North Strip needs more than bandages to boost financial prospects

Recent events surrounding the Strip's troubled northern end are short-term fixes to a problem that can only be resolved with a pair of implosions and a construction effort not witnessed in more than a half-decade.

The Strip's line of demarcation seems to be Encore at Wynn Las Vegas. Other than SLS Las Vegas and Circus Circus, the north section of Las Vegas Boulevard is a mix of small retail malls, empty land, unfinished developments and closed properties.

A dedicated transformation is needed to revive the nearly one-mile stretch. A few bandages won't do the trick.

If much rumored development projects come to fruition — namely the $4 billion Resorts World and the Las Vegas Convention and Visitors Authority's planned $2.3 billion complex — then SLS's recent deal to re-brand one its hotel towers as the W Las Vegas could be viewed some day as the turning point for the financially challenged property.

Nothing moves quickly when it comes to the north Strip.

Tuesday's news that tourism officials took an initial step toward the eventual demolition of the shuttered Riviera is a welcome sign.

However, the 60-year-old building's date with the implosion experts could be more than a year after the LVCVA actually purchased and closed the property.

Also, if Las Vegas Sands Corp. has its way, the conversion of the Riviera site into a state-of-the-art convention facility will be halted. The owner of the Sands Expo and Convention Center, The Venetian and Palazzo opposes public funding for the project. The company controlled by Sheldon Adelson believes government money should not be used to build possible competition to the private sector.

Meanwhile, Resorts World Las Vegas continues be an enigma.

Malaysia-based Genting Berhad acquired the 87-acre former Echelon development in 2013, five years after Boyd Gaming Corp. stopped its $4.8 billion project on land that once housed the Stardust. Genting was found suitable by state gaming regulators last year and held a ceremonial groundbreaking event for Resorts World in May.

Then, it all went quiet.

"Construction is progressing, albeit extremely slowly," Wells Fargo Securities gaming analyst Cameron McKnight told investors last month after touring the Strip.

Genting hired a contractor to finish the half-built parking garage, but work on the major portion of the complex won't be started until next year.

Resorts World has been compared to CityCenter, the megacomplex opened by MGM Resorts International in 2009. A year later, the Cosmopolitan of Las Vegas became the last greenfield Strip hotel-casino to be completed.

"It's our understanding, there are roughly 20 to 40 workers on site daily (at Resorts World)," McKnight said. "As a point of reference, CityCenter had around 8,000 construction workers at the peak of construction."

The biggest enigma is the shuttered and unfinished Fontainebleau, which has been a north Strip eyesore since construction was halted on the once-$3 billion resort in 2009.

The hulking wreckage will get some window dressing via an agreement between Clark County and the building's owner, billionaire investor Carl Icahn. A decorative tarp will be designed to cover up the worst-looking portions of the 59-story building's lower levels that face the Strip.

But let's be realistic. Icahn, a corporate raider who bought the Fontainebleau out of bankruptcy for $150 million in 2010, is never going to restart construction on the building that is 70 percent complete. He's already sold the property's unique furnishings, specially made escalators and other equipment, including a construction crane that sat atop the tower for five years.

A few years ago, executives from a casino company looking at acquiring the site from Icahn said resuming construction and repairing the damage to the Fontainebleau's interior would have a higher budget than the actually purchase price.

In other words, for the north Strip's overall health, the Fontainebleau needs to be demolished.

SLS Las Vegas officials would welcome some type of resolution to the Fontainebleau mess, for the LVCVA to tear down the Riviera, and for Resorts World to get underway. The critical mass the projects would bring to the area alone would boost SLS's business.

The agreement with Starwood Resorts to transition the 289-room Lux Tower into an upscale W Las Vegas will bring a different customer to the north Strip resort when the renovation is completed next year. SLS Las Vegas is better known for its restaurants than its casino, a distinction property president Scott Kreeger hopes to change.

Howard Stutz's Inside Gaming column appears Wednesdays and Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. Find on Twitter: @howardstutz