Friday, July 28, 2000 | 11:17 a.m.
Just days after selling his family's Fiesta hotel-casino to Station Casinos Inc., Fiesta President George Maloof said he has struck a deal to bring Station into the family's long-awaited resort project near the Las Vegas Strip on Flamingo Road.
On Thursday Maloof said Station and the Greenspun Corp. have agreed to each purchase a 6 percent stake in the hotel-casino, which is as yet unnamed. Construction of the first phase of the $255 million resort started Monday and is targeted for completion in late 2001.
Once complete, Maloof said, the resort will be starkly different from the Fiesta. The family envisions a 2,000-room resort at the 30-acre site near the Rio hotel-casino, with a tower soaring 40 stories from Flamingo Road. By comparison, the multicolored main Rio tower is 41 stories.
"We wanted to make sure to create an icon, something that can be seen from the Strip and I-15," Maloof said. "Most of its influence will be from the desert, kind of the Palm Springs kind of influence, maybe with a California coastal feel.
"It'll have some uniqueness to it. It'll be fun, really cool."
The hotel will open with 470 rooms, but will eventually have 2,000 rooms and two towers, Maloof said. Unlike most gaming projects, Maloof plans to build the project with virtually no debt financing.
Though Station will now join the project, both Maloof and Station emphasized the Maloof family will remain in charge.
"George is driving the bus," said Glenn Christenson, chief financial officer of Station. "He'll be responsible for the day-to-day operations. We're just a minority owner."
Station's involvement, Christenson said, will be "to the extent George wants our input."
The deal came together while the Maloofs were in talks with Station to sell their popular North Las Vegas casino to Station for $185 million.
Maloof said it wasn't necessary to secure additional financing for the project, which had already been arranged. But Maloof said the family wanted to bring the Greenspun family into the deal. The Greenspuns own the Las Vegas Sun.
"When we got together, we really had the Fiesta sale in mind, and this kind of evolved," Maloof said. "We've always wanted to do something with the Greenspun family. I had called Brian (Greenspun, chief executive of Greenspun Corp.), and asked him if he wanted to get involved in our project on Flamingo. He wasn't in the gaming business, and said he would like to get Station involved.
"I had a lot of respect for (Station), so we started talking about doing some things. That kind of led to this partnership."
For Station and the Greenspuns, the Flamingo project will be their third gaming partnership. The two are partners in Barley's, a Green Valley neighborhood casino, and have previously announced plans to jointly build an upscale, $260 million hotel-casino in nearby Green Valley Ranch.
"My family has had a very good long-term business relationship with the Station organization and the Fertitta family," Greenspun said. "We are excited to co-invest again with Station in the Maloof project on Flamingo. We are also happy to have a new partnership and friendship with the Maloof family, who have not only demonstrated their strong business acumen but also their commitment to making Las Vegas a better community."
Though it's a small investment by his company's standards, Christenson also expressed excitement about the deal.
"We think it's a great project in a terrific location," Christenson said. "We're very excited to be a part of George's project. It further demonstrates our commitment to the Las Vegas market."
For all three partners, the project will bring a new focus -- the tourist market of the Strip, as opposed to the locals focus of Station and the Fiesta.
But a purely local project wouldn't work so close to the Strip, Maloof said.
"We couldn't put another Fiesta there because of its proximity to the Strip," Maloof said. "We go after both (tourists and locals) right away. I want locals to come first, and tourists will eventually come."
"People will appreciate the attention and the fact they're still near the Strip, but off the Strip. We're not going to be the lowest priced, but we're not going to be the highest priced. We'll appeal to everybody."
The Aladdin resort opening next month marks the end of a period of huge expansion in room capacity since late 1998 on the Strip that included the Bellagio, Venetian, Paris and Mandalay Bay resorts.
The Maloof casino will be part of a new wave of expansion on and around the Strip that will likely include Steve Wynn's resort at the Desert Inn site and MGM MIRAGE's development of the Boardwalk site.
In addition to their gaming holdings, the Maloof family oversees a business empire with holdings in Nevada, New Mexico, Utah and Colorado.
The Maloof Cos. of Albuquerque, N.M., hold the exclusive distributorship for Coors beer in New Mexico, and the family holds a minority stake in Salt Lake City-based First Security Corp., now in the process of being sold to Wells Fargo. The Maloofs also own a casino in Colorado.
The family is the majority owner of the NBA's Sacramento Kings, as well as Sacramento's Arco Arena.