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Rod Smith

Casino Development: Hopes High for High-Rise

16 August 2005

The South Coast is going to be a lot more than just another locals casino when it opens early next year, industry experts said Monday.

The $600 million project, which started filling 2,400 positions with a job fair Saturday, will be the first high-rise hotel-casino to be built south of the airport runways on Las Vegas Boulevard.

With its 1,350-room hotel casino, Boyd Gaming Corp. is likely to redefine the Strip, dragging it southward from Mandalay Bay, where it ends today, and setting up a new era for Las Vegas development, observers said.

"Location and timing are everything in the gaming industry and the South Coast is either genius or dumb luck on both scores," said one casino executive with a competing company who requested anonymity.

"Development has headed north toward a new city center around Fashion Show, The Venetian and now Wynn for several years," the source said.

"Now, it's going to boomerang south where Boyd is going to be set to hit a home run," the source said.

University of Nevada history professor Hal Rothman said development will inevitably head south as the community grows in that direction toward the planned airport in Ivanpah.

"It will leapfrog the runway, of course, and possibly even the 77 acres next to it, which used to be the most attractive property in town until MGM consolidated its monopoly game-hold on the Strip south of Flamingo," he said.

"It makes little sense for any development to directly challenge MGM in that area; leapfrogging the runway allows Boyd to develop in the sphere of MGM but in essence, apart from it," Rothman said.

University of Nevada professor Bill Thompson, who specializes in gaming studies, said the new resort will also benefit Las Vegas as a destination.

"It's important that South Coast has 1,400 rooms, not the required 200," he said. "No other locals casino has so many rooms. Boyd will be using the South Coast to bring players into Las Vegas, not just to pick Las Vegas pockets."

Jim Medick, chief executive officer of the MRC Group, Nevada's largest market research firm, said Boyd Gaming will be the first casino company to make a mark south of Mandalay Bay and others are certain to follow.

"With a strong customer database and a growing population, the resort will set the trend for others to try to beat," he said.

Construction is already finished on the 60-acre development and Boyd Gaming started hiring at Saturday's job fair, which featured a fashion show previewing employee uniforms, designed by Cintas.

South Coast Vice President and General Manager Mike Gaughan Jr. said more than 2,500 applicants showed up for the eight-hour job fair, 1,300 of whom submitted applications online at The Orleans. Others decided to apply later from home, and a few filled out paper applications.

Location, he said, will be key to the operation of the South Coast once it opens.

"We haven't had a presence in the south, or particularly the southeast side of the valley before. We're lucky enough (with South Coast) to be just off I-15 which will help grab tourists. The Orleans has always been successful filling 1,900 rooms with that," Gaughan said.

South Coast, the next major casino project set to open in the Las Vegas area, will include a 80,000-square-foot casino, seven restaurants, a 16-screen movie theater, a 64-lane bowling alley, a fitness center, 150,000 square feet of meeting space and what is billed as one of North America's finest equestrian centers.

Medick said when Boyd Gaming opens South Coast with its resort and convention amenities, it will enjoy the benefits of targeting two worlds: Strip tourists and the locals gaming market.

"The locals' (market) remains one of the hottest markets for gaming companies and as new home communities continue to pop up almost overnight," he said. "There are two things you can count on: a new grocery store and a new locals' casino.

"The south side is a great area. First and foremost, the population projections for the area are staggering and developers are throwing the kitchen sink into the community mix, from rentals to condos to first-time-home buyers to grand private gated communities," Medick said.

"The South Coast will be right in the heart of this mix as well as having grand visibility from I-15," he said.

"Plus, the Boyd group is not building their grandfather's casino. The new plans are designed to rival their No. 1 competitor, Station Casinos, and fit right into the soul of the community complete with everything from night clubs and movie theaters to an equestrian center," Medick said.

"To both the gamer and the investment community, this local resort, as opposed to a locals casino, is as an important of a move as when Circus Circus began the positioning move to Mandalay Bay," he said.

Rothman said for Boyd Gaming, the new resort represents a chance to continue its advancement toward being a premier Strip company.

"A 1,400 room property south of the existing Strip seeds the future, both for that part of town and for the company," he said.

"It's hard not to see a sizable property there as a precursor of the redevelopment of the Stardust, an attempt to work out the kinks in the process on a smaller property before starting what will likely be Boyd Group's biggest endeavor," Rothman said.

Thompson said South Coast will intensify Boyd's competition with Station Casinos, the second leading locals gaming company, while giving it a chance to jump ahead.

"Boyd will continue to be in a 'keeping up with the Station's fight,' but Station does not have a presence on the Strip, and Boyd does -- two places -- Stardust and Barbary," he said.

"Their next venture must be to firm up that presence with an implosion and a multiple-billion-dollar effort at the other end of the Strip," Thompson said.