Maloof denies expansion report

By Liz Benston

Wednesday, June 25, 2003 | 11:27 a.m.

The owner of the Palms casino resort in Las Vegas is denying assertions in a magazine article and by a Wall Street analyst that he has decided to build a second room tower at the property.

A Wall Street source familiar with the proposed expansion told the Las Vegas Sun that architectural plans have been drawn up for the tower, which would add rooms to the rear of the 42-story resort facing Flamingo Road near Interstate 15.

Also, an article in this month's Chicago magazine on restaurateurs Michael Morton and Scott DeGraff -- creators of the Palms' Nine steakhouse and ghostbar lounge -- says the pair are developing two more spots for the second tower, including an Italian/Mediterranean restaurant.

Owner George Maloof today said he hasn't decided on whether to build the tower.

"That's incorrect information," Maloof said of the plans. "We've master-planned the whole property ... but I haven't spent time to figure it out yet. And that's the honest to God truth."

The Wall Street source says he's heard construction on the tower is expected to start in the third quarter.

The privately held resort, which opened in December 2001, has relatively few rooms (470) given the amount of casino traffic and nightlife the property has generated.

"He opened (the Palms) as carefully and cautiously as he chose, responding to the market instead of trying to make the market come to him," said the Wall Street source, who spoke on the condition of not being identified. "Mr. Maloof has proven he understands what customers want and how to deliver that at a property."

In an interview with the Las Vegas Sun in 2000, Maloof said the resort would eventually be expanded to 2,000 rooms over the next five to 10 years.

Maloof today said the magnitude of the expansion, if it happens, hasn't been nailed down.

Locals' casino operator Station Casinos Inc. is a minority investor in the Palms, as is the Greenspun family, owner of the Las Vegas Sun.