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Best of Howard Stutz

Gaming Guru

Howard Stutz

Echelon won't restart for 'three to five years'

27 October 2009

LAS VEGAS, Nevada -- Boyd Gaming Corp. said this morning it doesn't expect to restart construction of the $4.8 billion Echelon project for at least three to five years.

The company suspended construction of the Strip development on the site of the former Stardust more than a year ago.

"We continue to believe in the long-term viability of the Las Vegas market," Boyd Gaming Chief Executive Officer Keith Smith said. "But given the ongoing weak economic conditions, the significant new supply coming online and a difficult capital-market environment for projects of this nature, resuming construction in the near term is not an option."

The recession reduced Boyd Gaming's third quarter profits. The casino operator said its net income fell about 27 percent in period that ended Sept. 30.

Boyd Gaming said its net income was $6.3 million in quarter, or 7 cents per share, compared with $8.7 million, or 10 cents a share for the same period a year ago. Analysts polled by FactSet Research estimated, on average, the company would report earnings per share of 12 cents.

Boyd said revenue fell 6.6 percent in the quarter to $398.2 million. The company blamed the slump on reduced consumer spending, especially in Las Vegas.

"Improved results in our Downtown Las Vegas, Borgata and Midwest and South regions helped offset softness in the Las Vegas Locals market," Smith said in a statement. "While visitation levels remained fairly constant, spend per visitor continues to be down significantly year-over-year, as consumers are still being cautious with their spending."