Downtown Las Vegas gaming revival continues as Plaza, Stevens and others plan future

December 17, 2018 5:03 AM
  • Howard Stutz, CDC Gaming Reports
December 17, 2018 5:03 AM
  • Howard Stutz, CDC Gaming Reports

As downtown Las Vegas’ Plaza Hotel & Casino prepared to celebrate the seventh anniversary of Oscar’s Steakhouse, the restaurant themed after Oscar Goodman – the mob lawyer-turned three-term mayor of Las Vegas – CEO Jonathan Jossel welcomed D Las Vegas/Golden Gate owner Derek Stevens to the second-floor space.

Invited guests mingled in the bar area as Jossel and Stevens talked quietly and gazed through the restaurant’s glass dome toward the Fremont Street Experience. What they discussed stayed private. Together, they represented the past, present and future of downtown Las Vegas.

Jonathan Jossel

Within clear view across Main Street is the currently vacant city block where Stevens is planning to construct a multimillion-dollar hotel-casino, downtown’s first new resort built from the ground-up in almost 40 years. Stevens plans to unveil more details about the site on Jan. 10.

In the interim, Jossel and Stevens stood and watched as the Fremont Street Experience bustled with visitors in town for the National Finals Rodeo. The Experience’s seven-block-long canopied entertainment district opened in 1995, boasts the world’s largest video screen, and annually welcomes an estimated 22 million guests.

“I’ve been saying that Main Street is going to be the epicenter of downtown,” said Jossel, the Plaza’s chief executive since 2015. The Plaza completed a casino renovation this year and is beginning the process of remodeling its 1,000 hotel rooms, which were last changed out in 2011. “What Derek is doing over there, the evolution of the Plaza, what’s happening in the Arts District, the (city’s) development I think you’re going to see Main Street get better and better.”

By 2021, Jossel said the Plaza will launch a redevelopment plan for its 17 acres, including revamping the one-acre site currently occupied by the Greyhound Bus Terminal. Greyhound will vacate the space.

Other potential changes to downtown are brewing. Boyd Gaming Corp., which owns three downtown hotel-casinos, received approval from the Las Vegas City Council last month to proceed with a hotel tower expansion at Fremont Hotel and Casino, which now has 447 rooms.

The Stratosphere, located on Las Vegas Boulevard at the entrance to downtown, is spending $140 million over three years to upgrade its hotel rooms, change out restaurants, and refresh the casino floor, which includes opening a remodeled race and sports book early next year.

Murmurings about other properties’ potential changes are, to this point, still rumors. But those rumors are simmering.

Developments on the west end of Fremont Street please El Cortez CEO Kenny Epstein. The historic 375-room hotel-casino sits on the far east end of Fremont Street, surrounded by the restaurants, bars and clubs created by Zappos CEO Tony Hsieh’s Downtown Project.

“Anything that is good for downtown Las Vegas is good for us,” Epstein said, adding that the El Cortez has benefited from the redevelopment of motel rooms and apartment buildings and the construction of high-rise condominium towers in the downtown area.

“Whatever Derek and Jonathan do on their end of Fremont helps everyone on Fremont, because it brings more visitors,” Epstein said.

Gaming Revival

Downtown Las Vegas has seen signs of rebirth in the last few years.

The tough economic climate ushered in by the Great Recession sent the market spiraling downward from 2008 to 2013. The last four years, however, have seen gaming revenues steadily increase, including 2017’s 11.8 percent surge. Through the first 10 months of 2018, downtown gaming revenues are up a further 1 percent, according to the Nevada Gaming Control Board.

The area has suffered and prospered through ebbs and flows. The high point was 1992, when downtown’s 30 reporting locations produced a record $703 million in gaming revenue.

Since then, consolidation and redevelopment has reduced the number of downtown locations to 19, as of last year.

Fremont Street Experience

Jossel said the 2018 numbers for downtown will be skewed because of the closure of the Lucky Dragon in February. The boutique Asian-themed hotel-casino was open for less than 14 months.

The Golden Nugget was the location of downtown’s last major renovation project, a $320 million multi-phased expansion completed in 2009 that included a new 500-room hotel tower. The Nugget is currently downtown’s largest resort, with more than 2,400 rooms.

Other changes in the market have included several non-gaming attractions.

Stevens acquired the shuttered Clark County Courthouse in 2014 for $10 million and promptly demolished the building. On the site, he created the Downtown Events Center, a three-acre open-air space that has hosted concerts, sporting events and watch parties for Vegas Golden Knights and Oakland (soon to be Las Vegas) Raiders games.

He also improved gaming space and restaurants at the Golden Gate.

Plaza Plans

The Plaza’s 17 acres represents downtown’s largest single-property footprint, which currently includes roughly 10 unused acres. In the development interim, Jossel convinced the casino’s ownership, London-based Tamares Group, to build an equestrian center and multi-purpose facility with two arenas that could host other activities.

During the NFR, all 200 equine stalls were rented. Following the NFR, the arena will be used for smaller rodeos and similar events.

While it’s dubbed a permanent facility, Jossel said operating the arena is not a long-term goal for the Plaza. The space will part of the property’s future expansion once Greyhound departs.

“It’s a great fit for the Plaza,” he said. “We can use it for different events, outdoor volleyball or BMX racing. In our view, it didn’t make any sense to try anything long-term with the site while Greyhound is there.”

But the Plaza hasn’t been silent. This year, the property’s 27,000 square feet of convention space was remodeled, its bingo room was upgraded, the casino floor was enhanced with new carpeting and additional slot machines, a gym for hotel guests was placed in the space that once held the Amtrak train station, and the pool deck was refurbished.

Jossel said the Plaza has pursued partnerships to bring additional visitors to the property and downtown, including serving as the official hotel sponsor of the Las Vegas Lights USL soccer team.

Changes to the property made in 2015 and this year have kept the Plaza’s longtime customer base engaged. Many of the Plaza’s visitors come from the Midwest, California and Hawaii.

“What we’ve been able to prove over the last three years has justified the investment in the property,” Jossel said. “We will continue to add to the guest experience.”

Stevens’ plans

To make way for his planned 777-room hotel and 117,000-square foot casino, Stevens cleared the site that once housed the shuttered Las Vegas Club, the small Mermaids casino and the Glitter Gulch strip club.

During this year’s Global Gaming Expo, Stevens said his focus has been on design and financing. New details will be released as part of Las Vegas Mayor Carolyn Goodman’s State of the City address next month.

“With Derek building more rooms, I expect he will add convention space (as well),” Jossel said. “That will continue to bring people downtown, which is good for all of us.”

El Cortez’s Epstein echoed those sentiments. He said the market suffered a drop-off in business when Binion’s closed its hotel tower a few years ago and the Plaza’s hotel rooms shut down for several months during the 2011 remodel.

“More rooms means more people downtown,” Epstein said.

On his company’s third quarter earnings call in October, Boyd Gaming CEO Keith Smith said he was a “big fan” of Stevens’ project, adding “it’s great for the market.”

However, Boyd Gaming is not ready to jump into a hotel expansion at the Fremont.

“We are closely examining that option, given the strong performance of the downtown market in recent years,” company spokesman David Strow said in an email. “However, we haven’t made any final decisions on when or if we will actually move forward.”

Ex-Mayor Goodman is a downtown cheerleader

During his final term as Las Vegas mayor, Oscar Goodman once said the Plaza should be demolished, in order to create an open gateway from planned development west of the site into the Fremont Street Experience.

The plans never came to fruition, the Plaza was remodeled and is prospering, and the story is now part of Goodman’s banter between him and Jossel when the ex-mayor tells stories during his regular “Oscar Dinner Series” at the restaurant.

“I’m glad they didn’t take my advice,” Goodman said. “Downtown has a great future.”

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.