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Rod Smith

Bellagio Reopens

15 April 2004

LAS VEGAS -- Lights, action, check-in and gamble.

After 3 1/2 days in the dark because of a freak power failure, Bellagio turned the lights back on and began welcoming guests back to the 3,000-room Strip megaresort.

After an unexpected paid holiday from work while the Strip resort was shut down because of the Easter morning power failure, 2,000 employees were called back to work Wednesday to greet between 1,000 and 1,200 guests who had reservations to check into 800 rooms.

When the hotel opened about 5 p.m. Wednesday, there was a large crowd of people waiting 20-deep in the lobby to check in.

"I'm shocked and exhausted but thrilled to be here," said Roberta Koomer, a Piscataway, N.J., resident who was making her third trip to Las Vegas.

"Under no condition did I expect to see this mob scene. Our journey started yesterday at 5:45 p.m., and I feel like it's still going on."

But she added she was happy to be at Bellagio, MGM Mirage's flagship property.

Others were not so happy about the delays.

"This comes as a huge disappointment," said Deb DiDonato of Jackson, Tenn. "We booked the trip for my 50th birthday and it was very disappointing to be turned away yesterday, and we don't know yet if they'll be able to make it up to us.

"Still," she said, "It's very exciting."

A man from Somerset, England, who declined to give his name, said he and his wife had to find an alternative place for their baggage for four hours. The man said they had been awake for 24 hours, and he was exhausted and very, very frustrated.

"Still," the man added. "It's just a little hiccup at the beginning of our trip."

For company officials, Wednesday's reopening was a lot like a beginning, too.

"This was almost the same as when (Bellagio first) opened five years ago," MGM Mirage spokesman Alan Feldman said.

The biggest difference is that when then-Mirage Resorts Chairman Steve Wynn, who developed Bellagio, opened the $1.6 billion hotel-casino in 1998, it opened all at once.

On Wednesday, however, Feldman said the Strip resort would have very limited food and beverage service available Wednesday night.

Initially, the hotel offered a buffet and a full bar for guests in the convention center, while room service, the Cafe Bellagio, lounges and bars were to open later in the evening.

The remaining restaurants, including the resort's gourmet restaurants, shops and the art gallery were expected to open today or Friday.

Performances of Cirque du Soleil's "O" are scheduled to resume at 7:30 and 10:30 tonight.

Bellagio's problems began Easter morning when an "unknown event" disrupted the hotel-casino's primary power about 2 a.m. The disruption, which burned thousands of feet of power lines at the megaresort, led Bellagio officials to begin closing the property Sunday, moving guests to other properties and ultimately sending 7,000 employees home because its backup power system had to be shut down.

The cause of the blackout is still under investigation by the company and county officials, and sabotage has not been ruled out although it is considered unlikely.

Still, anti-terrorist and gaming industry experts said the incident underscored the city's vulnerability to terrorist attacks and should serve as a clear signal that all reasonable steps need to be taken to protect critical infrastructure such as electrical systems.

The company has said there was a cable failure in an electrical vault that compromised two of the hotel-casino's main power circuits, he said.

That failure created overheating in the vault, which damaged all adjacent power cables, Feldman said.

In order to safely assess and repair the damage, the remaining power lines, including the backup power lines, had to be shut down.

He said employees on duty Easter morning took all appropriate safeguards in response to the blackout and the hotel's emergency systems functioned "flawlessly."

"While it could well have been that the cable failure was simply a random event, we continue to investigate all possible causes," he said.

"While it is not uncommon for a building of this size to lose a single circuit, it is very rare to lose two simultaneously," Feldman said.

Feldman said Wednesday the company has hired a forensic engineer and shipped some of the damaged cable material to a technical laboratory for testing as part of its investigation.

He said there are no plans to redesign or re-engineer the generators, electrical systems or cable conduits until the investigation is complete.

"We need to understand what happened to understand prevention measures," Feldman said.

"It's easy to second guess building the system, but no one has ever had the problem and no one would have built (a system intended to prevent a problem that had never occurred before)," he said.

Deutsche Bank analyst Marc Falcone has said the property stands to lose at least $3 million a day in revenue and $1 million a day in cash flow, a key measure of profitability.

Feldman has said the final costs will certainly go higher, but the amount will not be material for a company the size of MGM Mirage.

At a press briefing earlier in the week, Feldman called the incident relatively innocuous since no one was injured.

However, Nevada Homeland Security Adviser Jerry Bussell said the incident illustrates how a power failure can erupt into a major dislocation.

If a single, random, minor event can close a major Strip property, a concerted attack could have nearly unimaginable consequences, he noted.

"I don't see any evidence of terrorism or sabotage, but it shows the importance of infrastructure. If (terrorists) could take out some of the critical infrastructure, it would have far-reaching and long-term consequences. That's why we have it right at the top of our priority protection list," Bussell said.

University of Nevada, Las Vegas professor and casino industry expert Bill Thompson compared the incident to the MGM Grand fire.

"It underscores our vulnerability. Since our economy is so dependent on these properties, it makes us doubly vulnerable. Our police and the FBI have to look at this and make sure it's a design flaw or a freak incident and wasn't caused by deliberate human action," he said.

"Then they have to identify key points and make sure we have the security we need. In some ways, it's like the MGM fire of 1980. That alerted us to the need for increased fire security and safety," Thompson said.

More than 1,000 engineers, county inspectors and Gaming Control agents hustled through the night and all day Wednesday to complete repairs, inspect all the hotel-casino systems and recertify building, health and fire permits and the casino's gaming operations.

County building, fire and health officials OK'd the building for occupancy late Wednesday afternoon, and the lights were turned back on.

County building official Ron Lynn said the building was approved for occupancy about 4 p.m. Wednesday.

After the lights were rebalanced, Gaming Control Board agents checked out the computer memories on all slot machines and the operations of surveillance equipment, and gave the green light for the casino to reopen early Wednesday evening.

Gaming Control agents examined the surveillance system after power was permanently restored and made sure the casino had the coverage required by law and met all state standards.

One outstanding issue that will have to be addressed involves a small number of customers who claimed to have more than $100 in slot machines when the casino was closed during the day Sunday.

Guests with reservations for another 1,000 rooms will arrive today and the hotel should be fully occupied again Friday, Feldman said.