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Best of Liz Benston

Gaming Guru

Liz Benston

Two New Resorts will give Henderson Piece of the Strip

18 October 2005

Six miles south of the Strip on Las Vegas Boulevard, two relative newcomers to the gaming business are betting big on resorts that aim to create an alternative for tourists.

Anthony Marnell III last week received preliminary approvals to build the M Resort, a $1.8 billion mixed-use casino, resort and commercial center on 79 acres at the southeast corner of St. Rose Parkway and Las Vegas Boulevard.

Marnell, who founded a software company called Tririga, is president and chief executive of M Resort. He will continue to run the software company.

Marnell is the son of prominent casino developer and builder Anthony Marnell II, better known as Tony Marnell. Tony Marnell's firm, Marnell Corrao Associates, will design and build the M Resort.

The firm built Wynn Las Vegas and Bellagio. Tony Marnell also built and operated the Rio before selling it to Harrah's for $888 million in 1999.

Across the boulevard from Anthony Marnell's project, Olympia Gaming received approval from the Clark County Commission earlier this month to build the Southern Highlands Resort. The previously announced resort, part of another mixed-use development to take shape on about 100 acres, would ultimately cost more than $2 billion.

Olympia Gaming founder Garry Goett, developer of the nearby Southern Highlands master-planned community, also owns the Casino Fandango in Carson City.

Both resorts, conceived and developed independent of one another, are expected to begin construction next year for planned openings in 2008.

Both developers say their projects will ultimately benefit from having competition nearby, creating an eye-catching resort district that will lure people driving into Las Vegas from California as well as locals and tourists from further away.

Marnell said the skyrocketing cost of land on the Strip wasn't a significant factor in deciding to build so far south. The site was appealing because it's a "gateway" to the Las Vegas Valley, he said.

"It's the first stop into the city and it's the last stop out of the city, right off (Interstate) 15," Marnell said. "I think the south Strip has the potential to become the next destination resort corridor for Las Vegas without the congestion of the Las Vegas Strip. I think there's a good market for people who are looking for a quality product with all the amenities that a Las Vegas Strip resort offers ... that's a bit more secluded."

Initial M Resort plans call for a 135,000-square-foot casino, 600,000 square feet of retail and other mixed-use space, a roughly 100,000-square-foot convention area and 1,000 hotel rooms.

Across the boulevard, the first phase of the $750 million Southern Highlands would include 600 hotel rooms, a convention area, more than a dozen restaurants, an entertainment venue, retail shops and several acres of pools and gardens including a lazy river.

"It's not going to be a pretentious project," said Olympia Gaming Chief Marketing Officer DC Graham, a former marketing executive for the Venetian. "We want to build a place that's approachable. It needs to be very comfortable and a place that locals want to come to ... with blue jeans and a baseball cap."

While M Resort will probably mean stiffer competition and therefore more deals for local gamblers, it will also help attract customers to the neighborhood, Graham said.

"We would like to see a project of the scope they've developed in the past," he said of Marnell Corrao Associates. "The Marnells do things right."

John Knott, senior vice president of CB Richard Ellis' Global Gaming Group in Las Vegas, said both developers are taking a bigger risk by locating so far from the central Strip neighborhood.

"You have to do your own marketing, and you have to have your own cachet to make your property successful," Knott said. "They won't have thousands and thousands of people walking by their front door.

The resorts won't be able to depend on drive-in traffic, nor can they survive on local customers alone, he said. They will also need to appeal to tourists flying into Las Vegas, he said.

"It's a longer drive down there from the airport, so they're going to have to do something different from a marketing perspective," Knott said.

Visitors driving to Southern Highlands from the airport will avoid Strip traffic moving in the other direction, likely arriving at the same time it would take to drive to a central Strip property, Graham said. Both resorts also will benefit from a major freeway interchange expected to open in 2007 at St. Rose Parkway and I-15, he said.

Marnell said his resort will feature Strip-quality amenities in an atmosphere that will be different from other resorts.

"It will be a completely different idea from the Rio," said Marnell, a former marketing executive for the Rio when his father owned and operated that property. "We're going to take some of those ideas to the next level. We're looking at what will (appeal to customers) for the next 15 to 20 years."

The resort won't have a theme, Marnell said. It will be Strip quality but won't be "superpricey or superexotic," he added.

Located on land recently annexed by Henderson, the M Resort would be the biggest resort built within the city's limits.

Henderson's Planning Commission voted 7-0 to recommend approval for four applications connected with the resort, including a use permit and a zone change from rural use.

Not as far along in the permit process as Southern Highlands, the M Resort is expected to go before the Henderson City Council on Nov. 1.

The hotel would be on par with some Strip resorts and much larger than nearby properties including Green Valley Ranch Station Casino in Henderson and Boyd Gaming Corp.'s South Coast, which is expected to open by the end of the year at Las Vegas Boulevard about two miles north of the two planned resorts.

Those casinos are about 92,000 square feet and about 80,000 square feet, respectively. The Southern Highlands resort will have a casino that's between 80,000 and 100,000 square feet.

Phase II of the M Resort would include a second, 1,000-room hotel tower as well as 1,944 condominiums. Both phases would total 7.3 million square feet. Some buildings could be more than 100 feet high.

"This is a resort of a magnitude that we have never seen in Henderson before," Henderson Councilwoman Amanda Cyphers said.

At first blush, the proposal appears to be appropriate for the region because it's on Las Vegas Boulevard, Cyphers said.

"It's our first opportunity to have something like this that continues the Strip, but is in Henderson," she said.

At a neighborhood meeting last month, residents surrounding the proposed hotel raised concerns about traffic and noise and posed other questions about the widening of the boulevard.

Others expressed concerns about protecting the rural quality of the neighborhood.

The nearest homes are about 680 feet from the proposed gaming district, a bit more than the length of two football fields away.