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Green Valley Turns One on Wednesday

LAS VEGAS -- Green Valley Ranch Station Casino turns one year old Wednesday, and for owners Station Casinos and the Greenspun family, it'll be a very happy birthday.

Station Casinos operates the $300 million locals casino, and President Lorenzo Fertitta said the property located adjacent to the Las Vegas Beltway at Green Valley Parkway has had a remarkable year.

Despite a tough economy and a tourism downturn during one of the toughest casino operating years in memory, Green Valley Ranch exceeded Station projections, Fertitta said.

"The product we built was the next evolution in locals casinos," he said. "We've grown the market."

Green Valley Ranch is generating about $30 million in revenue each quarter, and will make about $45 million in operating cash flow during its first year.

Operating cash flow is defined as earnings before interest, taxes, depreciation and amortization, and is a widely used gauge of casino industry profitability.

The cash flow result would be the best ever for a first-year Station property, beating the record of Sunset Station's first year by a "meaningful amount," Fertitta said.

Before the property opened Station bosses predicted that Green Valley Ranch revenues would take away business from Sunset Station and Fiesta Henderson on a dollar-for-dollar basis.

The cannibalization proved to be much more benign, Fertitta said.

"Sunset was not hurt as much as we thought, and we're very happy about that," he said.

Green Valley Ranch's first-year performance demonstrates the wisdom of the 50-50 partnership, Deutsche Banc Securities analyst Andrew Zarnett said.

"Station has a prime location and the Greenspuns get a top operator, the most experienced, with superior marketing and operational capability," Zarnett said.

Station Casinos jumped at the opportunity to invest in the Greenspuns' prize casino location, despite having to split profits. The Greenspuns were going to develop the casino site, smack dab in the middle of one the valley's choicest demographic communities, with or without Station.

"That's easy," Fertitta explained. "50 percent is better than nothing."

And the Greenspuns also made a wise choice in deciding to land an experienced operator, Zarnett said.

"There's no certain success," he said. "Look at the former Regent Las Vegas. Do they want to fail because of a lack of experience?"

Key to Green Valley Ranch's success has been strong hotel business and a solid marketing plan, he said.

Green Valley Ranch's 201 hotel rooms have averaged rates about 2 times the $50 average price the property's other hotel rooms carry. Occupancy's also been strong, Fertitta said.

The company is currently working on plans to add additional hotel rooms, banquet and catering space, although the plans are too premature to discuss, he said.

Fertitta said the property's marketing plan allowed the company for the first time to break out of the standard local casino mold, attracting customers from outside the traditional three- to five-mile radius they traditionally market to.

Green Valley Ranch still gets the company's core demographic, the mostly 55 and older gambling customers, many of whom play video poker.

But the property's mix of restaurants, proximity to the airport and location near Green Valley offices and homes allow the casino to capture business from casual gamblers as well, he said.

The property's Drop Bar in the middle of the table game pits and its Whiskey Sky bar have attracted a younger crowd, gamblers that head for the blackjack and craps tables, Fertitta said.

"We've been able to drive additional table game revenue by evolving the product," he said. Green Valley Ranch tables outperform the tables at all company casinos. "We're trying to maximize every possible revenue stream."

Fertitta said the company's had to make few adjustments to its preopening game plan.

Upscale Mexican restaurant the Border Grill closed after it failed to generate hoped for business, and will be replaced by an Asian restaurant.

"You always make adjustments to the game plan, but this plan's worked very well," he said.

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