Thursday, Nov. 9, 2017 | 2 a.m.
The company that owns Bronco Billy's resort in Cripple Creek, Colo., announced plans on Monday to build a 150-room upscale hotel connected to the gaming hall, creating one of the top-rated lodging properties in the Colorado Springs area.
Daniel Lee, CEO of Las Vegas-based Full House Resorts, which bought Bronco Billy's in May 2016, said the hotel would cost $60 million to $70 million to build and open in two or three years on property the company has options to buy for about $13 million. The project includes a hotel with a top-rated restaurant, meeting and event space with a capacity of 500 people, a 400-space parking garage and a courtyard that would be built north and west of Bronco Billy's. Lee said the hotel would not be part of a major chain and rooms would cost an average of $200 a night.
"We paid $30 million for Bronco Billy's (in 2016) and that was just the start. We began planning for this project almost immediately," Lee said. "We will be bringing a different level of customer to Cripple Creek. Right now, we make about $5 million a year in income from Bronco Billy's and the entire city generates $20 million. The Ameristar in Black Hawk makes $70 million and Black Hawk makes $200 million. If we have a nice hotel, I believe we will get a good return on our investment and create a renaissance so others will also build hotels and we will see a synergy develop."
Before construction can begin by year's end, Full House must secure approval from the Cripple Creek City Council. The company also wants approval to demolish a small house and another building — both more than 100 years old — now being used for casino maintenance operations.
The six-story hotel, when combined with 24 rooms Bronco Billy's already operates, would make Full House the biggest hotel operator in Cripple Creek. The 158-room Double Eagle Hotel and Casino is now the city's largest. Three other casino operators also are planning hotel projects, though Century Casinos Inc. put plans on hold in May to convert and expand the historic and long-vacant Palace Hotel in Cripple Creek into a 30-room boutique hotel. American Gaming Group LLC and Triple Crown Casinos each had plans last year to build 100-room hotels; officials with the companies were unavailable Monday to update those plans.
As part of the land and other properties Full House has under option or bought, the company is acquiring the historic Imperial Hotel and casino and plans to reopen the 12-room hotel and casino as soon as this summer, Lee said. The Imperial complex last housed Big Jim's Gambling Hall and Saloon, a casino that closed in 2014 and had later been converted into a bed and breakfast operation. The hotel had hosted summer melodrama performances from 1948 until the mid-1990s, when it was acquired by investors and converted into a casino that operated until 2010.
Bronco Billy's, one of two surviving casinos in Cripple Creek that opened when gaming was legalized in 1991, is a complex that includes three casinos with more than 800 slot and video poker machines, poker, blackjack, craps and roulette tables, the 24-room hotel, steakhouse, several other restaurants, an outdoor amphitheater and several parking lots. Full House, which also operates casinos in Indiana, Mississippi and Nevada, made the hotel announcement in advance of releasing its third-quarter financial results Tuesday afternoon.
"We believe that the Colorado Front Range, and particularly the southern part of such area, has tremendous growth potential," Lee said Monday in a news release about the hotel project, noting the strong growth of the area's economy. "The gaming spend per capita today in the region is significantly below the national average and far below other markets with similar demographics and geography. We think that reflects the lack of non-gaming amenities being offered. Cripple Creek has approximately 500 guest rooms and many of those are of mediocre quality."
Lee said Full House is planning to build the hotel to a quality level that would earn it a four-diamond ranking from AAA or a four-star ranking from Forbes magazine, and a restaurant that would be the first in Colorado to earn at least a one-star rating from the Michelin Guide of the world's top dining establishments.
He believes the Colorado Springs area from which Bronco Billy's and Cripple Creek's other casinos draw most of their customers is ready to support an upscale hotel and restaurant similar to the way the 530-room Ameristar Casino Resort Spa in Black Hawk expanded the market in the Central City-Black Hawk gaming district. Voter approval in 2009 to increase the betting limits in the state from $5 to $100 has paved the way for gaming companies to spend hundreds of millions of dollars building bigger and more elaborate casinos to draw upscale customers, he said.
"Since the higher limits, gaming revenue has increased 20 percent in Black Hawk and declined 5 percent in Cripple Creek, and Black Hawk has even started to draw customers from Colorado Springs because of better amenities. While Cripple Creek is nice, it doesn't have any hotels with a 24-hour front desk, hot tubs or fine-dining restaurants," Lee said. "There was no reason to build a nice hotel and restaurant to give away rooms and meals if people gamble enough when the limit was $5. All of that changes when the maximum bet increased to $100."
