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Fallout after the fall: revisiting an implosion

Hindsight is 20-20, but Boyd Gaming Corp. executives don’t regret demolishing the Stardust to make way for the $4.8 billion Echelon.

The company will spend 2009 evaluating Echelon. Construction on the 5,000-room multiple hotel project halted Aug. 1 when the credit markets dried up. Boyd Gaming CEO Keith Smith said the scope could be reduced.

The Stardust closed Nov. 1, 2006, and was imploded March 13, 2007. At the time, not even Nostradamus, the author of prophecies, could have predicted the economic meltdown the gaming industry is experiencing. Echelon broke ground June 19, 2007, and financial pundits didn’t see what was coming.

By the time work on Echelon resumes, it will be more than three years since the final Stardust dice roll. Construction could add another 24 months before gamblers return.

So, would it have been better if the Stardust were still around to provide a steady, albeit small, revenue stream?

“We can’t look back and second-guess. You would never make a decision,” Smith said. “Turn back the clock 15 months. None of what we’re seeing today was happening.”

Smith said Stardust’s customers have moved to The Orleans. The company won’t admit it, but some Stardust regulars were probably lost to the neighboring Riviera, Circus Circus and Sahara.

“We have the benefit of time,” Smith said as Boyd executives ponder Echelon. “The company has a strong balance sheet and is geographically diverse.”

***

Normally, I’d leave the political predictions to my colleague Erin Neff. But gaming elections in five states Tuesday interest Las Vegas.

In Maryland, voters will approve 15,000 slot machines. Slot makers have ponied up millions to back the issue. A Washington Post poll showed 62 percent support.

Gaming expansion in Colorado and Missouri also should easily pass.

In Ohio, opposition from rival casino operators will sink Lakes Entertainment’s plans for a $600 million casino. Meanwhile, several polls show Olympia Group’s casino plan in Maine running in a statistical dead heat.

My prediction: Gaming wins three of the five votes.

***

Former gaming executives never fade away, they land in Southern California.

Arte Nathan, who spent two decades handling human resources for Steve Wynn, is on the board of San Diego-based Strategic Development Worldwide. Nathan joins ex-Bally’s Las Vegas President Darrell Luery, a company principal.

Former Caesars Palace exec Phil Cooper now oversees marketing for casinos in Palm Springs and Rancho Mirage operated by the Agua Caliente Band of Cahuilla Indians.

Howard Stutz’s Inside Gaming column appears Sundays. E-mail him at hstutz@reviewjournal.com or call 702-477-3871.

 

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