Station Casinos have grand plans for Reno
It all started in 1976 when a bellhop-turned-dealer at the Tropicana had a dream to build a place where casino workers could go and unwind after their shifts.
So, with some partners, Frank Fertitta Jr. built a 500-square-foot slot casino and a snack bar.
That small snack-slot operation soon turned into Palace Station, and with the help of Fertittas sons, Frank Fertitta III and Lorenzo Fertitta, Palace Station mushroomed into Station Casinos. Its one of the largest and most successful gaming operations in Nevada, boasting
17 major properties in Southern Nevada and another one under construction.
Soon, the Station Casinos empire plans to arrive in Reno, though a date is not set.
One Station property is planned near the Atlantis Casino Resort Spa and the Reno-Sparks Convention Center. The other is set for an 88-acre site near Mount Rose Highway and The Summit mall.
In Southern Nevada, Fertitta and sons succeeded with a simple formula: appeal to locals with excellent food, gaming, entertainment and other amenities. Word of that quality quickly spread to the tourist market, thanks to an untold number of cabbies who tell Las Vegas tourists about the best places in town.
That word-of-mouth advertising helped capture the tourist market and gave the Fertittas the best of both worlds in the Nevada resort industry.
"Calling it rags to riches is not far off," said Bill Eadington,
director of Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. "If you look at the assets of Frank Fertitta Jr., he really didnt have much when he began. He found a very good formula and stated with Palace Station, and it took off from there."
Stations plans for Reno are grandiose by Washoe County standards.
The plan for the Station property near the Atlantis and the convention center involve an 8-acre site with up to
500 hotel rooms, multiple restaurants, a high-tech sports book, plus multiple restaurants and gaming offerings.
The one near Mount Rose Highway and the Summit mall will open with 300 hotel rooms with plans to expand to 600. It will offer 500,000 square feet of casino, restaurant and entertainment areas and will be next to a proposed 140,000 to 150,000 square-foot Bass Pro Shop Destination Store.
Some gaming experts said that nothing in the Reno market will compare, especially if Stations Reno properties are of the caliber of its Red Rock Casino Resort and Spa. It opened last year in ritzy West Las Vegas, far from the Strip.
Station executives say that the Reno properties would compare to Red Rock and their Green Valley Ranch Resort, another of their flagship properties.
"I actually stayed in Red Rock two weeks ago, and I was blown away," said Frank Fahrenkopf Jr., a Reno High School graduate and now the CEO of the American Gaming Association.
"To be fair, I have not gone and looked around (at all the current Reno properties), but if Stations properties are going to be the quality of Red Rock, to my knowledge, there is nothing (in Reno) that would compare," said Fahrenkopf, chairman of the Republican National Committee during the Reagan administration.
When are they coming?
The big question, however, is when Station will make its move into Reno.
That will be decided late next year, after Stations latest resort, Aliante Station in the Las Vegas area, is near completion, said Scott Nielson, executive vice president and chief development officer.
When the Aliante is near completion, Station executives will decide if they will build in Reno or expand in the Las Vegas area.
"What we have currently is a number of opportunities here in Southern Nevada, and we also have opportunities at two locations in Reno," Nielson said. "We are moving forward with planning on all of them. At some point, we are going to make a decision as to pulling the trigger on one of those. But we really havent determined that yet."
Nielson said that Station eventually will break ground in Reno. The company recently went private after being publicly traded on the New York Stock Exchange since 1993.
Station will indeed come to Reno because its major partner in its privatization -- Colony Capitol LLC, a private real estate investment firm -- is very bullish on the Reno market, Nielson said.
"Reno is one of the projects they (Colony Capitol) considered when they looked at us and said Yes, we want to be a partner," Nielson said. "Someday we will come to Reno. We have not given up on Reno. We continue to work on the properties."
Some gaming experts have used a cliche in describing the impact Station would have on Reno, saying that Station "will raise the bar" for the Reno-Sparks gaming community.
"In terms of raising the bar, what we are accustomed to doing is building high-quality
facilities," Nielson said. "What we will try to do is build a larger hotel room, with full amenities in terms of the latest electronics, Wi-Fi and that sort of thing.
"Then, we will bring in the latest and best in terms of signature chefs, entertainment and gaming," Nielson said.
Reno has not seen a new gaming property built from the ground up since the Silver Legacy opened downtown in 1995, Eadington said. Building a new property gives Station another trump card.
"They have a number of significant advantages," Eadington said. "One, they would be able to build a property from scratch, and nobody has been able to do that in Reno for quite some time. Most of the properties here are 20 or so years old.
"Also, Station is the dominant locals casino operator in Las Vegas," Eadington said.
"They know the locals market, and they know Nevada. That will be a real significant advantage in Reno. The reality of the Reno market right now is that the locals market looks fairly attractive, and the tourist market looks fairly weak. So, they are going to play from their strength, which is the locals market. That will make them a threat of course, to all of the other casinos who cater to that," he said.
The lack of new properties makes Reno ripe for expansion, Nielson said.
"We looked at Reno and said, Youve got good demographics, good average household income, not an overwhelming number of slots machines per persons who live there and you also you also have not had any new product for awhile," Nielson said. "So, we believe that if we built the right product, we can attract a combination of both tourist and locals. So, we think we can do very well there."
Reno-area impact
The Station projects, because of their south Reno locations, appear to be major competition for two of Renos most successful casino resorts, the Atlantis and the Peppermill Hotel Casino.
Those resorts already have stepped up to the challenge.
The Peppermill in nearing completion of its $400 million upgrade, which includes the much-anticipated Tuscany Tower.
The Atlantis is investing $50 million in an expansion that will include renovation of rooms, new restaurants and a larger casino area. Not included in the $50 million are construction costs on a new skywalk that will connect the Atlantis to the Reno-Sparks Convention
Center.
Station will be welcomed to south Reno if it makes a major investment of about $750,000, Atlantis CEO John Farahi said in August.
"Today, most of the gaming revenue is being generated in downtown Reno," Farahi said. "But if Station builds down here, too, this area would become the focal point of Northern Nevada and would create a critical mass that would then be the center of entertainment activity."
A Station-Atlantis-Peppermill team could boost Renos convention business, Nielson said.
"We would see the 8-acre property working very well with adding additional rooms around the convention center and bringing in more of a critical mass of new hotel rooms in that area," Nielson said.
One drawback in welcoming Station is that Station currently has a managing contract with Renos California tribal gaming rival, Thunder Valley in Lincoln, Calif., near Sacramento.
Nielson and Eadington downplay any possible friction.
"The way I think they look at it, and the way we look at it is once that Indian tribe was federally recognized to have land and trust, they had the right to have a casino," Nielson said. "So, somebody was going to build and operate that casino, and it happened to be us.
"And that is good for our company, but it is also good for Nevada because we earn management fees for that, and we can bring that money back to Nevada and reinvest it here," Nielson said.
"We operate that, that is true. But if we come to Reno and bring something exciting and make a big investment, I think it will give more people more reason to come to Reno. And the other casino operators, at least the ones that we have talked to, see it in the same way," he said.
Eadington called Stations involvement at Thunder Valley "irrelevant" because Stations management contract with Thunder Valley expires in less than three years. So by the time Station is doing business in Reno, it will no longer being doing business with Thunder Valley, Eadington said.
2007-12-21
