Station Casinos to Develop North Las Vegas Hotel-Casino - Monday 6th of February 2006

Station Casinos announced Tuesday that the company had been chosen to develop a gaming complex on 40 acres in Aliante, a master-planned community in North Las Vegas.

The project, dubbed Aliante Station is expected to break ground next year and finish construction in 2008.

Station Casinos told gaming analysts the project will initially cost between $400 million and $450 million and have a 200-room hotel and a casino with approximately 2,000 slot machines.

Other amenities are expected to be added and the project could expand.

The land, within the 1,905-acre Aliante development, is owned by the Greenspun Corp., which will be an equal partner in the venture with Station Casinos.

In an arrangement similar tho the one the two companies have with the Green Valley Ranch Resort, Station Casinos will manage the property for a fee that includes 2 percent of the property's revenue and 5 percent of its operating cash flow.

American Nevada Co., Greenspun's real estate development arm, will contribute the site. Station Casinos and Greenspun will jointly finance the casino.

The Greenspun Corp. owns the Las Vegas Sun.

With the nearly $1 billion Red Rock Resort in Summerlin expected to open next spring, the North Las Vegas project joins the list of potential casino developments around Las Vegas for Station Casinos, which announced Monday it had secured a new credit line.

The agreement will allow the company to borrow up to $2 billion, an increase of $1 billion from its previous credit line.

Station Casinos is planning to develop land on Durango Boulevard near Interstate 215 and also controls 54 acres near Tropicana Boulevard and Interstate 15. Station Casinos is also considering developing two casinos in Reno.

"We believe this is likely the first of several projects of similar size and scope, which we anticipate could Include Reno and Durango," Deutsche Bank gaming analyst Marc Falcone said. "We expect Station Casinos to provide a more detailed development outlook on the company's fourth-quarter earnings call (in January)."

Wall Street reacted positively to the news. Station Casinos shares rose $3.16 or 5.02 percent, Tuesday to close $66.15. More than 1.1 million shares were traded, double the average daily volume.

Aliante Station will be the first major hotel-casino in North Las Vegas' expanding northern section, The hotel-casino site is on the northeast corner of Interstate 215 and Aliante Parkway.

In a statement, Station Casinos, cited city of North Las Vegas projections that the city's population now about 180,000 will double every eight years with an average annual growth rate of 9.4 percent.

Goldman Sachs gaming analyst Steven Kent said the market, however, might take some time to develop.

"This project just adds to Station's unit expansion opportunities, which include existing property expansions and new casino development in Las Vegas, tribal gaming opportunities and future Reno casino development, which should help produce double-digit earnings growth over the next few years," Kent said in a note to investors.

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