For more than two decades, Station Casinos has dominated the locals casino market in Las Vegas. This decade alone has seen the company’s developments become larger and more impressive: Green Valley Ranch Resort & Casino in 2001; Red Rock Resort & Casino in 2006; and the anticipated opening of Aliante Station later this year. Now, Station Casinos is venturing into an arena that only two other gaming companies have braved - the development of a massive urban center anchored by a megaresort with multiple hotels, shopping, retail, entertainment and other upscale offerings.

Armed with 110 acres of valuable land at the site of its Wild Wild West Casino just off the Las Vegas Strip, Station’s proposed project, dubbed Viva, would be similar in size and scale to MGM Mirage’s $8 billion CityCenter, company CEO Frank Fertitta III recently told the Las Vegas media. However, early reports indicate that Station’s project could cost even more than CityCenter, with the possibility of the price tag reaching $10 billion. Boyd Gaming, another company that has been strong in the Las Vegas locals market, also tossed its hat in the urban megaresort development ring with its $4.8 billion Echelon project.

Though Viva was just announced as of this writing, early scuttlebutt from the industry is that some people are shaking their heads in amazement. For starters, there are questions about the state of the economy, especially noting that many ambitious projects that have been announced or proposed recently are struggling to get off the ground. Tightened financial markets, fears of recession, cost of land and other factors have certainly had an impact. There is natural worry that Station’s project could also face such hardships. Another potential point of concern is that while both MGM Mirage and Boyd Gaming’s projects are being built on the Strip, Viva will not. Some believe this will make such an ambitious project not only a harder sell, but tougher to get a return on investment from once complete. Yet another question has been raised: While Station is a powerful locals casino operator and really knows its game in that arena, does it have the resources and experience to jump from there straight to what would become the most expensive mixed use urban development to date?

Deutsche Bank gaming analyst Bill Lerner recently noted that this is the type of project that would have been nearly impossible for the company when it was still publicly traded. “It is a project Wall Street would have taken exception to,” he recently said. But since the company went private with the $5.4 billion buyout by a group led by the Fertitta family and the private equity firm Colony Capital (another experienced gaming operator), Station now has more leeway to press forward with such ambitious plans.

But Lerner also noted that the Viva project should be taken seriously. I agree. Despite the  concerns I noted above, I truly believe that if any company can pull off such a challenge, it is Station Casinos. Ambitious? Yes. Risky? Certainly. But I feel the Fertittas and Colony could find opportunities here that other companies only dream about.

And I love the early approach. Viva is hospitality centric. There are plans for 5,200 hotel rooms in the first phase alone, and the company said it will also look at the possibility of building an arena. What is noticeably absent from the announced project, however, is living space. There has been no mention of condos, timeshares, upscale apartments or other residential dwellings. And I’ve confirmed with company sources that, at least for now anyway, there are no plans to include them. I think that’s very smart. We’ve all seen the housing market in Las Vegas and it isn’t pretty. Scores of unfinished projects abound and property values have plummeted. Conversely, hotel rooms are always in demand and prices reflect that … even in today’s dismal economy. And if you throw the potential arena into the equation - something city leaders and even some other gaming companies have bandied about for years now as a way to attract a professional sports team - that value could increase even more.

If Station keeps residential developments on the sideline and can really deliver with the overall quality of the project, Viva just might be a winning bet.