STRIP HEADS SOUTH

It's been almost a decade since Anthony Marnell III worked in a Las Vegas casino. Much has changed during that time. But then again, thanks to the current economic meltdown that has zapped consumer spending and sent gaming revenues spiraling downward, some aspects of the gaming business have reverted to years past.

When Marnell opens the doors tonight to the $1 billion M Resort, he hopes the local customer base remembers the days when his family owned and operated the Rio, where value, inexpensive food and good service were emphasized, as opposed to high-priced meals, over-the-top trendy nightclubs and high-limit gaming.

"I'm used to $75 room rates and reasonably priced buffets," Marnell, M Resort's 35-year-old chief executive officer, said last week as workers completed the final steps toward opening the resort, about 10 miles south of the heart of the Strip.

"That's the environment I grew up in," Marnell said. "It forces you to be creative. You can't rely on the building to draw people in, and you can't rely on people walking by you on the street. You have to do something better and be creative to get the customer into the building."

The M Resort is certainly stylish. Glass is a highlighted building material. The lobby has a glass ceiling along with water features. The porte-cochere has several different glass designs and a glass roof. A portion of the casino ceiling is covered by 30,000 square feet of Mother of Pearl seashell material.

On a 93-acre site at Las Vegas Boulevard and St. Rose Parkway, M Resort has 390 hotel rooms, a 90,000-square-foot casino, nine restaurants, 60,000 square feet of meeting facilities, a 20,000-square-foot spa, and 2.3 acres of pool area with fire and water features and an outdoor entertainment stage.

M Resort is opening during the worst economic crisis to ever afflict the Las Vegas casino industry. Clark County gaming revenues plunged 9.9 percent in 2008, the largest single year drop on record. Consumers are not parting with their discretionary spending dollars on entertainment as they have in the past.

Susquehanna Financial Group gaming analyst Robert LaFleur, in an investors note last week discussing Boyd Gaming's $950 million offer to buy a large portion of Station Casinos, said gaming revenues from casinos off the Strip have taken a big hit as Americans work their way through the recession.

"The locals market has clearly been knocked for a loop over the past few years as new supply compounded the negative effects of the Las Vegas housing market collapse and rising local unemployment," LaFleur told investors. "That said, the locals market is probably closer to the end of its problems than the beginning. The same cannot be said for the Strip, which is currently in the middle of a devastating rate war and still has thousands of new high-end rooms coming online in the next year."

Marnell has ideas on how to make sure M Resort bucks that trend and is teeming with customers. He broke ground on the hotel-casino 18 months ago and has been planning the resort for more than four years. The building cost $700 million, while the land is valued at $300 million.

He has plans for a 1.3 million-square-foot shopping mall, movie theaters and other expansion ideas. But that will wait until the economic climate rights itself.

The world may have changed in the past year and a half, but Marnell didn't change his focus.

"The business plan is the same since day one," Marnell said. "I don't think about the (economic) downturn anymore. It's pretty clear nobody is going to come in and save Las Vegas. We're going to have to do that ourselves.

"We've employed 1,800 people. (M Resort) is a great building and we're going to push hard into the market. We'll be smart and aggressive. We want to just get the place open and exposed to customers. After people see it, we'll adjust from there."

Marnell was involved in the marketing efforts for the Rio when his father, casino construction pioneer Tony Marnell, operated the off-Strip resort.

After Harrah's bought the Rio in 1999, the younger Marnell started a computer software business. He returned to the gaming industry in 2006 with the purchase of the Saddle West Casino in Pahrump. A year later, he acquired two casinos in Laughlin from MGM Mirage for $200 million.

He plans to operate M Resort the way his father operated the Rio, which catered to both locals and out-of-town customers.

M Resort's 390 hotel rooms include five two-level loft suites at the west end of the 16-story hotel tower.

But Marnell hammered home a key point: The casino and restaurants are geared toward the audience that populates the Las Vegas Valley.

"We're confident we'll fill those rooms on a nightly basis, but the rate might not be what we originally planned."

Room prices at M Resort are expected to range from $85 to $200 a night depending on the day of the week and time period.

"The business here is all about the locals," Marnell said. "They are looking for value out of me. Our buffet isn't like anywhere else in the world. We'll offer customers free beer and wine. We have a tremendous pastry chef and a live filming studio. We have the type of things we can build value around."

Marnell and his management team will operate M Resort's nine restaurants so they can control pricing and other aspects.

The restaurants, including the art deco-themed, 24-hour Red Cup Cafe, with its outdoor dining terrace; Marinelli's, with its signature Italian cuisine; Terzetto, with steaks and seafood; and the 16th floor Veloce Cibo restaurant and lounge, with its Strip views, will be highlighted.

Last week, M Resort sent about 50,000 letters throughout valley, the highest concentration centering on Henderson and southern Las Vegas neighborhoods that surround M Resort, offering a special package for locals.

The letters also hit mailboxes in other affluent ZIP codes, including areas of Summerlin.

M Resort offered locals a $75-a-night room rate and $75 in free slot play.

In the days after the letter hit, Marnell said M Resort booked roughly 400 room nights.

"We want people to come in and see the place and spend time here," he said.

M Resort is funded through an equity investment by the Marnell family, loans from the Bank of Scotland and a $160 million investment from MGM Mirage.

In 2007, MGM Mirage President Jim Murren, now the company's chairman and CEO, said he was impressed when Marnell presented the idea.

"When I started learning more about the concept, that started the ball rolling," Murren said at the time. "It didn't take a rocket scientist to realize the M Resort is in a great position to capitalize on the tremendous growth in that end of the valley."

Contact reporter Howard Stutz at hstutz @reviewjournal.com or 702-477-3871.