A decade ago, Boyd Gaming Corp. executives put aside plans to redevelop the company's Strip land holdings in favor of moving forward on an opportunity to build a hotel-casino in Atlantic City.
On Tuesday, the Strip became the company's foremost priority.
Boyd Gaming unveiled details and renderings for the $4.8 billion Echelon, which will have five hotels surrounding a multiuse resort destination on 87 acres, much of which once housed the now-imploded Stardust.
Instead of a formal "shovels-into-a-pile-of-dirt" ground-breaking, Boyd executives kept several hundred guests out of the 100-degree temperatures and inside an air-conditioned tent on the Echelon site. Construction officials, with Boyd Gaming leaders and representatives of the company's joint venture partners watching, shattered a sheet of black glass that hid a 1,000-pound Echelon cornerstone.
It is expected to take about three years to build Echelon, with an opening planned in 2010.
Boyd Gaming Chairman Bill Boyd said he's glad the company waited on Echelon.
"It was impossible to do both projects at the same time, so we chose to move forward in Atlantic City," Boyd said. "We made the right decision."
Boyd Gaming opened the Borgata in 2003, and it has become Atlantic City's swankiest upscale resort. The project also answered Wall Street's questions of whether Boyd Gaming could build a multibillion dollar hotel-casino.
"We have as much experience as anybody in the market today in developing and building hotels," Boyd Gaming President Keith Smith said. "I think we've answered our critics."
The Las Vegas landscape 10 years ago was much different than today's building culture. Boyd now believes that if the company had moved forward on the Stardust site back then, the project would have been on a much smaller scale.
"The time that we took allowed for our company to build a much greater foundation," Boyd said. "We can see there is a demand for this type of project now and we believe the demand will be there when we're ready to open.
Boyd initially announced Echelon 18 months ago. During the time, joint venture partners were added and site, originally 63 acres, expanded by 24 acres through a land swap with Harrah's Entertainment. About 22 acres of the Echelon site will be saved for future development.
Meanwhile, the costs of project also grew by almost $1 billion.
Echelon's five hotels will all have separate entrances and lobbies. But the entire development, including the 140,000-square-foot casino, the meeting space and retail promenade, will be interconnected. A guest, conceivably, could walk the entire facility without ever venturing outside.
"The idea was to create different experiences and environments for the guest," said Echelon President and Chief Executive Officer Bob Boughner, who is overseeing the project. Boughner, a longtime Boyd Gaming executive, headed construction and development of Borgata before heading back to Las Vegas last year.
Boyd Gaming will operate two of the hotels on the Echelon site, the 2,300-room Hotel Echelon and the Suites at Echelon, which will be a 650 all-suite hotel.
New York-based Morgans Hotel Group is placing two of its brands at Echelon in a 50-50 joint venture with Boyd Gaming, the 860-room Mondrian and 550-room Delano. Morgans, which bought the Hard Rock for $770 million in February, will operate its two hotel brands and the restaurants associated with the hotels.
"We've been looking at this market for a long time and we probably should have been here sooner," Morgans Chief Investment Officer Marc Gordon said. "Our customers have been coming here and staying at other hotels. Soon, they will be able to stay at one of our hotels and we'll connect into the other amenities offered by Echelon. Our guests will be able to get the benefits of all that."
Hong Kong-based Shangri-La, which has built hotels through Asia and the Middle East, recently entered the North American market with properties in New York, Chicago, Miami and Vancouver, British Columbia. The 353 rooms planned for Echelon will be the company's largest single property, but small by Las Vegas standards.
Giovanni Angelini, the CEO of Shangri-La, said the company's loyal Asian customers will follow the hotel company to Las Vegas, especially for Echelon's casino, the retail aspect, and the city's vast offerings of championship golf courses.
"We believe that we will help grow the market and bring our good customers to Las Vegas," Angelini said.
AEG Live, which runs the Staples Center in Los Angeles, will operate Echelon's two entertainment venues, a 4,000-seat theater and 1,500-seat performing center. General Growth Properties, which already operates three Strip shopping centers, will manage the 300,000 square-foot Echelon retail promenade.
Smith said a concept during the development was to bring some first-time joint venture partners to Las Vegas.
"We wanted to bring experiences here that don't exist today," Smith said. "We think that was accomplished."
Boyd Gaming broke down the costs for Echelon as $3.3 billion for the two Boyd hotels, the Shangri-La, the convention space, casino and other related amenities. The two Morgans hotels will cost $950 million while the retail site with General Growth Properties has a $500 million budget.