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Steve Wynn: It's Uncanny How Your Life Can Change in a Few Months

Steve Wynn said the Desert Inn had been for sale ever since Moe Dalitz owned it three decades ago. When Sun International boss Sol Kerzner, a Wynn friend, announced on May 17 that he was buying the property for $275 million from Starwood, he was staying at Bellagio. The next day, Kerzner breakfasted with Wynn.

Wynn: He was so excited, I got excited. We started talking about how to position the buildings. We were designing at breakfast on the back of a placemat. He had a delay, he had to get licensed ... During that gap his stock went down with all the rest ... when Sol decided to (take Sun International) private, he didn't have enough money to develop the Desert Inn site.

(When Kerzner pulled out of the deal), it was like God had intervened. Sol got out three weeks before Kirk (Kerkorian of MGM Grand) decided that he had fallen in love with Mirage Resorts.

Desert Inn golf course and pool, as seen from the hotel's ninth floor.

It's almost uncanny when you think about how your life will change in a short period of time. If you had told me on Washington's birthday in February that by the Fourth of July that I would have left the company I had built, sold it for $6.7 billion and that the Desert Inn would have been available for a million and half (dollars) an acre, I would have laughed in your face, I wouldn't have believed it could happen. ... I thought Bellagio was going to be the last hotel in Las Vegas.

Developing the property

Wynn will close the hotel by Labor Day and then begin razing buildings. Why knock it down?

Wynn: I can't protect the employees from the lamination of mistakes that have been made since 35 years ago when Moe Dalitz sold this place. ... It seems that every time one of the owners stepped up to fix it, they lost their focus, did every thing but the right thing. ... Nothing at the Desert Inn has been the way it should be.

When we came, it was judgment day. We wanted so much to keep the old hotel open as a training center until the new hotel was finished, but it's going to lose 30 to 40 thousand dollars a day.

Wynn believes the property will have a seven-year build-out, with as many as four hotels, the first one completed in about three years.

The second hotel will be adjacent to the first, much like Bally's and Paris. Another resort is planned for Paradise Road at the back of the 218 acres, to take advantage of its proximity to the convention center.

Wynn also believes that the development on the DI site will cause a "shift in the center of gravity from where it's been" and that the resort will naturally have walk-in traffic because of "a little, old pirate gimmick" at Treasure Island, which is 50 feet away from his property line and draws thousands of gawkers a day. As for the first hotel:

Wynn: Most importantly, we're going to rely very heavily on courtyards and gardens. ... This hotel will be a place when you move through it your eyes will be drawn to the rather cool, lush landscaping that will always be in view. ... All 10 restaurants in the hotel will project into gardens. When you leave, you will be surrounded by lifescape, by living material, but still be in air-conditioned comfort.

All of the properties will be lakefront. ... We're going to create a water stadium and have a variety of attractions that go from noon until midnight. This water stadium will be very modestly priced, 10, 12 bucks, 15, easy for everybody to afford. And you'll be able to come here twice a day. There will be stuff for daytime, stuff for evening. We'll rely on darkness and light and lasers and smoke.

What happened to Mirage?

Wynn publicly and repeatedly has stated his disdain for how Wall Street treated his company. Although he acknowledges problems in Mississippi with Beau Rivage, he says the analysts fundamentally erred in their evaluation that Bellagio swallowed Mirage customers:

Wynn: For 27 years ... on the whole we got treated absolutely wonderfully. But Wall Street changed ... the stock market is clearly a different place than it has been ... Companies that lose money are trading higher than General Motors.

The Mirage was a principal beneficiary of Asian business. Then the Asian business skipped town, which was $35 million to the bottom line ... (Even so), it was the most successful hotel in town besides Bellagio ... The cannibalization of Mirage was not an accurate statement. Mirage just lost a piece of business.

In Mississippi, we spent $700 million in a market with which we were not familiar. We were not perfectly targeted for the audience midweek ... Our success on weekends was unequivocal ... (But we were) not positioned the way we should have been ... The exaggeration of the response (by analysts) was totally disproportionate to the evidence ... These are not the opinions of people who matter. It's not clear what the thought process is. What is clear is the thought process is not rational.

Gaming in Nevada

Wynn: Gaming has been able to hold its own when it had its feet on the ground. When the gaming lobbyists haven't thought out our position, when they were acting like everyone else and being dumb sometimes, they lost.

Wynn brought up a 1999 bill designed to force IGT and other slot manufacturers to renegotiate contracts with resorts. Wynn, who is a friend of IGT Chairman Chuck Mathewson, clearly believes that the companies that tried to press the issue in Carson City miscalculated. He also brought up the Clark County Commission's passage of an anti-Wal-Mart ordinance last year as an example of a special interest overreaching.

Wynn: The union wanted it very much and had the support of a powerful County Commission coalition to stop Wal-Mart ... It was a totally outrageous and improper use of legislation, to use the Legislature for a competitive thing.

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