The recent story of the Riviera on the Strip could be told like this: often a bridesmaid, not yet the bride.
Last year, Riviera Holdings Corp. contacted 35 potential bidders during the height of the Strip land-buying frenzy -- remember the New Frontier's sale for $34 million an acre? -- to solicit offers for the company. But no sales agreement was reached.
Instead of sitting around waiting for a sale, the Riviera's management has continually reinvested in the property, long the center of sale rumors, to keep pace with the market.
"Our job is to manage the property and get the best return we can for our stockholders," said Bob Vannucci, property president since October 2000. "We've probably had, over the years, 30 people come in and want to buy this property. But for one reason or another, it never happens."
The 61-year-old Vannucci said there were offers to buy the property when he arrived 15 years ago as marketing director.
Instead, nearly $250 million during Vannucci's time has been spent on capital improvements such as room renovations, casino makeovers, fire-safety system improvements and technology upgrades.
A new $11 million sports book opened in February and $17 million is being spent on room renovations and other improvements this year alone.
Construction abounds around the 26-acre site: the $2.1 billion Encore is scheduled to open in December to the south; the $2.9 billion Fontainebleau is expected to open next year to the north; but the $4.8 billion Echelon across the street was delayed for at least several months on Friday.
Vannucci said the money spent upgrading the property the past couple of years is "repositioning our property for what we think is coming. We're building a very upscale room product that will compete readily with any property in the city."
A remodeling of the 979-room Monaco Tower is scheduled to be completed Oct. 15, said Chip Franzoi, Riviera's vice president of construction and general contractor at the property for 20 years.
Upgrades ranging from $2,500 to $14,000 per room include amenities such as flat-screen televisions, iPod docks and Wi-Fi.
The hotel elevators and corridors are also being redone, with work scheduled to finish in 2009.
"You can either adopt a philosophy that we're going to wait to be torn down, or you can do something. We have a responsibility to our stockholders. We're going to do everything we can to make this property as competitive as possible," Vannucci said.
The company's stock price has recently taken a hit similar to those of other gaming companies.
Riviera Holdings shares closed Friday at $8.60, down 23 cents, or 2.6 percent, on the American Stock Exchange.
The stock hit an all-time high of $39.12 on June 20, 2007, fueled by buyout rumors and speculation on the value of the Riviera's 26-acre site.
William Westerman, the 77-year-old chairman and chief executive officer, said in May that the company's stock price last year served as a substitute for Las Vegas real estate market speculation.
However, the possibility of a developer swooping in and buying the company on the cheap while the markets are down is unlikely.
Large percentages of the company's stock are controlled by institutional investors who have either shown interest in buying the company themselves or in a willingness to wait out Wall Street fluctuations and block offers deemed too low.
John Knott, executive vice president of the Global Gaming Group for CB Richard Ellis, said a developer could buy the company and hold the 26 acres under the Riviera for future development while continuing to gather revenue from the property.
"The difference is, you have an operating asset that somebody could acquire and change the performance of the existing operations," Knott said. "The sale of the Riviera is not just tied to its real estate value. It's tied to the opportunity that someone would see with respect to the properties."
Although the Riviera accounted for 75 percent of the company's revenue last year, the gaming company also owns a casino in the growing Colorado market, which also holds value for a buyer.
And last year was the best year in the property's history, generating $151.5 million in revenues, with a property cash flow of $30.2 million.
Overall, company revenues reached $205.5 million, a 2.3 percent increase from 2006.
Vannucci said the Riviera's typical customer is from the Southwest and Midwest, age 45 to 65, and making at least $50,000 per year.
The property, which opened in 1955, still has cachet for locals and tourists.
North Las Vegas resident Paula Gibson brings visiting family and friends to the Riviera so they can get a feel of old-time Vegas. There are not many casinos where the likes of Frank Sinatra played the main room.
The Sands, Stardust, Dunes all were torn down and replaced by multibillion-dollar developments.
"The Old Vegas is not as grand," Gibson said. "But these new properties are kind of intimidating. You don't get a lot of play (at the slot machines at new properties) because they have to pay for these new buildings."
Gibson, who was playing video poker across from her mother, said there is an atmosphere at the Riviera that the new larger, more expensive properties can't replicate.
The property also shifted toward the convention business in 2000. Last year, conventions accounted for 34 percent of the Riviera's occupancy and 41 percent of its revenue.
The property, which has 160,000 square feet of convention space, hosted 322 conventions in 2007, up from 290 the previous year.
Vannucci said he feels comfortable using 1,200 of the hotel's 2,075 rooms for conventions.
"If you build a business value with your property along with the real estate value with your property, it's a lot more attractive to any prospective buyer who wants to come in," Vannucci said.
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3893.