Steve Wynn Archive

We learned last week that Harrah’s, struggling under billions of dollars of debt, will postpone the opening of the Octavius Tower, which has been under construction since 2006. The 660-room tower won’t open until demand for Vegas hotel rooms improves. There’s a subtle irony here, for those who know strip real estate history.

The rise of Steve Wynn from slot manager and minority owner at the Frontier, to hotelier controlling the Golden Nugget, came because of a brilliant real estate deal forged between Howard Hughes, banker E. Parry Thomas, Wynn, and Caesars’ (long before Harrah’s was involved). The land was the very property on which today sits the unfinished Octavius Tower.

Power lines at Caesars (click to enlarge)

Its all about those  high voltage power lines that run along the south edge of the Caesars’ property, that jog and run between Bill’s Gambling Hall and Saloon (formerly the Barbary Coast) and the Flamingo. In the 80s, those lines ran a straight line across the street and formed the southern edge of Caesars. Howard Hughes owned the property south of the lines to Flamingo Boulevard.

Wynn was able to convince Howard Hughes to give him an option to buy that land, which was a remarkable feat as Hughes rarely sold investment land, and he let it known around town that he intended to build a casino much like the Barbary Coast. It wasn’t long before Caesars’ was offering the sun, sky and moon, and with the profits, Wynn took control of the Golden Nugget.

So Caesars’ cancelling expansion plans shortly after Wynn successfully opened his Encore expansion has some real historic irony in Las Vegas. Steve Wynn end-runs Caesars’ again!

There’s old Vegas and new Vegas, and the line between the two was probably drawn November 22nd, 1989. That was the day Wynn’s folly–the 3,044 room luxury hotel–opened on the Las Vegas strip. The old Vegas casino magnates clucked their tongues about the impossible daily take CEO Steve Wynn would have to pull in just to keep the doors open.

But the Mirage shocked the experts, and it wasn’t long before the old Vegas hands had to make a choice: either emulate Wynn and build mega-resorts in his image (Mandalay Bay) or hold on to the 99 cent cocktail, the free slot pull and the marketing message that Vegas gives you something for nothing.

It really started before the Mirage, when Steve Wynn gained controlling interest in the Golden Nugget, downtown.

The Mirage Today

He swept the sawdust off the floors and brought in decorators who replaced it with marble, which was polished every night.

Fine art went up on the walls, even in the rest rooms, and the staff were schooled in treating guests like they were at the Ritz-Carlton and not at some sleezy gambling joint in sin city.

The buffet, which used to be a way to eat cheap food for a pittance (Circus Circus priced its breakfast buffet at 99¢), cost a whopping $27 for the Cornicopia dinner at the Nugget and included all the steamed crab legs you could eat. Steve Wynn saw Las Vegas differently than it had been seen for decades, and his success in turning a failing downtown hotel into the talk of the town attracted the investors that enabled him to change Vegas.

The old Vegas still lives on, in downtown properties like the El Cortez, owned by the venerable Jackie Gaughan and in some of the downtown and Henderson Boyd properties.

But most of today’s Vegas can trace its lineage either to Steve Wynn, or someone trying to emulate him, and now Wynn has upped the ante in an industry that is hanging on for dear life. Harrah’s and Station Casinos are trying to stay afloat.

When Wynn opened his Encore hotel, a near twin of the hotel that bears his name on the old Desert Inn property across from Fashion Show Mall, and aggressively cut rates to keep it full, he’s changed the game in Vegas again, and while no one is sure how it will come out, my money’s on Wynn. He hasn’t always made the perfect decisions, but he’s rarely made a wrong one.