Sunday, October 05, 2003
Copyright © Las Vegas Review-Journal

INFRASTRUCTURE: Moneyrail

Strip casinos train sights on profits as elevated shuttle promises more tourist mobility

The monorail leaves the station at the Sahara on a test run. MRC Group Research Institute Chief Executive Officer Jim Medick said the freedom the train will give tourists will enhance their experience and lead them to make more repeat visits to Las Vegas. Photo by John Gurzinski. Click image for enlargement. Graphic by Mike Johnson. The monorail travels toward the station at the Las Vegas Convention Center. Boyd Gaming Corp. Chairman Bill Boyd said visitors will move around more efficiently with the monorail. Photo by John Gurzinski.

The Las Vegas monorail is likely to have a watershed effect on Strip development, helping to shape the gaming industry as did the McCarran International Airport or the Las Vegas Convention Centers.

Bill Boyd, chairman of Boyd Gaming Corp., whose company ultimately will host one station downtown and another on the Strip, says the monorail will prove critical in changing the attitude of visitors coming to Las Vegas.

"In the old days, visitors played where they stayed, " he said. "The monorail is going to immeasurably increase their range of choices in limited amounts of time."

Visitors will move around more efficiently and that will affect the location decisions companies make about new developments designed to capture their attention, he said.

Skeptics, however, say it'll do no more than move a lot of people and relieve otherwise stifling congestion.

Developer Steve Wynn, whose under-construction hotel-casino is at the Strip and Spring Mountain Road, said the monorail will cut congestion and ease movement up and down the Strip, but it will not change Las Vegas' development dynamics.

"It won't change anything. It'll help solve a problem," he said. "All the people who go to the (Las Vegas) Convention Center (and the Sands Expo and Convention Center) go at the same time. There's a tremendous crush to get from rooms over to where business is conducted and, when the convention is over, it's even worse.

"The monorail was conceived by hotels on the east side of the Strip to solve a terrible transportation problem. It's exactly the right idea," Wynn said.

In the long run, transportation systems tend to guide development, said Keith Schwer, director of the University of Nevada, Las Vegas' Center for Business and Economic Research.

"To understand the impact, just look at where the railroads went in the U.S.," Schwer said. "They made a lot of places (by making it convenient to move around the West). One of those places originally was Las Vegas. There wasn't a Las Vegas without the railroad."

Gaming insiders said there will be similar effects from the monorail, with development huddling around station stops over time.

Boyd Gaming President Don Snyder said there is a specific advantage for resort properties that are on the monorail routes and those that will host stations.

Certain areas such as downtown Las Vegas, where a monorail station is planned, will benefit more than others. Boyd operates three properties downtown, including Main Street Station.

Snyder said Boyd Gaming has deferred decisions about the use of its land downtown near Main Street Station, waiting for the monorail to be built, because of the effect the monorail is likely to have.

He also said decisions about the redevelopment of the Stardust on the Strip where an east-west monorail corridor will be built have been deferred until the monorail is closer to completion.

"When we develop the 60 acres at the Stardust, the factors that will drive it will be the success of Wynn Las Vegas and the success of Fashion Show mall," Snyder said.

The monorail's development, however, will guide the timing of the development, he said.

"The development of the monorail is a big deal, especially with convention business. Larger conventions and multiple conventions translate into difficulties getting about," Snyder said. "It's very important for that (business) and for nonconvention business (that Las Vegas is known) for being easy to get around. Mainly, it's a key part of developing out tourist infrastructure."

Park Place Entertainment Corp. Senior Vice President Tony Santo said the monorail will make getting to and from particular casinos easier, but it also will give visitors more time to spend at entertainment venues and casinos.

MRC Group Research Institute Chief Executive Officer Jim Medick said the monorail will not lead visitors to stop at more casinos than the main ones they typically now visit, such as the MGM Grand, Mandalay Bay and The Venetian.

However, the freedom it will give them to move about will enhance their visitor experience and lead them to make more repeat visits to Las Vegas.

Still, it will boost individual properties by increasing their foot traffic.

"That's what we're all trying to do these days," said Santo of Park Place, which will host stations at Bally's and Paris Las Vegas, the Flamingo and the Las Vegas Convention Center.

"For Park Place, we're looking at ways to increase traffic to our properties. We think the Four Corners of Flamingo and the Strip are the bull's-eye of Las Vegas and we think it'll add visitors at Bally's, the Flamingo and Paris (Las Vegas)," Santo said.

Santo and Snyder said proximity and other transportation devices, such as the pedestrian bridges across the Strip, will boost properties such as the Caesars Palace, owned by Park Place, and the Bellagio, owned by MGM Mirage.

Alan Feldman, spokesman for MGM Mirage, said his company expects individual resorts will stand to benefit.

"Where our properties excel, where they clearly have marketing strength is in restaurants, shows and retail. These are areas (where) we'll see immediate pickup," he said.

"(Overall, however) anytime we grow options that will enhance their experience in Las Vegas and add a new dimension of fun or convenience, that's to everyone's benefit," Feldman said.

The monorail project as now conceived will be developed in four phases, Snyder said.

The $650 million first phase of the monorail project that runs between the MGM Grand and Sahara Avenue will open in late January.

The Regional Transportation Commission plans to lure riders to the system with a second phase running to Fremont Street.

The commission in April received the federal government's approval to begin final design and engineering work on its downtown monorail extension.

At Park Place, Santo said the extension to downtown is particularly important because it will create a better resort experience.

"That's what we are. We've evolved into a first-class resort town and this helps the entire city as it continues to evolves," he said.

The monorail project's second phase would cost about $450 million and be financed with federal money, low-interest loans and bonds.

The publicly financed downtown extension is expected to be completed by 2007.

Two added phases are in the conceptual and design stages, Snyder said.

The third stage will include an east-west route from the Riviera to Industrial Road and an airport connection, and the fourth stage will run up and down the east side of Interstate 15, serving the hotel-casinos on the Strip's west side, he said.

Las Vegas professor and casino industry expert Bill Thompson said: "(The) freeway originally defined the Strip. (The monorail) will keep people on the Strip. It'll reinforce the development that is in place, with some exceptions like giving downtown a big boost."