October 1, 2022 - 10:39 pm
Updated October 3, 2022 - 8:40 pm
Station Casinos Inc. is kicking up a dust storm — jump-starting development plans and drawing attention from locals as it looks to double its presence in the Las Vegas Valley.
Southern Nevadans had waited two years to find out what would happen to Station’s three shuttered properties — Fiesta Henderson, Fiesta Rancho and Texas Station – which remained closed since March 2020 after Gov. Steve Sisolak ordered the temporary shutdown of businesses to slow the spread of COVID-19.
When news broke in July that the locals-focused company, owned by Red Rock Resorts, would permanently close, demolish then sell the land beneath the three properties, Station’s plans became more obvious.
Days after announcing the demolitions, the company completed the $172.4 million purchase of 126 acres at the southwest corner of Las Vegas Boulevard and Cactus Avenue, across the street from another one of its land holdings.
Shortly after, it announced a move to close, demolish and redevelop the 260-room hotel-casino Wild Wild West, on Tropicana Avenue west of Interstate 15. The hotel-casino sits on nearly 100 acres of prime real estate across from the Strip and not far from Allegiant Stadium.
Meanwhile, 8 miles away, construction continues on Station’s $750 million Durango casino-resort, located on Durango Drive near the 215 Beltway. Crews are topping off the hotel tower on Friday, and it’s expected to open in the fall of 2023.
During Red Rock Resorts’ second quarter earnings call, Frank Fertitta III, the casino chain’s top brass, told investors they “expect to basically double the size of the portfolio by 2030.”
The flurry of activity over the past two months shows its plan is starting to be executed.
In an exclusive interview last week with the Review-Journal, Red Rock Resorts President Scott Kreeger said the company has six projects in the development pipeline that will double the size and footprint of the company in eight to 10 years.
“There’s no one more bullish on Las Vegas than Station Casinos,” Kreeger said.
“It’s the core of our business model, and the growth over the last few years has been tremendous, as well as over time. Secondly, when we look at the demographics and profile of the people moving into the city and the opportunity to continue to develop projects in areas where we feel are underserved, we think between now and the next eight years, it’s an absolutely optimal time to execute on the roadmap.”
It’s no secret that the 46-year-old company has a history of snapping up and holding onto large swaths of gaming-zoned land. Stations’ M.O. is to identify high-growth areas, buy land then wait for the right time to act.
For at least three of its holdings, that time is coming soon.
Station executives are completing the entitlement process for three of its land holdings — 47 acres in the northwest valley’s Skye Canyon community, 45 acres in the southern valley’s Inspirada community and 126 acres on Las Vegas Boulevard South and Cactus Avenue, near I-15.
The intention is for all three to be a viable project option once Durango is complete.
“If I read the tea leaves into the next 12 to 16 months, we’re very excited about our Inspirada project,” Kreeger said. “We also like the Skye Canyon location — there’s a tremendous amount of growth going on in that area and not a lot of supply.”
Plans for its land on Cactus Avenue have changed. Station considered developing about 57 acres on the northwest side of the intersection but purchased a parcel across the street in July that was more than double in size.
“When we looked at what we wanted to do there in the future, and the availability of the parcel next to our original parcel, we decided to buy a new parcel that would give us a lot more flexibility in master planning,” Kreeger said. “We really like the Cactus site because of its hybrid nature of being both a locals offering and a drive market offering for Californians.”
In the pipeline
To fund its expansion plans, Station Casinos’ leadership wants to unload four sites across the valley — Fiesta Henderson, Fiesta Rancho, Texas Station and its smaller parcel on Cactus Avenue.
Kreeger didn’t say when those sites would be sold or what it would become, though it’s expected that the next owners will not build a casino since it will be part of the terms of the sale. He said the company wants buyers that will use its sites to complement the needs of the surrounding communities.
“We’re actively listing the project so the quicker we can sell, the better for us,” Kreeger said. “Part of our strategic goal is to take the funds from the sale of those properties and reinvest it back in the community via new projects. The capital that’s raised will help us on the road map for future development for projects like Inspirada, Skye and what we call Cactus II.”
Also identified for development are holdings in Summerlin, 58 acres at Flamingo Road and the 215 Beltway; 96 acres at the Wild Wild West site, though some may be held for sale; and about 66 acres at Losee Road in North Las Vegas, a purchase that has yet to close.
It’s still a secret as to which site will break ground first and what each project will look like.
Kreeger said the type of resort depends on the current market conditions, competitive landscape of the submarket, income and density demographics of nearby neighborhoods and a site’s ingress and egress. But each is master-planned to have potential phased expansions.
Projects in master-planned communities like Inspirada and Skye Canyon will likely begin smaller than its Durango project, by about 50 to 75 percent, but still have the expected food and beverage amenities and meeting space.
The Durango project is expected to have a 200-room hotel, a 73,000-square-foot casino floor, four full-service restaurants and an 11-unit food hall.
“Once we’ve gotten Durango cleaned out — let’s call it the first quarter of ‘24 — we’ll be able to sit down and look at the current economic conditions, look at the demographics and make a decision on those projects,” Kreeger said. “Whether that’s Inspirada first and Skye Canyon second, or whether we decide to do that simultaneously, there’s quite a few factors. But the good news is we’re positioning ourselves to have optionality and flexibility and be ready to do that as soon as Durango comes online.”
Bullish behavior draws attention
Analysts following Station’s recent moves feel encouraged by the company’s high-growth mindset.
“It’s a very bold statement. I think it’s ambitious but I also think it’s achievable,” Josh Swissman, founding partner of Las Vegas-based Strategy Organization, said. “The great thing about how the folks at Station Casinos operate is that they are bullish when it comes to growth in the city and they back that statement up by acquiring strategic land assets where it makes sense for them.
“At the same time, though, they don’t have what I’ll call ‘a false sense of urgency,’ meaning once they acquire a piece of land, they’re quite happy to sit on it for a while until it really becomes the right time to just start to build on that land. The Durango Station project is a great example of that.”
Swissman noted the recent activity coupled with selling the Palms, an off-Strip resort, for $650 million in 2021 shows they’ve doubled-down on being a locals market leader.
Brendan Bussmann, industry analyst and founder of Las Vegas-based B2 Global, said he’s eager to see how the company will develop the Cactus II site and the former home of Wild Wild West, adding that both are valued for their proximity to the Strip and I-15. Changes to Wild Wild West site could be part of larger shifts happening near the resort corridor.
“You could see that stretch half a mile down from the Hacienda bridge down to Trop that would connect with a Viva-type development,” Bussmann said, referring to the company’s discarded idea for a multibillion-dollar mixed-use development, Viva, in 2008. “It would be a nice one to go through with it.”
Bussmann said its activity in Southern Nevada shows a long-term investment in the city’s future.
“Stations continues to cement itself as one of the major local players in the market with their assets throughout the valley,” Bussmann said. “I think they’re trying to best equip themselves for not only today, but tomorrow and how they feel the population, players and where they need to be will shift.”
McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at firstname.lastname@example.org. Follow @mckenna_ross_ on Twitter.