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Gaming Guru

Chris Jones
 

Look Back Reveals Parallels With Project, Developer

25 April 2005

It's the fourth week of April, and all eyes are fixed on the Strip for the long-awaited debut of Las Vegas' latest playground for the fabulous, rich and famous.

The project's developing force has spent the past few years on the sidelines, his previous Strip investments sold off several years prior. But flush with cash and a dream -- and some unexpected investors who came aboard along the way -- the Las Vegas pioneer wasted little time building a larger, more extravagant resort not far from his old haunts.

In the weeks and months before the developer's return, the town buzzed with talk of his resort's lavish new rooms, world-class entertainment and a massive water feature designed to turn heads near the resort's main entrance.

Make no mistake, experts projected: This Las Vegas legend's comeback would re-energize the city's expanding tourism industry before his first customer ever walks through the door.

Contrary to what those facts suggest, however, the April in question is not 2005 but 1950. That year, Wilbur Clark opened his Desert Inn hotel-casino before a 10-year-old grammar school pupil named Steve Wynn first set foot in Southern Nevada nearly two years later.

The Desert Inn is largely an afterthought in the hysteria surrounding this month's opening of Wynn Las Vegas, a $2.7 billion megaresort situated on the same real estate along Las Vegas Boulevard South between Sands Avenue and Desert Inn Road. But no amount of attention for Wynn Las Vegas could erase its predecessor's place in this city's brief-but-colorful history. And both developments share some amusing parallels.

As is the case for its successor, expectations surrounding the $3.5 million Desert Inn soared when the resort opened on April 24, 1950.

"Wilbur Clark and his associates have given Las Vegas a big boost toward its goal of becoming the nation's leading resort center," proclaimed the cover story of a "Grand Opening Special Edition" of the Las Vegas Review-Journal published one day prior to the Desert Inn's debut. Articles described the hotel's many innovations, including "the only girl lifeguard at a Southwest resort hotel in pretty Jane Dillard."

Likewise, the Desert Inn's then 300-room count was hailed as "the largest number available in any resort hotel in Southern Nevada" at rates as low as $5 a night.

Wynn Las Vegas' first phase will feature 2,716 rooms, with the lowest rate paid this weekend in the neighborhood of $250 to $300 a night for a standard room.

No word on how many "girl lifeguards" -- pretty or otherwise -- will safeguard its swimming pools.

Clark started the Desert Inn with $1.5 million he earned through his 1946 sale of the Hotel El Rancho Vegas, as well as a subsequent sale of his Monte Carlo club on Fremont Street. After building restrictions and rising construction costs slowed development, he took on a group of Midwestern investors that included reputed, but never convicted, organized crime figure Moe Dalitz.

Clark died in 1965, and Dalitz & Co. were ousted two years later when billionaire Howard Hughes bought the Desert Inn for a reported $13.25 million. The 60-year-old Hughes, who had been living in the resort's penthouse since November 1966, decided to buy the property shortly after Dalitz and partner Ruby Kolod threatened to evict him before the busy New Year's Eve period.

Wynn, too, faced an eviction of sorts when Las Vegas-based MGM Grand acquired his former company, Mirage Resorts, for $6.7 billion in mid-2000.

No longer in charge of The Mirage, Bellagio and Treasure Island resorts he created from the ground up, the then-58-year-old wasted little time before moving on to his next attempt to re-create the Strip. Before the MGM deal had closed, Wynn announced he'd reached an agreement to buy the 215-acre Desert Inn property from Starwood Hotels & Resorts for $275 million.

The old Desert Inn closed Aug. 28, 2000, and in October 2001 Wynn's construction team knocked down the property's historic 14-story Augusta Tower to make room for a new project initially dubbed Le Reve, French for "the dream" and the title of a famous Pablo Picasso painting.

Wynn received a reported $500 million through the sale of Mirage Resorts and he initially planned to build his new megaresort using his own money because he dislikes the short-term, bottom-line driven mind-set of the country's equity markets. But in April 2002, Wynn said rising gaming stock prices and the need to offer stock options to his executives fueled a change of heart about private ownership, as did the resort's skyrocketing cost.

With the October 2002 completion of a public stock offering of approximately $450 million, Wynn -- like Clark before him -- had found the right financial partners to fulfill his development dream.