Tuesday, December 17, 2002
Copyright © Las Vegas Review-Journal

Pieces fall into place for Le Reve, Macau

Wynn shifts focus to building top staff

Plans are almost finalized for his casino resort in Macau and construction is under way at his $2 billion Le Reve, and Steve Wynn no longer has to worry about lining up financing for Wynn Resorts.

Life is good but busy, Wynn said Monday.

"I'm going to interview 100,000 people for 8,000 jobs (at Le Reve) plus another 2,400 in Macau," Wynn said. "We spent more than two years on design and budget and almost half a year on financing. But the real issue is the staff, just as it was at Mirage (Resorts, Wynn's former company, acquired by MGM Grand in May 2000 and now part of MGM Mirage).

Wynn Resorts already employs about 250 workers, but that number will dramatically increase over the next few months.

"We're going to be in overdrive," he said, noting that he's hired former Mirage Resorts human resources honcho Arte Nathan to staff Le Reve.

"Arte opened all of the hotels with Bobby (Baldwin, now Mirage Resorts CEO) and he knows how to do it," Wynn said. "A lot of the people will come from my prior company. (MGM Mirage owner) Kirk (Kerkorian) and I have an understanding (that Wynn will hire a number of his former workers)."

Expect a number of high-profile hirings over the next few months, he added.

Wynn said Le Reve construction is still on pace for a spring 2005 opening, both for Le Reve and its golf course.

Construction's already started on the garage and the 47-story hotel tower. About 25 percent of the tower's pilings are in, with the remainder on schedule to be finished by the end of the year.

"You'll start to see the high rise going up next month," he said. "That's when it'll really be noticeable, and pretty soon we'll be adding about one floor a week."

Golf course construction is moving at a more measured pace, since Wynn said it doesn't make sense to open the links before the hotel opens.

Construction workers have moved all of the big trees on the old golf course to a temporary nursery on the north side of the Desert Inn property to allow earthmoving equipment easy access to build the new layout, which will introduce lush landscaping and dramatic elevation changes.

Wynn explained why various news outlets have reported different prices for Le Reve. Wynn Resorts insiders and financiers have said the price for the megaresort was about $1.85 billion, but the company's Securities and Exchange Commission filing listed a $2.4 billion cost.

Those numbers compare with Bellagio's $1.6 billion price, making Le Reve the most expensive hotel-casino project ever.

Wynn said the $2.4 billion number includes substantial appreciation for the Desert Inn site he bought 2 1/2 years ago, including parcels dedicated for a separate hotel and the golf course.

The $2.4 billion price also included some funds for Macau development and corporate expenses.

"That's why I use the $2 billion number," Wynn said. "I tend to think of the golf club and the new hotel site as separate from Le Reve," he said.

Raising the money Wynn needed to get Le Reve construction under way was a major challenge, he admitted. His bankers had to lower the target price for the Wynn Resorts initial public offering three times before it opened at $13 on Oct. 25.

Wynn Resorts shares closed Monday at $13.68 in trading on the Nasdaq market, up 8 cents.

"It took two years and three months to design and budget Le Reve," Wynn said. "It was a joy, working five to six days a week, such fun that it seemed like three months."

Lining up financing, including a multiweek, coast to coast road show to pitch institutional investors, was less pleasurable.

"It took four to five months to finance, but it seemed like three years," he said. "But this was a deal that I had to get done. I had no choice whatsoever. It was a matter of honor. So many people put their trust in me, left good positions. That was the worst part, knowing that the deal was so important to so many."

Wynn's board of directors met in Las Vegas last week, he said, hearing from corporate compliance experts about tough new federal governance rules.

Wynn's top executives are meeting this week with the prospective builders and architects of his planned Macau casino resort.

Wynn plans to finalize the Macau project's budget by the end of January, finalize financing by February and begin construction in March or April. The property's casino would open in April or May of 2004, one year before Le Reve.

Wynn said the timetable is realistic.