Boyd buys land under Barbary Coast - Monday 12th of September 2005
Moving to consolidate its control of one of the smallest but most valuable parcels of land on the Strip, Boyd Gaming Corp. on Monday bought the land under the Barbary Coast for $15.7 million.
With the 1.8-acre acquisition, Boyd Gaming now owns 4.3 acres on the northeast corner of the Las Vegas Boulevard and Flamingo Road, commonly referred to as the Four Corners area of the Strip.
Advertisement
Boyd Gaming Corp. Chairman Bill Boyd said the company has no specific plans for redeveloping the site but will be in a position to evaluate possibilities.
Boyd Gaming paid Enpey Enterprises, a family interest that owned a motel on the site before the Barbary Coast was built, about $8 million an acre for the parcel, which industry experts called an incredible bargain for Boyd Gaming.
By comparison, Harrahs Entertainment is paying $20 million an acre for the Imperial Palace and the land on which it sits.
Boyd Gaming acquired the Barbary Coast and the back half of the parcel under the parking structure in July 2004 as part of its $1.3 billion buyout of Coast Casinos, which has made it the third-largest gaming company in the world.
The deal gives Boyd Gaming more flexibility to redevelop or sell the site on its own terms with fewer legal complications, said Brian Gordon, a principal in Applied Analysis, a Las Vegas-based financial consulting company.
Deutsche Bank analyst Andrew Zarnett said the company will first have to decide how it will redevelop its Stardust site, valued at up to $1.3 billion, farther north on the Strip and decide what kind of a niche product would make the most sense on the Barbary Coast site.
"At this point, they are in a position to develop a niche product that would maximize the tremendous value from the traffic flows through the intersection," he said. "Boyd is one of the largest gaming companies in the world, and with its success with The Borgata (in Atlantic City), it has the proven capability to do things with markets which people did not think could be done."
University of Nevada, Las Vegas history professor Hal Rothman said the transaction is reminiscent of local developer Steve Wynns deal years ago to flip a small parcel of land in front of Caesars Palace into a $700,000-plus profit he used to buy a 5 percent stake in the Golden Nugget.
"But in this case, with the way the city is going vertical, there are a lot of high-rise development options Boyd could decide to pursue," he said. "What they are going to have to do is think in terms of developing up rather than out. The land is worth an incredible amount per square foot, and they are going to want to maximize the value they get for their shareholders.
"Its another sign Boyd Gaming is stepping up because its one of the big boys on the Strip now. They likely are going to use the land and their resources toward building a Strip-centric company along the lines of MGM (Mirage), rather than remaining just a locals player on their old Sams Town model."
Zarnett said if instead of redeveloping the site, Boyd wants to realize value by selling the property, the acquisition gives it a bigger piece of land to sell to Harrahs Entertainment or a third party that is shopping for a prime Strip location.
The surrounding properties, the Flamingo, Batistas Hole in the Wall and Bourbon Street, are all owned by Harrahs Entertainment, which has announced it is considering redeveloping the area.
Industry experts have speculated since Harrahs acquired the Flamingo as part of its $9.4 million merger with Caesars Entertainment that it was interested in buying Boyds holdings at the Four Corners.
Harrahs spokesman David Strow said he could not comment on his companys possible interest in a further acquisition because it is focusing all its efforts on relief for Gulf Coast workers following Hurricane Katrina.
However, Boyd Gaming spokesman Rob Stillwell said his company has had no discussions with Harrahs involving the possible sale of the Barbary Coast.
"There was always a desire by Caesars (Entertainment) to expand its holdings, but there havent been any discussions since the merger," he said.
Other news from around the same time
Threat to casino town - Monday 12th of September 2005
The authority to issue border passes has been transferred from the Aranyaprathet district officer to....
Bio on Stuey Ungar reveals that poker champ didnt play all his cards right - Monday 12th of September 2005
Poker has so permeated the national consciousness in recent years - with games on TV, bestselling bo....
PartyGamings problems leave red faces in the City - Monday 12th of September 2005
INVESTORS cannot say they were not warned. PartyGaming shares looked overvalued when they were float....
The Perils of Casinos That Float - Monday 12th of September 2005
Bernie Burkholder, dressed in scuffed tennis shoes, shorts and a dirty shirt, could have been any ot....
Gaming leaders mull Miss. moves - Monday 12th of September 2005
In another sign of the gaming industrys anxiety about its future in the hurricane-ravaged Gulf Coast....
Gambling den owner arrested, 70 machines seized - Monday 12th of September 2005
Confirming public suspicions that gambling dens are still thriving in the capital, city police arres....
A gambler was caught with 360 suspected counterfeit RM1 coins as he walked into a casino in Genting Highlands on Monday. - Monday 12th of September 2005
Tabcorp announced it will launch a self-exclusion service on Monday that allows gambling addicts to ....
Two men with fake RM1 coins held - Monday 12th of September 2005
A gambler was caught with 360 suspected counterfeit RM1 coins as he walked into a casino in Genting ....
Floating casinos bulldoze history - Monday 12th of September 2005
The giant floating casinos of Biloxi were known to gamblers from Louisiana to Alabama as "The Boats,....
PartyGaming Loses Third Of Its Value On Warning - Monday 12th of September 2005
PartyGaming, the controversial poker web site operator that earns most of its revenue where its serv....
