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Cosmopolitan Vegas Takes Shape

April 12, 2010 By

News about the Cosmopolitan Vegas is starting to trickle out as its opening in December gets closer.

John Unwin is the CEO of Cosmopolitan of Las Vegas, and it seems that Deutsche Bank will remain the owner for the foreseeable future as it has not found any other buyers, or secured an operating agreement with any hoteliers. Whilst Unwin has experience as a Caesar’s Palace GM, one thing that will different this time around is that Cosmo is starting with no database of customers. This standing start may be partially offset by the fact the development is the only new Strip casino coming online in 2010, but excitement of the new wasn’t enough to make Planet Hollywood profitable so will it work here? Harrah’s acquired Planet Hollywood because of the value it can generate using its customer database – how long can the Cosmopolitan survive solo?

With its stunning terraced rooms overlooking the Bellagio fountains it is possible that the development will break the mold of multi-casino operator model. In addition to the views, another thing that makes these hotel rooms unique is the kitchenettes. They are more like condos than hotel rooms, as that is what they were originally built to be.

Cosmopolitan of Las Vegas is 8.7 acres of prime Strip property, and Unwin plans to hire 3,600 workers in 2010 to make it a success. The hotel may open with as few as 800 rooms initially, with these increasing as demand dictates (the development has 2,995 rooms in all).

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Boxer, Pilot, Mogul. The Kerkorian Story.

March 23, 2010 By

The founders of the Strip, Thomas Hull (opened El Rancho Vegas in April 1941) and R.E. Griffith (opened in October 1942), have long since been forgotten ,and remain in the shadows of flamboyant developer-showmen like Bugsy, Jay Sarno and Steve Wynn. Another major figure in the Strip’s modern transformation is Kirk Kerkorian, of MGM Kerkorian fame.

Kerkorian was an amateur boxer with a 29-4 record, before becoming a commercial pilot in 1941. After serving with Canada’s Royal Air Force during the war he went on to become a plane dealer, and eventually start his own airline. After selling Trans International Airlines for $104 million in 1968 he started investing in Vegas. Kerkorian had already invested in the Dunes by this time, and flipped 80 acres of land to Sarno’s Caesar’s Palace, but as his airline cash came in he wanted to place some bigger bets on Vegas.

In 1967 Kerkorian bought 82 acres on Paradise Road, and the Flamingo. By 1969 he had built and opened The International, a 30-storey hotel with 1,500 rooms and a 30,000 square feet casino. Maintaining his trading track record Kerkorian sold both The International and the Flamingo to Hilton Hotels a year later. The International set the standard for the mega-resorts to come, both in terms of scale and layout.

Next came the MGM Grand in 1973, which Kerkorian built in 1973 right next to the Flamingo. It was instantly the most stylish of the Strip hotels. Hardly surprising given the $104 million that was invested in this 2,100 room spectacle. Unfortunately the MGM Kerkorian hotel was engulfed in flames in 1980, killing 87 people. Although the hotel was rebuilt eight months later, Kerkorian’s plans for further expansion were on hold. The next phase of the Strip’s development belonged to Steve Wynn.

Further reading:

Read about Las Vegas Strip Condos.

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The Start of the Strip

March 19, 2010 By

The Strip started out life as Route 91, thus the name of some of its first nightclubs: 91 Club. Back in the 1940s 91 Club struggled to compete with Downtown, and folks weren’t attracted to spending their leisure time on what was considered the Los Angeles Highway. Things changed with the opening of El Rancho Vegas in April 1941. This casino hotel, developed by Thomas Hull, had retail, restaurants, shows, horse riding, a pool, and 63 rooms. It was the beginning of the Strip as we know it. The path to mega-resorts offering rooms, restaurants, entertainment, sports and even Las Vegas Strip Condos was in motion.

Following in Hull’s footsteps was developer R.E. Griffith who bought up 175 acres on the highway and built the Last Frontier. Opening in October 1942 this was Vegas’s first themed casino and its tribute to the wild west proved popular. The Carrillo Bar was named after the Cisco Kid’s sidekick, and there were stuffed animals throughout the casino.

Next came the casino that people mistakenly think was the start of the Strip. Billy Wilkerson, founder of the Hollywood Reporter, bought 33 acres south of the Last Frontier in 1945 and started construction of the Flamingo in April of the same year. Wilkerson had Gus Greenbaum and Moe Sedway as operating partners despite their links to organized crime, but the biggest problem was that he was a degenerate gambler. He gambled on the development itself when he started it without sufficient funds to complete it, and he also lots thousands of dollars of his own money as he played the tables during the construction period. The project ran out of money, and crime boss Meyer Lansky came in with $1m to invest.

Soon after Lansky’s cash injection one of his representatives, Benjamin Siegel, came to oversee the investment. Bugsy Siegel first split the project with Wilkerson, and then moved on to take the whole thing over. But Bugsy was no developer, and cost overruns and changes led to a delayed opening in December 1946. It opened without the rooms being complete and thus the casino could not generate the funds to maintain operations: the Flamingo closed just one month after it had opened.

It was in March 1947 that the Flamingo reopened with 93 rooms available. It pretty quickly started to generate profits, but it seems that the mob had not forgotten the cost overruns: in June 1947 Bugsy was killed, and Gus Greenbaum and Moe Sedway stepped in to run operations.

In the story of Las Vegas it is easy to forget the credit due to the true pioneers: Thomas Hull and R.E. Griffith. In the story of the Flamingo it is easy to forget the importance of Billy Wilkerson’s initial vision, and the operational skills of Greenbaum and Sedway. For many people it will always be Bugsy who built the Strip.

The Flamingo opened up a new market to Las Vegas of more sophisticated customers than those that visited Downtown. Once the Flamingo’s success was proven the Strip underwent a period of rapid development in the 1950s. The western-themed Thunderbird opened in 1948, and the Palm Springs-inspired Desert Inn opened in 1950. With each new development the luxury was ratcheted up, and the Desert Inn provided the Strip’s first golf course. Next came the Sahara, followed by the Sands, the Royal Nevada, the Dunes and the Riviera. All of these hotels were complete by 1955 and the Strip had just witnessed the first of its building booms. But the growth spurt still had legs, and the Hacienda opened in 1956, the Tropicana in 1957, and the Stardust in 1958.  The Stardust was the first hotel to realize the potential of the mass market, and its 1,000 rooms were soon filled with average folks who enjoyed gambling.

It was in the 1960s that Jay Sarno came along with the concept of massive themed resorts. The creator of Caesar’s Palace and Circus Circus, Sarno was a visionary. When Caesar’s opened in 1966 it was an instant hit. Sarno doubled up and took his Caesar’s profits to build Circus Circus. It was not until Sarno sold Circus Circus to William Bennett and William Pennington in 1974 that it started performing well. The two Williams toned down the circus act, removed the admission fee and targeted the mass market. Despite the mixed results of his hotels Sarno and paved the way for future casino developers who had grand ideas for the Strip. The ideas would eventually extend outside of casinos to Las Vegas Strip Condos, but that development phase has had mixed results.

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