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Old Vegas Gives Way Again

Stardust Casino Is to Be Replaced by a $4-Billion Complex

January 05, 2006|James F. Peltz | Times Staff Writer

Like the Dunes and Desert Inn before it, the venerable Stardust hotel-casino on the Las Vegas Strip is heading for the wrecking ball.

The Stardust's owner, Boyd Gaming Corp., said Wednesday that it planned to tear down the 1,500-room resort to make way for an upscale, $4-billion hotel-casino-shopping complex that would compete against the other mega-projects that have risen in a town where new and glitzy usually trumps historic preservation.

Called Echelon Place, the new resort would consist of four hotels with a combined 5,300 rooms, plus shops, restaurants and a convention center.

The Stardust would keep operating through this year. It would be demolished in early 2007 as construction begins on Echelon Place, which is scheduled to open in 2010.

"Las Vegas has experienced an upscaling" of its properties, "and we certainly intend to be a participant in that," Bob Boughner, a Boyd executive who would be Echelon's president, said in an interview.

With Echelon Place, Boyd hopes to become a more formidable rival to the two companies that dominate the Strip: MGM Mirage, which owns such properties as the MGM Grand, the Bellagio and the Mirage; and Harrah's Entertainment Inc., whose resorts include Paris Las Vegas and Caesars Palace.

Boyd, a once obscure hotel-casino operator that has grown steadily over the years, also faces competition from several giant projects that recently opened or are under development.

Steve Wynn's Wynn Las Vegas luxury mega-casino opened last year. MGM Mirage is planning a $5-billion complex called CityCenter that would include hotels, a casino, stores and condominiums.

Las Vegas Sands Corp., which owns the Venetian, is constructing a $1.6-billion complex called Palazzo that would have 3,025 rooms.

Las Vegas-based Boyd "is swinging for the fences on all aspects of the redevelopment plan and is ready to become one of the big boys on the Strip," analyst William Schmitt of CIBC World Markets said in a note to clients.

Boyd's proposed 63-acre project means the end for the Stardust, another of the famed hotel-casinos that were built after World War II and became the early backbone of Las Vegas.

The Stardust opened in 1958 on the northern section of the Strip, and was acquired by Boyd in 1985. For years it was home to singer Wayne Newton -- known as "Mr. Las Vegas" -- and it still features such entertainers as Don Rickles, the Temptations and Jackie Mason.

But the complex lacked many of the attractions, such as upscale shopping and dining, that tourists now seek when they arrive in Nevada. Recently, Boyd promoted the Stardust as the hotel of choice for those who enjoyed the classic, retro Las Vegas.

"This was inevitable," said Anthony Curtis, publisher of the Las Vegas Advisor, which chronicles the city and its gaming industry. "The old-style casinos, and the Stardust is one, just can't compete anymore.

"People come to Las Vegas with their heart set on seeing the latest and greatest and coolest and slickest," Curtis said. "And these old places don't qualify anymore."

Some analysts have voiced concern over whether too many new projects are being built in Las Vegas, threatening an oversupply of rooms. The city had a total of 131,503 rooms at the end of 2004, according to the Las Vegas Convention and Visitors Authority.

But Boughner discounted the concern, saying that Echelon Place and some other projects would be replacing many existing, aging rooms "with more relevant and compelling" accommodations rather than just adding rooms to Las Vegas' current capacity.

He also noted that Las Vegas' tourism business continued to grow, raising demand for rooms. A record 37.4 million people visited Las Vegas in 2004, and through the first 10 months of 2005, the number of visitors totaled 32.4 million, up 2.5% from the same period a year earlier, according to the city's convention group.

Under the Echelon Place proposal, Boyd would spend $2.9 billion to develop a wholly owned hotel-casino called the Echelon Resort. An additional $1.1 billion would be invested by Boyd and other joint-venture partners who would develop three more hotels and other projects on the property.

Boyd operates 19 gaming facilities in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana.

After the announcement, Boyd's stock closed at $46.09 a share, down $2.31, or 4.8%.

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