January 13, 2008 - 10:00 pm
Today, celebrity chef Emeril Lagasse looks like a genius.
When he opened the Delmonico Steakhouse inside The Venetian in 1999, the eatery was dispatched to the far northern end of the hotel-casino, away from the action.
Nine years later, the restaurant is center stage. The opening of the $1.9 billion Palazzo put Delmonico and other nearby restaurants into the heart of a complex that encompasses 7,128 hotel rooms, two casinos totaling more than 200,000 square feet, almost 1 million square feet of retail and 2.3 million square feet of meeting, convention and exhibition space.
To hear Las Vegas Sands Corp. Executive Vice President Brad Stone tell the story, the project came out just as company executives had planned.
The Palazzo celebrates its grand opening Thursday through Saturday with several special events, including a concert featuring a performance by Motown superstar Diana Ross.
The resort originally had a different name: Lido, for the resort island that separates Venice, Italy, from the Adriatic Sea.
The name changed, but the conceptual master plan for the resort complex didn’t.
"Right from the beginning, we wanted both properties to be equal distance from the meeting space," Stone said. "The basic layout of the building remained the same. The idea was for the two resorts to be connected, but present themselves as completely different products."
He likened the transition pathway between The Venetian and Palazzo as the property’s "Times Square." When a large trade show is housed in the Sands Expo and Convention Center, thousands of guests can parade between Palazzo and The Venetian throughout the day.
The connection between the resorts is lined with nongaming amenities, including small retail, the showroom for the Blue Man Group and high-end restaurants, such as Delmonico and B&B Ristorante, a partnership between celebrity chef Mario Batali and winemaker Joseph Bastianich.
As guests approach Palazzo, they are greeted by a two-story waterfall, floral arrangements, water features and the indoor entrance to Barneys New York, a Madison Avenue men’s and women’s apparel shop that is anchoring the Palazzo’s retail area with a 90,000-square foot, multilevel location.
The Shoppes at Palazzo have a similar transition when it connects with The Venetian’s Grand Canal Shoppes. The new resort’s 450,000-square-foot retail center has a different theme and style.
"We took the original retail concept but offered a different experience," Stone said.
Deutsche Bank gaming analyst Bill Lerner toured the Palazzo soon after the soft opening. In a note to investors, he said the Palazzo was easily accessible from The Venetian and from the outside via the pedestrian overpasses connecting the resort with Treasure Island and Wynn Las Vegas.
"The square casino floor is extremely easy to navigate with a friendly layout," Lerner said. "Flow between The Venetian-Palazzo-Wynn cluster is smooth sans construction disruption. The combined benefit to Wynn and Las Vegas Sands will be greater than the individual parts."
The Palazzo opened on New Year’s Eve with just the casino and a few restaurants welcoming guests. Music mogul Jay-Z’s 40/40 Club, a sports-themed restaurant on the valet parking level below the Palazzo’s lobby, also opened New Year’s weekend.
Over the past few weeks, portions of the hotel opened along with other public areas. By the grand opening, roughly 2,300 of the Palazzo’s 3,068 rooms will be available while about 50 percent of the shopping mall’s tenants will be in business. Stone said the resort should be fully open by March.
Last week, Stone, who oversees Las Vegas Sands construction projects in Las Vegas, Macau and Pennsylvania, spent much of his time making sure the public area was ready for the grand opening. Final touches were being completed to Barneys, which also has an entrance through the Palazzo’s main driveway. Workers were completing the large fountain in the Palazzo’s porte cochere and several lighting and landscape features were being enhanced. Several Sands executives said a broken sewer line that caused a foul odor in the valet pickup area last week had been repaired.
"People will walk through the resort and say how much they love it," Stone said. "I see little things that don’t look right to me that we need to correct. The water level might be off on the fountains, or some of the floral arrangements need to adjusted."
The Palazzo is the Strip’s first new hotel-casino since the April 2005 opening of Wynn Las Vegas. The hotel-casino is expected to trigger a wave of new Strip projects through the end of the decade.
Because the Palazzo is being operated as an extension of The Venetian, Las Vegas Sands executives have said the company should obtain back-of-house and other operating savings of between $40 million and $60 million for the combined complex. The Palazzo’s casino is being operated under The Venetian’s gaming license.
Stone said the consumer also wins. There are Canyon Ranch Spa facilities in both The Venetian and Palazzo, and the complex houses more than 30 restaurants. The Venetian’s guests are also welcome to use the Palazzo’s fourth-floor pool deck, which has multiple pools and spas and overlooks the Strip.
"The properties are interconnected in many ways for both the guest and our investment," Stone said.
Building the Palazzo on its 14-acre site took longer than most Strip resorts because the initial development went down, rather than up. Construction crews spent 13 months excavating 1 million cubic yards of dirt from the site, creating a nearly 70-foot deep pit, which was transformed into a 4,400-space parking garage. Between the Palazzo, The Venetian and Sands Expo and Convention Center, the site has more than 12,000 parking spaces.
Stone said the excavation project added between $50 million and $60 million to the cost of the Palazzo but was necessary to create the parking component of the resort.
"Land is so valuable in Las Vegas and we had two benefits," Stone said. "We made additional use of a very expensive piece of real estate and we created a unique parking experience. The customer comes from the garage right into the casino either by escalator or elevator."
Portions of the Palazzo are still being built. A 50-story condominium tower that will house some 300 units is under construction near the Strip. Stone said initial sales of the condominiums could begin in the summer. Last April, Las Vegas Sands said it would spend $465 million to build the tower.
The Palazzo theater, which will feature the Tony Award-winning Broadway musical "Jersey Boys," is expected to open in the spring. Lagasse, whose Delmonico was an early success despite its location, is opening a second restaurant, Table 10, inside the Palazzo.
Contact reporter Howard Stutz at firstname.lastname@example.org or (702) 477-3871.