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Best of Howard Stutz

Gaming Guru

Howard Stutz

Gaming in Nevada: New North Strip Hotel Planned

6 June 2006

LAS VEGAS, Nevada -- The north end of the Strip has picked up another potential tenant.

Maxim magazine and Southern California-based real estate developer Concord Wilshire Partners announced plans Monday for an estimated $1.2 billion hotel-casino themed on the best-selling men's lifestyle magazine.

The magazine's publishing company said it hoped to open a 2,300-room hotel with a 60,000-square-foot casino just north of Circus Circus and Riviera in 2010.

"It's not a themed place along the lines of New York-New York or The Venetian, but it's what we would describe as a fun, stylish and modern resort with a four-star hotel that is accessible with great service and great amenities," said Barry Pincus, director of brand development for Dennis Publishing.

Concord Wilshire spent $90.25 million last year to acquire four parcels totaling 7.65 acres, according to the Clark County Assessors Office.

The largest parcel, 5.12 acres, has an entrance off Circus Circus Drive. Two smaller parcels give the property some valuable Strip frontage while a parcel of less than half an acre expands the entrance from Circus Circus Drive.

The Maxim project is directly across Las Vegas Boulevard from where Turnberry Associates and former Mandalay Resort Group boss Glenn Schaeffer said they would build a $1.5 billion Las Vegas version of the Fontainebleau, a Miami Beach hotel.

The site is surrounded by Circus Circus's low-rise motel rooms and the hotel-casino's recreational vehicle park and is in the shadow of the 40-story Sky Las Vegas condominium tower.

Concord Wilshire Chief Executive Officer Steve Sirang did not return phone calls Monday. In a statement, the company said it has $7 billion in projects under development but is new to the hotel and casino business.

In 1988, Sirang, a former stock market trader, was convicted in federal court of seven counts of bank and wire fraud in connection with bad checks and illegal fund transfers during the 1987 stock market crash. A federal appeals court upheld the convictions in 1995.

On six of the counts, Sirang was sentenced to one year imprisonment for each conviction to be served concurrently, five years suspended sentence on one count, and five years probation with a condition that he pay $1.4 million in restitution. It is unclear whether he spent any time in prison.

Dennis Publishing is aware of Sirang's convictions.

Pincus said a hotel operator and an experienced casino operator would be brought in to oversee the day-to-day operations of the Maxim. Design of the project is still preliminary, but Pincus said 2,000 of the rooms would be designated as condominium-hotel units, rooms that are owned by private investors but turned over to the hotel management and leased to guests when not in use.

Concord Wilshire, Pincus said, would handle financing for the project.

Gaming Control Board member Mark Clayton said even if Concord Wilshire is just the landlord for the Maxim hotel-casino, some investigation may be required by Nevada regulators.

"Given the criminal conviction, it seems we would have to examine the matter even if it's just an informal review," Clayton said.

With much of the land on the Strip's south portion accounted for, development activity has begun to focus on the Strip's north end.

The Sahara is for sale, the Riviera is being sold and Boyd Gaming Corp. is planning a $4 billion redevelopment of the 63-acre Stardust site.

Morgan Joseph gaming analyst Adam Steinberg said the Maxim project is a long shot from the start.

"You have two companies with no experience in the gaming industry and it's not in a great location," Steinberg said. "The subscribers list to Maxim is a decent start to a database, but they are going to have to bring in a very experienced team to run the casino."

Rob Frankel, a national branding expert, said Maxim has surpassed Playboy as the leading men's lifestyle brand magazine. If the property is built, the brand should translate easily to a Las Vegas audience.

"Maxim is what young men in Las Vegas are all about," Frankel said. "Las Vegas and Maxim are very compatible brands, far more than Playboy. Playboy was 'it' during the Rat Pack era but they are not the voice and style of young men today."

The Maxim, based on the magazine's emphasis toward the interests of a young and affluent male audience, would seem to be in the market to compete with the Palms and Hard Rock for customers. Maxim magazine has been published in the United States since 1997 and has a circulation of more than 2.5 million.

Dennis Publishing is being paid an upfront fee for use of the Maxim name. The magazine's owner would also collect an annual fee and would share in revenues generated by hotel rooms, restaurants and retail operations.

However, Pincus said Dennis Publishing would not pursue a Nevada gaming license and will not share in the casino's gaming revenue.

"Obviously, we're still in early in the project but Maxim will be actively involved in all aspects of the development of the hotel and casino," Pincus said. "We will decide the overall look and feel of the property."

Pincus said a lounge operated by Rande Gerber, who runs the Cherry nightclub at Red Rock Resort and the Whiskey Bar at Green Valley Ranch Resort, would be part of the Maxim.

Blender magazine, a music-oriented magazine operated by Dennis Publishing, would have involvement in the indoor and outdoor concert spaces.

The name, "Maxim," is not foreign to Las Vegas. A Maxim hotel-casino, not affiliated with the magazine, operated on East Flamingo Road across from Bally's for several decades. The property is now owned by Columbia Sussex Corp. and is known as The Westin.

"We think enough time has passed so there wouldn't be any confusion," Pincus said.