he is happy owning and operating one property and is not looking for a new project around Clark County.

"For me, to run one hotel is pretty easy," Gaughan said.