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November 02, 2005

Strip is stretching southward

By Liz Benston <benston@lasvegassun.com>
Las Vegas Sun

First there was Sam's Town, Station Casinos and Coast Casinos.

Three years from now, local gamblers will get to know another entrant in the lucrative neighborhood casino market. Olympia Gaming plans to open at least three and possibly more casinos in the Las Vegas Valley.

Olympia, founded by Arizona real estate developer Garry Goett, owns more than 400 acres, some on Las Vegas Boulevard South, that is zoned for casinos. On the Strip, 400 acres could accommodate more than a dozen casinos.

The several-mile stretch of Las Vegas Boulevard from Mandalay Bay to St. Rose Parkway still is largely vacant or underdeveloped in spite of a growing number of high-rise condos and timeshares under construction nearby.

Goett bought the land from the federal government as part of a controversial land swap. He has owned the land for more than 10 years, waiting for Las Vegas development to move south.

In the meantime, Goett built Southern Highlands, an upscale, 2,750-acre master-planned community near St. Rose Parkway and Interstate 15. Approved for 10,400 homes, Southern Highlands has about 7,000 homes.

Thousands of condo and time-share units are sprouting up along Las Vegas Boulevard South, as are hundreds of homes and apartments west of the boulevard.

For Goett, what was once sprawling desert is now a viable commercial center that has become a gateway to Las Vegas -- a first stop for visitors driving into town.

Last month Goett revealed details of his first project, the $750 million Southern Highlands resort. It will be built on nearly 100 acres at the southeast corner of St. Rose Parkway and Las Vegas Boulevard South and will be part of a mixed-use development with retail and office space. The first phase is expected to open by summer 2008.

Goett's Olympia Group, which will operate the casinos and commercial developments through separate affiliates, also owns 250 acres between Starr and Cactus avenues, about three miles north of St. Rose Parkway. The site is between Las Vegas Boulevard South and I-15.

Goett envisions building at least one casino at the southwest corner of Cactus Avenue and Las Vegas Boulevard South. Construction could start by 2010, and it would also be another mixed-use commercial center. Also under consideration is a second casino that could be built close to Starr Avenue and the boulevard, although no timetable has yet been set.

The timing of both the Southern Highlands resort and the Cactus Avenue project depend on freeway interchanges that are expected to open on I-15, feeding traffic to those respective intersections.

The Nevada Transportation Department is expected to open an interchange at Cactus Avenue by 2010.

A fourth casino site, 60 acres west of I-15 at the southern end of Southern Highlands and part of the master plan for that community, also doesn't yet have a timetable.

"I don't think he's in any big hurry" to develop the casino parcels, said Carlton Geer, director of real estate broker CB Richard Ellis' Global Gaming Group in Las Vegas. "With at least one, two and possibly more casinos opening north of him in the next few years, he's in a good position to wait it out."

Station Casinos owns 55 acres north of Cactus Avenue and south of Silverado Ranch Boulevard. That land, also bordered by Las Vegas Boulevard South to the east and I-15 to the west, is destined to become a casino resort someday.

Station Casinos hasn't revealed any plans to develop the land.

Farther north, at I-15 and Blue Diamond Road, the Silverton is embarking on a major expansion that will include a second casino, a retail and entertainment center and time-share units.

While Goett waits, casino companies and other developers have been beating a path to his door. Some companies want to discuss buying land or a joint venture. Others want to manage the casinos that he hopes to build.

At least for now, Goett says he's not interested.

"There's hardly a parcel we don't have that people wouldn't like to buy," said Goett, who declined to name the potential investors.

Goett isn't entertaining offers to sell any land or enter into any joint ventures. But that doesn't mean he will entirely rule out any offers that come along in the next few years.

The future of the 250-acre site, because of its size and location, is especially uncertain. Rising land prices might make future offers to buy a portion of it more attractive, according to Olympia Gaming Chief Marketing Officer DC Graham. The potential to develop future casinos will be more certain once surrounding projects take shape, Graham said.

"We're not going to have results (from the Southern Highlands resort) until 2009, so it's going to be hard to make a decision today, that not being known," he said.

Olympia Gaming already manages the Casino Fandango in Carson City, which opened in 2003. Goett owns the casino with former MGM Grand executive Larry Woolf and Reno architect Peter Wilday.

Joining Goett and Graham in the development of the Southern Highlands resort are Chief Financial Officer Kirk Saylor, former CFO for Jack Binion's Horseshoe Gaming Holding Corp.; Chief Operating Officer Sean Sullivan; and Patrick Done, president of Olympia Group's retail division.

Geer said Goett, who has assembled an experienced team, has the potential to develop a chain of locals casinos to rival Station or Coast. The 250-acre site may be the largest continuous acreage under a single owner on Las Vegas Boulevard South, he said.

Building a major casino resort several miles from the Strip's core is a gamble. The Southern Highlands resort will cost upward of $2 billion once future phases are built and will also depend heavily on drive-by traffic as well as local customers.

But Goett says he's not daunted.

His Southern Highlands golf course, rated as one of the country's best, isn't patterned after any particular course but instead is an amalgam of "the very best golf courses in the country," he said.

Similarly, Goett has scouted casinos nationwide, from major resorts to regional properties. He has also conducted focus groups on what locals want in a casino and what locals casinos don't yet have.

"We've got good ideas from leading gaming people," Goett said. "It will have our own stamp," he said of the Southern Highlands resort.

Station and Coast are "two wonderful companies," he said. "They both do a really good job. But I think we can do a really good job, too."

Liz Benston can be reached at 259-4077 or benston@lasvegassun.com.

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