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Vegas Stripping L.A. of Its Luxury Luster

For boutiques, dining, stage shows and even palm trees, the desert city has become a rival.

November 24, 2005|Gina Piccalo | Times Staff Writer

Piero Selvaggio calls it his "Las Vegas experience." It was opening night at Valentino, the Venetian hotel version of his successful Santa Monica restaurant, when a high roller sent his butler to buy some wine to go with dinner. Twenty minutes later, Selvaggio had sold the man more than $4,000 worth of rare Burgundy and vintage Bordeaux.

"In less than half an hour," said Selvaggio, one of the Los Angeles area's leading restaurateurs, "I was able to see things I would never have imagined possible."

And that was just the beginning. Las Vegas' appetite for the luxe life has grown so ravenous in the last few years that it is stunning veterans of the hospitality industry -- and nibbling away at the good life all over the country, nowhere more than in Los Angeles.

Call it the Vegas Effect. The city's relentless demand for luxury has contributed to a rise in prices for Kobe beef and palm trees, wiped out exclusive wine stock, lured wealthy Asian tourists away from Rodeo Drive with more exclusive boutiques and kept touring Broadway shows such as "Avenue Q" and "Spamalot" out of Los Angeles.

It is siphoning top talent and thousands of workers from throughout Southern California. And everything -- from specialty produce from the Santa Monica Farmers Market to ordinary items such as toilet paper and lumber -- has to be imported from somewhere, usually Southern California.

"When you go to Las Vegas, you have a sense that spending -- it's almost easier, looser -- and you feel that it's part of the pleasure," Selvaggio said. "The opulence and the variety and quality at the high end in Las Vegas is much, much bigger than Los Angeles. Los Angeles cannot even vaguely compete with this."

Of course, Las Vegas has long been a city of superlatives. It has for years been the nation's fastest-growing city. It has the largest job growth rate: 7.4% in 2005 with more than 62,000 jobs created this year. More hotel rooms than any city in the world: 133,000. More conventions and trade shows than any in the United States. Fashion designers, restaurateurs, hoteliers, superstar chefs and Broadway producers all want a presence in Las Vegas, because as L.A. nightlife impresario Amanda Demme said, "If you're known in Vegas, you're known everywhere."

Lee Maen, a partner in Innovative Dining Group, which owns trendy restaurants in L.A. and Las Vegas including Boa and Sushi Roku, agreed: "As much as L.A. influences the Vegas market, the Vegas market influences other restaurants across the country."

Las Vegas' glittering shopping concourses now house so many exclusive boutiques that the L.A. luxury market looks almost second tier by comparison. When Oscar de la Renta looked west, he opened his third store in the world in Las Vegas, not L.A. The Manolo Blahnik and Dior Homme boutiques in Las Vegas are the second locations outside New York. Overall, Las Vegas experienced four times the retail and trade growth that L.A. did in the last year, according to Ross DeVol, director of regional economics at the Milken Institute in Santa Monica.

More wealthy visitors from Seoul, Hong Kong and Tokyo, who are so cherished by L.A.-area tourism officials, are skipping Rodeo Drive altogether. "Over the past two years, Asian visitations have grown more to Las Vegas than to Los Angeles," DeVol said. "These are high rollers, who stay multiple nights at high-end hotels."

"This would be a direct challenge to Beverly Hills and South Coast Plaza," said Jack Kyser, the Los Angeles County Economic Development Corp.'s senior vice president and chief economist. "And now there's direct airline service from Asia. The high-rolling Asian tourists might just choose to overfly L.A."

Los Angeles also lost out on at least two popular Broadway shows. This year, billionaire hotel mogul Steve Wynn is leading the city's efforts to bring first-run Broadway productions to Vegas permanently.

Thanks to his exorbitant offers -- $5 million for "Avenue Q" and $10 million for "Spamalot" -- the shows won't tour the region, blacking out theaters in the L.A. area. In addition to Cirque du Soleil's wild success in Las Vegas, "Mamma Mia!" and "We Will Rock You" have become Vegas hits.

"We're selling so many tickets to so many shows that there's room for a lot of diversity [in productions]," said Alan Feldman, MGM Mirage's senior vice president of public affairs. "That in turn has prompted some producers to look at their economic model and say, 'What happens if I don't tour?' "

Settling down in Las Vegas means getting the benefits of touring without the expense, Feldman said: a fresh audience that comes through every three days, no enormous expenses of a traveling cast or setting up and tearing down the sets, and being able to say to employees, "You can have a family. You can get a house, an animal, live your life."

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