Effecting a transformation
A friend and Caesars co-worker had recently interviewed with Owen Nitz and Jeff Cooper, the two key trustees for the late Ralph Engelstad’s casino operations. The job? A challenging position at the helm of the Imperial Palace Hotel & Casino in Biloxi, Miss., a struggling property beleaguered by a poor product and even poorer service. His friend ultimately took another position, but recommended Lucas for the task.
“That’s how they stumbled upon me,” Lucas said, recalling how he was intrigued by the challenge.
After meeting with Nitz and Cooper, Lucas traveled to the property to tour it incognito. He was asked to give his honest observations. Lucas didn’t hold back, suggesting that if the property was to have any chance of success, then major changes were needed.
“It was on the bottom tier of the market and had a very poor food and beverage product. It was a very tired property, a dirty property. The employees had low morale. But through all that, I saw potential and opportunity,” Lucas said. “I laid out what it would take to turn the property around and said, ‘if you’re not interested in this, that’s fine, it’s your business. If you don’t want to make this a first-class property, then I’m really not going to be interested in the job.’”
Despite the significant financial commitment that would come with Lucas’s suggested course of action, Nitz and Cooper agreed. No one could have imagined just how important a role Lucas would come to play, not just for the property, but for the Gulf Coast communities and its citizens in the months ahead.
Weathering the StormLucas, on the job as the new president and general manager for just two months, had barely begun tackling the challenges of Imperial Palace when in late-August of 2005, Hurricane Katrina wreaked havoc along the Gulf Coast. Lucas was in Arizona visiting his kids at the time the storm hit. His trip back was a memory he said he’ll never forget.
He flew back as far as Memphis and then charted a friend’s plane to Mobile, Ala., where he rented a car and drove back to Biloxi. “The devastation and the destruction was beyond description. Words and pictures and TV just didn’t do it justice,” he said.
At the same time, Nitz and Cooper were also on their way to Biloxi, ready to assess the situation with Lucas and devise a new plan of action. The Imperial Palace, on Biloxi’s Back Bay, was largely spared from the overwhelming devastation the storm wrought on properties that sat right on Mississippi’s usually-scenic Gulf of Mexico.
“To say that we had the least amount of damage [of any of the Mississippi Gulf Coast properties] is accurate. The fact is, we still had a significant amount of damage,” Lucas said. “We took 12 feet of water in the first floor of the pavilion. The ramps that connect the pavilion to the casino barge collapsed and shattered. We had a lot of roof damage, some water penetration in some guest rooms. There was some damage to the side of the barge where one of the ramps collapsed into the side. But the barge did exactly what it was supposed to. It rose on the moorings. Had it gone up another foot, it would have probably come off.”
Next, Lucas and the trustees took a tour of Biloxi, Gulfport and the surrounding areas. Lucas said the most eye-opening sight to him were the massive casino barges that had been scattered on land like toy cars.
“You have no appreciation for how big a barge is until you see it sitting up on land, hundreds of yards away from its original location. It’s mind boggling. You go on Highway 90, and there was nothing. You get to the Point (Cadet), and it was rubble. Houses were picked up, and nothing was left but brick piles,” he said.
No second thoughtsLucas, the trustees and just about everyone else that had involvement with the Imperial Palace could have used the devastation as an excuse to walk away. At the time, it would have been one of the least of the coastal communities’ concerns. However, Lucas said giving in was simply not an option that was ever discussed.
Instead, a command post was set up in the property’s parking garage, with another inside the relatively unaffected second-floor convention center. The idea, Lucas said, was to get to work immediately to not just restore the property, but to take the opportunity to make it better, while sharing opportunities that were afforded to them, such as housing emergency workers in the hotel rooms and putting employees and others back to work.
“We rolled our sleeves up and went on the air and announced to all of our associates to come back to work if they were willing and able. Obviously, they weren’t going to be serving cocktails or dealing blackjack, but we’d give them something to do. That really was a great step toward changing the culture and attitude and the morale,” Lucas said. “And you know what? People came back. They lost everything. We housed employees and their families, we fed them all … really whoever wanted to come in.
“One of the things I said early on was, ‘what better way to rebuild the economy than to employ 2,700 employees,’ which is what we employ today. What better way than to put those people back to work? Those people saw hope in what was a hopeless situation for a lot of people. They got to come back to work and they saw us working so hard, as a team, as a group, to get reopened. Certainly, it was a shot in the arm.”
The hotel was opened to house FEMA personnel, families and other emergency workers just two weeks after the storm. The property also became the first to reopen to the public in December of 2005, putting even more people to work and bringing the first real sense of progress and normality back to the Mississippi Gulf Coast.
In the months it took to reopen, Lucas and his staff weren’t just patching up the place; they were accelerating a complete transformation - one that is still continuing today. Lucas, new to and relatively unknown in the market before the storm, became an instant hero and mentor to many.
“Jon’s done a tremendous job. I think that he’s been a real player in the community,” said Biloxi Mayor A.J. Holloway. “The whole organization, from the trustees to Jon and his staff, has really become a huge asset to the city of Biloxi.”
“Imperial Palace, which had started a redesign effort before the storm, had a head start. They went gangbusters with the redesign, and when they reopened, it was met with huge fanfare,” Michael Sunderman, publisher of Mississippi Gaming News said last year. “Jon Lucas and the staff really stepped up and became community leaders.”
Lucas, for his part, said he’s flattered by the comments he’s received, but said his success boils down to two things: the plan that was already in place prior to the storm, and the people around him.
A complete transformation“We really had three missions when I got here,” Lucas said. “One was repositioning the property as it related to the employees and their desire to work here - becoming a place people wanted to work; two was repositioning ourselves with customers; and three was repositioning ourselves with the communities. We didn’t have a good reputation in the community.”
Since 2005, the changes to the property have been staggering and eye-opening. The name Imperial Palace was changed to simply the IP. The Asian theme that adorned the property was removed in favor of a more contemporary one. Lucas said the storm allowed for the opportunity to get all new table games and replace about half of the slot floor with 1,400 new machines. New slot bases and casino carpet were acquired, and high-limit table and slot areas were added. A poker room, which hadn’t existed on the property before, was also added.
The property’s entire lobby area was redone and a VIP check-in area was added. The IP’s most valuable asset, its 1,086 hotel rooms, were completely refurbished, creating upscale suites and guestrooms that were fresh and appealing.
“I equate it to basketball, and one of the favorite expressions in basketball is ‘you can’t teach height.’ In our business, you can’t teach hotel rooms,” Lucas said. “When you have the 1,086 hotel rooms that this property does, in spite of the fact that they were in bad shape - dirty, with old, used furniture - if you can get them to become a quality product, then you have great opportunity.”
Another key opportunity for the IP was an area that it had sorely lacked in previously - amenities. Lucas and his team added: Carnaval de Brasil, a Brazilian restaurant; the Chill ultralounge; Infusions, a gourmet coffeehouse; a state-of-the art, first-class spa; a significantly reworked buffet with six action stations; a four-diamond steak and seafood house, Thirty Two, on the 32nd floor of the property; a sports bar on the property’s second floor; a refurbished coffee shop; and a new boutique shop and sundry shop.
“We also have a 750-seat showroom. It was only 500 seats before that. We have a plan to renovate it again, hopefully beginning in June, which will take it to 1,400 seats,” Lucas said.
And as of this writing, the IP is opening a new section of the property that includes a new Asian-themed restaurant and additional casino space. It’s the property’s first foray into land-based gaming, which the Mississippi Legislature allowed for following Katrina.
“We worked very hard so people would perceive it as something different. We knew we’d get the trial. Then it was our job to convert them to loyal customers,” Lucas said.
And accomplish that, Lucas and his team have.
Popular againFor years prior to Lucas’s arrival, the Imperial Palace had come to be known in many circles as a gaming joint frequented largely by senior citizens and hardcore, but low-value gamblers. There was little else to do in the property (or that patrons wanted to do). Today, though, the IP now enjoys local and regional fanfare it hadn’t experienced since the property first opened in 1997.
The amenities, the nightlife, the food and beverage product and other systematic changes have lured in new crowds, crowds with expendable income looking for fun and excitement.
We’ve really lowered the average age of our customer significantly. Again, it really was a change in the whole property. It became a younger crowd,” Lucas said. “Just the whole feel and look of the property has helped. We’re so different from before that it’s hard to compare demographics from before and after.”
The IP is still a regional property, but now has the amenities to attract higher-end players, Lucas said. And the number of guestrooms available enables it to reach out to beyond the locals market to pull patrons from North and South Carolina, Georgia, Florida and other areas.
Dennis Conrad, president and chief strategist with Raving Consulting, a Reno-based marketing and promotional consulting firm, said Lucas did everything right from the start.
“He obviously has guts to want to take on a situation like the Imperial Palace and turn it into what he turned it into,” Conrad said, adding that he considers Lucas sharp, savvy and very knowledgeable of how to run a gaming-resort operation. “But more impressive than his guts is that from a marketing and operations perspective, to take on a big challenge like that, you have to nail all the pieces if you’re going to be successful. And he did. He got to employees, he got to the database, he got to direct marketing, he got to food product, he got to cleaning up the place, he got to building bridges with the community - everything that we preach here at Raving, he followed through with. I like the integrated approach he took to the task, and I like to use him as a case study in being successful.”
Conrad also notes that Lucas seems to have the power to draw people to him, to make people listen and understand, to be open and communicative and that he doesn’t shy away from being candid.
“I’ve always seen him with friends around, which tells me he’s either a very likeable guy, or he’s a great mentor. He’s always traveling with other folks. My guess would be that he’s always trying to teach people and share knowledge and chat about things he sees when they’re out and about,” he said.
Lucas said he considers himself a “fairly hands-on person,” largely because of the continual amount of work and planning that goes into ensuring the IP stays a success story.
“I’m very visible on-property, and I expect my team to be very visible as well,” he said.
Experience and involvementLucas’s journey to the Gulf Coast began with his first gaming industry job at the Sands property in Atlantic City. He began in 1984 (when it was owned by Hollywood Casino Corp.) as director of administration. Over the next 11 and a half years, he worked his way up to become senior vice president of operations.
He then took a position with Ameristar Casinos in 1995, opening its Council Bluffs, Iowa riverboat casinos. After a year there, he moved to the Las Vegas Valley, where he went to work for Primadonna Resorts as senior vice president and general manager of the company’s three casino properties on the Nevada-California border, roughly 35 miles southwest of Las Vegas. He was there for four and a half years until MGM Mirage bought out the company. That’s when Lucas went to work for Caesars Entertainment in Tunica and ultimately found his way to Nitz and Cooper.
Since moving down to the Mississippi Gulf Coast, Lucas has found himself involved heavily with social, political and charitable organizations, including currently serving as the chairman and president of the Mississippi Casino Operators Association.
“Jon is a true asset to the community and has brought a wealth of experience and knowledge to the IP Biloxi,” said the organization’s executive director, Beverly Martin. “And as the MCOA’s chairman, I feel extremely confident in his ability to lead our organization’s continued growth and success in Mississippi.”
Lucas is very active with the Gulf Coast Business Council, a group of private and public businesspeople that organized post-Katrina to really help to push public policy and effect change. He is also a board member of the Walter Anderson Museum of Art. Through the IP, he has become involved in a number of charitable drives as well, citing working with the American Heart Association as one of his favorites. In the little free time he gets, Lucas said he likes to travel, golf and experience fine dining and wine-tasting.
He remains optimistic about the long-term outlook of the Mississippi Gulf Coast gaming market.
“I think the realization has set in that recovery is going to take a little longer than everyone thought. I think, at first, the assumption was that we’ll be back up and running in two, three, four years. But it’s just such a slow process,” he said. “But it’s moving in the right direction, and the Gulf Coast Business Council has been very instrumental in that. The long-term prospectus for these communities is very, very strong.”