Two Way Hard Three | Las Vegas Casino & Design Blog

Amazing! Do you guys understand the implications of this? This will forever change Las Vegas forever. This just really came out of nowhere, and I didn't think Harrah's had it in them to come up with such a fantastic and unique idea as this. Wow, this just comes to show, never count out these guys.

COME ON.... Are you freaking serious? They are the largest casino company in the world, and this is their big grand idea? They need to come up with some great, and I mean fast. They might be the biggest in the world, but if they don't act soon, they will be totally crushed in the Vegas market in the coming years. CP is about the only hotel they even have worth mentioning, Paris is ok, but give me a break already! These guys are going to just get burried if they dont clean up some space and start something major and grand very soon. I can't tell you how disappointed I am to hear, they called a conference for this!

Best part of this whole deal: "privately financed".

Well, it's not like we didn't know this was going to happen. I mean, come on, did anyone expect the announcement that each of their properties, from Harrah's to Bill's Gamblin' Hall, will be imploded and sold off to Wynn Resorts so that someone can actually build something "breath-taking" on that site? No. Instead, we got this wonderful little announcement that the already f***ed up corner of Flamingo and Las Vegas Blvd. will now be home to over three-thousand to twenty-thousand new cars trying to make their way in to and out of this, as it will most likely turn out to be, 20,000 seat work of Satan.

Posted by mike_ch

Brian, not everybody needs to keep up with the Wynns. Harrah's has a LOT of space to clear off, particularly the space containing IP, O'Shea's, and Harrah's itself. They might not be announcing anything that'll cost you $150+ for a room, but they don't really need to. Furthermore, I'm not confident they have the money to.

If Harrah's can keep their noses clean and their bulidings maintained, they'll be the place to turn to for low and mid rollers simply by process of no alternatives.

Posted by DavidF

My First immediate thought on seeing this news this afternoon was �Wow Just what Vegas needs after the Fiasco that was All-Star Weekend�, I can�t see a NBA Franchise coming/moving here, but then again Money Talks. A NHL maybe, but Hockey is currently the poor relation of the major sports right now.

I can�t help but agree with John, It�s a waste of time trying to get anywhere near downtown Dallas on game nights, and the rest of the place is a dead zone after 5pm, so heaven help us around the busiest section of the Strip, the only way I can see it work is if they leverage the Monorail as some sort of Park and Ride.

Talking of Leveraged, I can�t see anything major happening on the Harrahs �Block�, in terms of knocking down/rebuilding/re-imaging, you have to look at the Money Markets right now, they don�t have and probably can�t get the financing to make it happen, the recently announced conversion of IP to Total rewards says a lot, at least IMHO.

Wow I am �Mr. Optimistic� tonight aren�t I?

Posted by Mark D

This is just the first phase in their multi phase master plan. Obviously credit has tightened and the highly leveraged privatization must make it really tempting to sell something. But how much can they get for the Rio? And the only value in the IP is the land. They won't get anything near the $5 billion Dubai World is pumping into MGM.

Anyway, the traffic over there where the arena is proposed has always been really bad when it's busy, and a big event night at an arena there will be a gridlock nightmare. Are there any plans to turn the Harmon overpass (closed right now) into an actual interchange with I-15? That might help, but I can't think of much else they can do to improve traffic, especially if they expect locals to support a major league home team (can a home team be supported solely by tourists?). Maybe they'll blow up Bally's and put in twelve more lanes on Flamingo.

As an aside, Station Casinos is also thinking of building an arena south of Palace Station, but that would probably be a little smaller and they would base the Ultimate Fighting Championships there. The Fertitta's own the entire UFC outright (http://en.wikipedia.org/wiki/Zuffa) and it is currently the fastest growing spectator sport in the United States. They won't need to court the NBA or NHL like Harrah's and Pulse are doing. And the traffic isn't any where near as cramped as Flamingo and Koval.

Imperial Palace is going to Total Rewards? Interesting. Speculation: TR members with lower ADT will be steered to IP for comp rooms. This will free up more revenue rooms in the other properties in an attempt to increase hotel rooms revenue.

Posted by mike_ch

I don't know why people are going on about a team. There is no team. Harrah's is locking the big event money on this one. Think of how much money stands to be made from something like a boxing match if they take those events from T&M.

I helped a friend look for a room during a boxing weekend last night. Excalibur was running over $200 a night. Little old Bill's over $300 a night. It's insane. Really, the only thing Harrah's could have done better was move this even further in towards the center of their strip zone, so as to be less fortunate to Bellagio, CityCenter, and Planet Hollywood.

Posted by detroit1051

Mike_ch, doesn't MGM Grand Garden already have a lock on boxing, concerts and other big events? Does the Strip really need another similar venue?

Posted by detroit1051

RJ on arena:
http://www.lvrj.com/news/9329031.html

Posted by mike_ch

My friend who comes to Vegas for boxing always is at events at Thomas & Mack, not MGM Grand. MGM-Mirage owns Grand Garden as well as Mandalay Event Center (which has become a lot less used/important venue under MGM's ownership than the old Mandalay Group it seems) but all the big title fights, as well as professional wrestling shows, etc, are at the T&M.

All I know is that Mayor Goodman must really be kicking back the gin right now, as an arena has basically been the plan he'd never say die on, and now one is being built outside of city limits where he can't tax it.

Sorta related -- here are some more details on the Caesars expansion:

http://www.newcityskyline.com/CaesarsPalaceExpansion.html

This reads more like a press release than a news story, but it adds some details to previous articles. I wonder how they're going to get this done by 2009. Have they even started site prep yet?

Will this just be a low lever building, or will there be a tower on top?

Posted by Mark D

It's Harrah's and AEG that are saying it will be built for a major league home team. I wonder what they have planned for the other 25 acres next to it? I don't think the Total Rewards offered at IP is a guarantee that IP will last more than two or three years.

NBA in Vegas was probably going to happen. Now with the Donaghy scandal I'm not so sure.

Though I am far from an expert on any sort of Vegas matter, I am only but a casual observe. But this idea is great for single night events, concerts, boxing, UFC, etc etc. Parking on nights like that won't be bad as foot traffic to said venue will be the best way to travel. But for a season event (NBA, NHL etc) there would be a huge issue in parking and just generally getting in and around.I think they won't have a suitor in a major pro sports team for many years. Smaller leagues (AFL,NLL,MInor League Hockey) may jump at the chance for a venue this close to the strip. Which I guess would be a good training ground for a major pro league to move in.
But imagine if Harrahs uses this idea and now remodels Ballys into a Hotel you might actually want to stay at and is no longer just a dump between Bills and Paris, they can milk it for all its worth. Turning this portion of the "Master Plan" into a money making idea for a long time. If I was a vegas noob I would probably attend a concert at said venue if I knew that I could stay as close as Balllys, I imagine MGM must do a lot of business when they have concerts at Grand Garden. I like this idea but there are a lot of questions that need to be answered before its truly a great success.

Posted by Mark D

They say they need 150 events per year just to break even on a venue like this, and that's considered optimistic.

I actually agree with Brian on this, and I'm not a fan of Wynn in the least, 'cept for his Buffet!

Stadiums and Arenas don't bring in the kinds of revenues and instant cash flow that casino and lodging do. As has been said before, the problems with the NFL All-Stars last February, the insurance bonds that Harrah's or the City will have to put up, plus the problem with Sports Betting.......brings far more aggrivation than it does in revenue returns.

I think it's the wrong direction for Harrah's, and the wrong direction for Vegas, going by last February's All-Stars.

One-time boxing matches, stunt venues, and Sports Books are one thing; but the expense and maintenance of trying to acquire and keep an NFL Team in Vegas is going to be an exhausting expenditure of money and resources, for a company (Harrah's) that expects to see instant profits.

What is the logic of fighting traffic, paying for a ticket, the hassle....of seeing a live sporting event---when I can just watch the same thing for free in a comfortable Sports Book ???

Remember, they've gotta fill 20,000 seats to break even, and those 20,000 people are being pulled off of the slot machines---which is a definite source of income for a casino.

I can't believe the NFL would even consider partnering with a casino, and it seems like a conflict of interest given the big sports betting scandals (Pete Rose)...the NFL, in particular has been trying to clean up its act.

It's an unproven venture. A new convention center would be better, or even more shopping, which there's too much of as it is. They could always re-purpose convention or shopping ventures or toss in slot machines. With an arena, if it goes empty, the cost of air-conditioning, and maintenance.....a big white elephant that they're not going to be able to do anything with!

Posted by mike_ch

It's going to pull people out of the casino? So what! Nightclubs, ultralounges, showrooms, and concert centers already do all this. There's plenty of people who avoid caisnos by principle, and from purely circumstantial evidence I can tell you myself that the games in the casinos are so much tighter than they used to be that they can have fewer players and still make as much money as they hoped to.

And an arena can be doubled as extra convention space, I've seen it happen before. San Diego's Comic-Con is as large as Las Vegas' largest conventions and still growing, and the organizers there are looking at expanding into Petco Park. It's not the most efficient design but it works.

The thing is if somebody didn't take this initiative there probably would have been an arena built elsewhere and it would have been even farther away from where HET/MGM/etc want their customers to be.

I can't figure out who's so unhappy here. HET shareholders? The company is going private anyway, it won't be your risk.

A lot of negativity on this thread. How many of you actually live in Las Vegas?

Posted by Mark D

Sure, Harrah's will make money off of it just like all the other big venues on the Strip bring in customers. My main complaint has to do with locals being able to support a major league home team. Locals pretty much avoid the Strip as much as possible, everyone knows that. So I guess Harrah's is banking on out of town fans rooting for the visiting teams. Actually not a bad strategy for filling casinos after the games, because the locals will just go home after the game. But what kind of players are they going to sign to a team with no local fan support? The home team will mostly be booed at by the out of towners at every game and have a distinct disadvantage since the local fans will be out numbered. They'll probably never have a winning season.

Posted by detroit1051

What did Harrah's do to get on the wrong side of "Eye on Vegas"? Uusually, Eye can't say anything bad about anyone.
"Rao�s In Decline
If you have walked around Caesars Palace lately you'll notice the signs placed around the property for morning coffee at Rao's. That seems great right? Well the sign goes on to read �No reservations. We promise.� This after recently closing the restaurant daily for lunch. Seems that the legendary New York Italian eatery is having a tough time of it here in Vegas. The days of not being able to get a table are over. The Caesars PR wizards have done their jobs again and destroyed another great American brand!"
http://www.thevegaseye.com/

Posted by mike_ch

If a local team comes, it comes. If it doesn't, it doesn't. "Locals avoid the Strip as much as possible." Well, some do, but I don't think I'd go that far. Casinos like Statosphere and even Wynn have had moderately successful locals program.

A local team either will or will not happen, likely will not. It doesn't cost much to make it suitable for league events, so they might as well be ready.

As a local who is pro-arena but anti-hometeam, I'd much rather this building than ol' Oscar drop something downtown and make the Spaghetti Bowl just that much more hell-like.

Posted by Mark D

I was watching some people on Nevada Week in Review on TV last night talking about this arena. I didn't fully realize this before, but they were saying that Harrah's is just donating the land (which they already own) and won't be paying for the construction and management of the building, all that will be paid by AEG. If that's the case, it's a no-brainer for Harrah's and won't add any more debt and will bring in lots of new business to their adjacent casinos. Smart move.

For the most part, stadium and arena owners make their money from the concessions, not the seat tickets. Simple math: Build the arena for $400MM with 20,000 seats. That equals $20,000 per seat. If the average event ticket price is $40 with half of that in profit, that would require 1,000 events to break even. But if the average profit from concessions is another $20 then the breakeven is 500 events which is doable over a three year time horizon. If the arena costs less or event profits higher then payback is even sooner. And I am not even factoring in the significant profit margins from luxury suites/boxes, etc.