HENDERSON, Nev. — When the Bingo Palace opened off the Las Vegas Strip in 1977, the casino industry didn’t give it much of a chance. But building away from the action led Station Casinos into a lucrative new market — neighborhood casinos.
“At the time everyone thought he was crazy for building off the Strip,” said President Lorenzo Fertitta, son of Station’s founder Frank Fertitta Jr.
Two years after it opened, the Bingo Palace became Palace Station, attracting local gamblers who didn’t want to fight the crowds on Las Vegas Boulevard.
Station Casinos Inc. had found its niche by offering bingo, buffets and later bowling.
“We, in a sense, created the locals market,” Fertitta said.
Today, the Las Vegas-based company has grown into a locals gambling empire as it prepares to open its ninth hotel-casino in the area.
Though Green Valley Ranch Station in nearby suburban Henderson is decidedly more upscale than its counterparts, company officials balk at calling the resort and spa a departure.
Instead, they insist the $300 million property that will feature a Rande Gerber nightclub, a European day spa, a three-acre vineyard and well-known restaurants — Il Fornaio, BullShrimp and Border Grille — is a natural evolution.
“We want to mix a lot of different groups of people,” Fertitta said. “If a guy in shorts and a T-shirt is sitting at a blackjack table with a guy in a suit, then we’ve accomplished our goal.”
Despite its fancy trappings, Green Valley Ranch will adhere to the same formula that has made Station Casinos nearly a $1 billion a year operation — providing easy access and value through food, entertainment and loose slots.
“All this has to be put in a box that’s easy to get to,” Fertitta said. “You need to be located by an interstate or a busy intersection and have ample parking.”
Las Vegas Strip resorts have to build hotel rooms, but Station only has to build parking garages, Fertitta said, simplifying the formula for success. Station casinos also feature movie theaters, fast-food courts and even baby-sitting services to attract residents.
Company officials predict that 80 percent of the new resort’s business will come from local residents, but they hope to attract the other 20 percent from the Strip because of Green Valley Ranch’s access to Interstate 215 and its airport proximity.
“Some people don’t want to stay in a big hotel with thousands of rooms,” Fertitta said. “They want to hang out where the locals do.”
Some industry experts believe Station Casinos is taking a risk and point to the recent failure of the bankrupt Las Vegas Regent, an upscale hotel-casino 10 miles from the Strip that hoped to attract affluent visitors as well as locals to its westside restaurants and casino.
Others believe that the management team’s experience will pay off.
“It’s going to be interesting,” said Jason Ader, a gambling industry analyst for Bear Stearns Co. in New York. “I think if anyone can pull it off, it will be them. Station Casinos are really best at understanding local Las Vegas and customers that make up that market.”
Ader said he thinks Green Valley Ranch will succeed because it’s easy to get to and easy to navigate once inside.
“And it’s beautiful,” he said. “It’s the nicest product I’ve seen in the local market.”
The Nevada Gaming Commission last month unanimously approved the Henderson resort, clearing the way for its Dec. 18 opening.
“I think it’s a magnificent edifice and it’s an ideal location,” said Nevada Gaming Commissioner Augie Gurrola.
The Station resort is only the second new hotel-casino scheduled to open this year in the Las Vegas valley, and both additions are in contrast with the huge hotels that have transformed the Strip in recent years.
While the newest Strip megaresorts boast thousands of rooms, Green Valley Ranch will have 201 rooms and the off-Strip Palms hotel-casino has 455 rooms.
The Palms, a small percentage of which also is owned by Stations and the Greenspuns, opened in November across from the Rio hotel-casino.
Station owns 50 percent of Green Valley Ranch and will manage it; the Greenspun family, owners of the Las Vegas Sun newspaper, owns the other half.
Station now accounts for about 7 percent of Nevada’s gross gaming revenues, and less than 9 percent of Clark County’s. Once Green Valley Ranch opens, Station expects its Nevada share to rise by less than 1 percent, and its Clark County share to rise by 2 percent.
The company reported net revenues of $991.7 million for fiscal 2000, and employs 11,000 workers.
“When we opened Boulder Station in 1994, Wall Street didn’t even blink,” said Glenn Christenson, Station’s chief financial officer.
In addition to Palace Station, the company owns and operates Boulder Station, Texas Station, Sunset Station and Santa Fe Station as well as the Fiesta, the Reserve and Wild Wild West hotel-casinos and has a 50 percent interest in Barleys Casino and Brewery in Henderson.
It sold its Missouri riverboat casinos in Kansas City and St. Charles to Ameristar Casinos Inc. of Las Vegas for $475 million earlier this year.
Station prides itself on being the only Las Vegas casino corporation that didn’t lay off workers following the tourism slowdown after Sept. 11, Christenson said.
Many of the company’s customers are employed in the gambling industry, however, so the estimated 15,000 layoffs on the Strip had a ripple effect.
But Christenson remains optimistic.
“As Strip occupancy and visitor volumes increase, so will rehiring (by Strip casinos),” he said. “Many of those (rehired employees) will be Station customers.”
Ader said Station Casinos is well positioned for a Las Vegas recovery, which he predicts will come mid-2002.
“We are still long-term believers in the Station story, especially given the favorable long-term supply/demand dynamics in the market,” Ader wrote. “We would recommend shares of Station for investors with a longer-term investment horizon.”
On the Net: http://www.stationcasinos.com/