From Mirage to Bellagio to Wynn Las Vegas, Steve Wynn projects continue to redefine the casino resort experience, making him our choice for the 2005 Gaming Executive of the Year
To turn a dream into a masterpiece, an artist uses a brush. A sculptor deftly plies a chisel. A symphony conductor wields a baton. These were the images running through the minds of some of the dignitaries three years ago as they stood on the site of what would be Wynn Las Vegas.
There-at the groundbreaking of what would be the world's most expensive and awe inspiring casino resort-they witnessed Steve Wynn with a shovel in his hand, and they watched as the man who has done more than anyone to change the face and character of Las Vegas smile as he scooped some earth.
"Steve Wynn has done more for Nevada than any business leader in history," Sen. Harry Reid (D-Nevada) said. "He turns his dreams into works of art. Las Vegas is his canvas."
Today, seven months after the opening of the $2.7 billion Wynn Las Vegas, the Las Vegas Strip resort continues to drive traffic and generate $3 million in revenue each day. Some, like gaming expert Anthony Curtis, believe the curved, copper-colored 50-story hotel fronted by a 180-foot man-made mountain will help create a paradigm shift toward the long-ignored north Strip.
Even in a city that continually reinvents itself, officials are almost at a loss for words to describe Wynn's latest creation and his unbridled vision.
"Steve Wynn has continually demonstrated the ability to think outside the box and to think big in determining what will draw the public to Las Vegas," Gov. Kenny Guinn said. "Steve is certainly very deserving of being named (Casino Journal's) Gaming Executive of the Year, and he has no doubt been one of the pillars that has kept Las Vegas and Nevada at the forefront of the tourism market."
"I think it's even more than that," added Jan Jones, a senior vice president at Harrah's Entertainment and former Las Vegas mayor. "This city is now a complete resort destination, and Steve was the father of that concept. He saw entertainment as the core component to drive visitors and he worked to make it a reality. He showed us there are other ways (than gaming) to generate revenue, by bringing in great restaurants or high-end retail, for example. He showed us the way."
Even on Wall Street, where one might not expect to find as many believers in Wynn's vision, considering MGM Grand's less than friendly acquisition of Mirage Resorts in 1990, there are still many who are greatly impressed with the accomplishments of the man whose latest resort bears his name.
"Any relationship that any company has with Wall Street goes up and down depending on the success of that investment that exact moment," Deutsche Banc bond analyst Andrew Zarnett said. "Steve has done what a lot of people doubted. He built the largest hotel in the world on time and on budget. His first full quarterly results beat Wall Street's estimates, and his reported margins were higher than Bellagio."
What will help Wynn produce strong returns at his new resort, Zarnett explained, is a low cost of capital. Zarnett estimated Wynn is paying a blended rate of 6.75 percent on loans. This is a much more favorable rate than Wynn obtained in the late 1980s when he financed the bulk of construction costs for The Mirage through junk bonds.
Zarnett also points out every time Wynn has opened a new Las Vegas property, he's grown the market, "and the proof is in the results. If you look at the last quarterly report, the results were all up year after year. You can look as hard as you want, and you won't find any cannibalization (of Strip properties) with the opening of Wynn."
Lehman Brothers gaming analyst Jane Pedreira believes Wynn is a pioneer, simply because he done more to change the face of Las Vegas than any other person. "He's been able to redefine the modern Las Vegas. I almost feel he's the father of Las Vegas."
Pedreira stresses "the jury is still out" on how much of a success Wynn Las Vegas will be, "but it's a beautiful property."
What impresses Pedreira the most about Wynn is his sheer force of will.
"Here's a man who, genetically speaking, is destined to go blind (Wynn suffers from Retinitis Pigmentosa) and he builds and builds," Pedreira said. "He's basically an artist, and his medium of creation is the gaming venue. He reminds me of Beethoven writing his last symphony, but he doesn't stop. He continues to move forward. And I think that's remarkable."
Confidence and ability
The son of a bingo parlor operator, Wynn also is not afraid to put it all on the line. Wynn proved this nearly 20 years ago when he began planning Southern Nevada's first megaresort.
"At that time the cost for The Mirage was something like $611 million," said Alan Feldman, spokesman for MGM Mirage and former Wynn employee. "That was more money than the combined cost of every (Las Vegas) hotel before. He needed $1 million a day just to break even. The notion at the time was the Steve was going to blow it. I still remember the headline of one national magazine: 'Snake Eyes for Steve.'"
"Everyone thought he was going to go under," Jones said. "Sometimes you wonder what compelled him to take that risk-to put it all on red."
There was at least one person who had no doubts about the success of the Mirage.
"You can build a volcano to get people to come to the hotel. But it's what's inside," Wynn told Casino Journal. "You have to remember slot machines and gaming tables are a commodity. They have no uniqueness. You can be at any gaming table anywhere and in an hour and half it's all the same equipment. But when you offer fine restaurants and shops and pools and theaters and you have the right mix and the right presence, you now can create an experiential moment for your guests."
Over the years, Wynn said he has weathered countless crazy questions from reporters about whether he employs tricks such as pumping oxygen into gaming areas to keep people playing longer.
"Think about it," Wynn said. "If you pump more oxygen into a building, you increase the chance of an explosion."
Wynn explained his hotels are carefully designed to virtually reach out and capture the interest and attention of passersby. And once inside, guests find themselves in a place where they have the opportunity to experience special moments.
"It's not trick stuff," Wynn said. "Inside there's natural, diffused light from the sun. There's water. There are flowers and trees. These things aren't just decorative elements. Think of a time when there was beginning of life on earth. We don't stray very far from these elements."
When Wynn speaks in the plural, it's not because he prefers the King's English. He's referring to his employees. There are 9,500 full-time workers at Wynn Las Vegas, and Wynn said each one shoulders a crucially important role in delivering the product and in communicating with guests.
"I don't know what the guys are doing at the other hotels, but it has always been the majority issue (at Wynn properties) to recognize the staff as the principal asset. Not how many rooms or hotel amenities or any other synergistic doubletalk, but strictly the warmth and friendliness of the staff to make the guest's experience a positive one. Nothing else comes close to that."
In other words, Wynn said: "Pay attention to the employees. Learn how to listen to the employees. They run the business. Who's touching the customers every day? Who knows what's going on, and what kind of feedback is occurring?"
Wynn explained that while payroll is traditionally perceived as a corporation's largest expense and a common starting point when cuts are considered, he perceives payroll "as the principal asset to be exploited." This is one reason why Wynn meets with employees as often as possible, and why he believes in productivity incentives.
"The idea is to develop the tentacles, the feelers, that protect you from isolationism," Wynn explained. "You can only be at one place at one moment. That's why proper feedback is crucial. It's not about how expensive or how rich we are. The idea is to make people glad we're there and to have employees who are happy and content on the job. If we can do this, then we will get all the business. There's no chest thumping here."
Over the past quarter century, through Wynn's expansion of the Golden Nugget and construction of the Mirage, Treasure Island and Bellagio resorts, the man some call the father of modern Las Vegas has created more than 37,000 direct jobs in Southern Nevada.
"They tell me that for every direct casino job, there are three other jobs created outside the casino, Wynn said. "So if you add the direct and indirect jobs, you come up with almost 150,000. That means I may have been responsible for 10 percent of our traffic jams."
While some observers credit the recent casino resort building booms with fueling Southern Nevada's economy, Wynn is more specific. He says it's the choices today's modern megaresorts offer that contribute to the area's vibrant economic climate.
"Today, the list of options (for visitors) is overwhelming," Wynn said. "People who come here can choose from the greatest food and fanciest service to the best shops. It's what keeps Las Vegas healthy."
Many of the "options" introduced by Wynn over the last 30 years have become today's staples of the Las Vegas casino resort industry.
Before Wynn took over operation of the Golden Nugget in 1973, Las Vegas buffets were little more than aluminum trays filled with gobs of multi-colored carbohydrates, and offered to hungry visitors for about the same price as a minimum bet on a 21 table.
Under Wynn's helm, the Golden Nugget buffet, with fresh fruit, various salads, tender meats and mouthwatering bread pudding, achieved national acclaim.
Today, practically all Las Vegas buffets-especially those in the larger Strip resorts-offer expansive selections, international dishes and command prices up to $25 or more.
It was Wynn who introduced trendy restaurants like California Pizza Kitchen, Coconuts and Mikado to Las Vegas when he expanded the Nugget and built The Mirage. At Kokomo's in The Mirage, guests were invited to "dine in a tropical rainforest surrounded by waterfalls and a sparkling tropical lagoon." In 1998, Wynn again raised the bar with the opening of Picasso at Bellagio. A recipient of the American Automobile Association's Five Diamond Award, this gourmet restaurant overlooks the resort's manmade lake and is adorned with Picasso masterpieces.
At the Mirage, the Dolphin Habitat was a personal dream of Wynn, who conceived of creating a desert habitat for graceful and intelligent sea mammals.
Other resort amenities pioneered by Wynn include botanical gardens, full service fitness and health spas, large convention and meeting areas and expansive high-end retail promenades.
Among Wynn's most novel concepts was the 1998 opening of the Bellagio Gallery of Fine Art. When it opened, the gallery contained priceless art works by Picasso, Renoir, Gauguin, Rembrandt and other masters, including several paintings from Wynn's private collection.
A passionate art collector, Wynn, whose net worth is estimated at $1.3 billion according to Forbes magazine, frequently buys and sells masterpieces. After the MGM acquired the resort, the gallery came under the administration of the Pace Weinstein Gallery of New York. Each year the gallery presents world-class exhibitions of artworks and objects drawn from internation-ally acclaimed museums and private collections.
Above and beyond
At his newest resort, Wynn again raised the bar.
The average room cost of the $2.7 billion project is $1 million. That's a world record. Each one is adorned with multiple flat panel televisions, high-speed Internet access, multi-line cordless phones and CD players.
Guarding the entrance to the resort is a 180-foot man-made mountain covered with Aleppo pine trees rises that buffers the hotel from the noise and commotion of the Las Vegas Strip. The mountain also provides a backdrop for the resort's 70-foot waterfall and three-acre lake.
Among shopping boutiques, there's Brioni, Cartier, Chanel and Dior. Among fine restaurants, there's Alex, offering Riviera cuisine; SW Steakhouse and "Wing Lei," offering Cantonese, Shanghai and Szechwan cooking styles.
And for those who hit it big in the casino and want to drive along the Strip in something special, there's Penske/Wynn Ferrari Maserati, Nevada's only factory-authorized dealership for the fine automobiles.
As Wynn approaches his 64th birthday, and his most massive casino resort settles into gear, will he take some time off to relax? That would be like asking Thomas Edison to leave the workshop.
Wynn is busily planning Encore, a second megaresort at the 235-acre Wynn Las Vegas property, bordered by the Strip and Desert Inn Blvd. Earlier this year, the cost of Encore was projected at $1.4 billion, and plans included 2,000 luxury suites. Construction is planned to begin later this year and the opening is planned in 2008.
If this weren't enough to occupy the developer, he also has his sights set on an emerging gaming destination on the other side of the world.
Construction has begun on the $705 million Wynn Macau on a 16- acre parcel near Macau's inner harbor, just across the street from the city's best known hotel-casino, the Hotel Lisboa. The resort, scheduled to open late next year, will have 600 rooms, several restaurants, a ballroom and a man-made lake featuring a water fountain show set to music.
His neighbors there include Sands Macau, owned by Las Vegas Sands chairman Sheldon Adelson, and in operation since May 2004; Venetian Macau, another Adelson venture scheduled to open late next year, and MGM Grand Macau, owned by MGM Mirage and Pansy Ho and scheduled to open in late 2007.
"We're the first fancy one," said Wynn, ho added, "I think the opportunities there are enormous, and we'll be singing the same song there as here."
Steve Wynn Timeline
1942 - Stephen Alan Wynn is born January 27 in New Haven, Conn.
1952 - Wynn first visits Las Vegas with his father, bingo parlor operator Michael Weinberg, who would quietly make his way to the casino floor to shoot craps, after making sure his 10-year-old son was asleep in the hotel room.
1963 - Weinberg dies during open-heart surgery. Wynn graduates from the University of Pennsylvania with a bachelor's degree in English. He later attends Wharton Business School. Also that year, Wynn marries Elaine Paschal, a beauty queen (former Miss Miami Beach) and student at George Washington University.
1966 - Daughter Kevyn is born.
1967 - The Wynns move to Las Vegas. Steve Wynn invests in the Frontier Hotel, and takes a job as slot manager and assistant credit manager. A year later, Wynn leaves the Frontier after allegations surface that several of his associates at the hotel are mob connected. Wynn is not accused of any wrongdoing.
1969 - Daughter Gillian is born.
1971 - Wynn makes headlines when he announces plans to build the world's narrowest casino on a strip of land at the corner of Flamingo Road and the Las Vegas Strip. Earlier, Wynn obtained an option on the land along Flamingo from owner Howard Hughes. Caesars eventually purchases the land for $2.25 million, netting Wynn and a partner a profit of more than $1 million.
1973 - After purchasing enough stock to become majority shareholder in Golden Nugget, Wynn takes over management of the downtown hotel. Within four years Wynn transforms the low-frills gambling joint into a Four Diamond resort known for elegance and personal service. He also adds nearly 580 rooms and increases profits more than tenfold to $12 million a year.
1978 - Wynn uses profits from the Golden Nugget in Las Vegas to build the 506-room Golden Nugget Hotel & Casino on the Boardwalk in Atlantic City. The resort, which opens in December 1979 quickly becomes known for its elegant facilities, television ads featuring Frank Sinatra and its impressive lineup of superstar entertainment. In spite of its diminutive size, the Nugget dominates the Atlantic City market in revenues and profits.
1987 - Wynn sells the Atlantic City Golden Nugget to Bally's for $450 million, netting a profit of nearly $290 million. Wynn begins planning construction of what would become his company's flagship property, The Mirage, on the Las Vegas Strip.
1989 - The $630 million Mirage opens on the Las Vegas Strip and Spring Mountain Road. Wynn invests a great deal of his money in the resort, and the rest-some $565 million-is raised through the sale of high interest junk bonds. To service the debt, the new hotel will have to earn $1 million each day. From the day the Mirage opens in November, the new major Strip resort-the first since 1973 when Kirk Kerkorian had opened the MGM Grand-greatly exceeds expectations. The Mirage, with its South Seas theme and erupting volcano, ignites a $12 billion boom that catapults Las Vegas into America's number one tourist destination and the nation's fastest growing city.
1991 - Golden Nugget Incorporated is renamed Mirage Resorts Incorporated.
1993 - In July Kevyn Wynn is kidnapped at gunpoint as she drives into the garage of her southwest Las Vegas home and is held until her father pays a ransom of $1.45 million from the casino cage at The Mirage. After releasing the young woman unharmed, kidnapper Ray Cuddy is arrested in Newport Beach after foolishly paying cash for a Ferrari. He was sentenced to 24 years in prison. His accomplice, Jacob Sherwood, was sentenced to 19 years. A third kidnapper who testified against the other two was sentenced to six years.
1993 - In October Wynn opens the $430 million Treasure Island just to the north of The Mirage, establishing a new paradigm by which casino themes are designed. At the front of the nautical-themed resort is Buccaneer Bay, a blue lagoon where a pirate galleon and a British frigate-both fully rigged-engage in mock sea battles several times a day. The interior of the Four Diamond resort with its romantic tropical theme and black carpets decorated with jewels and gold doubloons immediately begins drawing visitors without cannibalizing The Mirage.
1998 - In October, Wynn raises the bar again when he opens the $1.6 billion, 3,000-room Bellagio, the most expensive resort ever built. With its sumptuous guest rooms, high-end retail stores and traditional European feel, Wynn's new, opulent South Strip resort appeals to a more high-end audience.
1999 - Wynn oversees development of the 1,835-room Beau Rivage. Built at an estimated cost of $675 million, the resort with its multi-storied atrium filled with magnolia trees and floral-design tile floor centerpieces is the largest, most expensive and most lavish resort in historic Biloxi, Miss.
2000 - With Mirage Resorts stock price declining, MGM Grand chairman Kirk Kerkorian offers to pay $21 per share-nearly twice what the stock trades for-in a buy-out attempt known on Wall Street as a "bear hug." In June MGM Grand buys the company for $6.5 billion, including $2 billion in debt. The merger nets Wynn more than $500 million, the bulk of it from sale of his Mirage stock. A month later, Wynn buys the 217-acre Desert Inn property and begins planning his next Strip megaresort.
2002 - Wynn signs a deal with the government of Macau to develop a 600-room resort on the former Portuguese colony not far from Hong Kong. The Wynn Macau, scheduled to open in the first half of 2007, will include 100,000 square feet of casino space and 28,000 square feet of retail space. Macau awards two other licenses to a company controlled by Las Vegas Sands, owned by Venetian head Sheldon Adelson, and Macau Gaming Co., a subsidiary of tycoon Stanley Ho's Macau Tourism and Amusement Company.
2005 - Wynn Las Vegas, Steve Wynn's $2.7 billion megaresort opens at the site of the old Desert Inn to throngs of patrons on April 28, Elaine Wynn's birthday. The resort features a 140-foot high, densely landscaped mountain that separates the resort from the noise of the bustling Las Vegas Strip. Several restaurants open outdoors to the mountain, which is fronted by a three-acre lake with waterfalls. Ambient light floods the interior of the resort. Near the main entrance, countless flowers provide a floral scent, and colorful silk parasols dangling from the ceiling dance up and down to music. The retail area encompasses 75,000 square feet, two thirds the size of the gaming area. Among the shops: Cartier, Dior and a factory-authorized Ferrari and Maserati dealership. Behind the resort is an 18-hole golf course designed by Tom Fazio and Wynn.