Friday, Dec. 13, 1996 | 11:59 a.m.
Beginning 7 p.m. Wednesday the succulent aroma of steaming crawfish and simmering jambalaya will fill the French Corner of Southwest Las Vegas. This is when the doors of Orleans open.
The $173 million 840-room property, developed by Coast Resorts, owners of the Barbary and Gold Coast hotels, is located on an 88-acre site on Tropicana Avenue and Arville Street.
In some ways, the Orleans is similar to the Gold Coast. The southwest Las Vegas location of the Orleans, the expected mix of locals and tourists, and a recreational package that includes a country and western showroom, a 70-lane bowling center and several restaurants, are reminiscent of Coast's flagship property.
But in many ways, the Orleans is different from anything Coast Resort major shareholders Michael Gaughan, Tito Tiberti, Jerry Herbst and Frank Toti have ever before attempted.
"It's much bigger than the Gold Coast," Gaughan said. "It has 100 more rooms than the Gold Coast (which has 711 rooms) and it's a little more upscale in decor."
The last remark is vintage understatement from the 53-year-old casino executive who got his start in the casino business 40 years ago working as a busboy for the Flamingo Hotel, when it was partly owned by his father, Jackie Gaughan.
Everything about the Orleans from the lattice work above many of the booths in the 344-seat French Market buffet to the hand-carved door frames and ceiling trim throughout the property signifies attention to detail and painstaking effort to re-create the feeling of a Bourbon Street setting.
"The wedding chapel wall scones, the chandeliers in the convention space, the mill work and even the wallpaper have been designed to give the visitor the flavor of New Orleans," said David Ross, director of hotel operations.
And Coast executives also are doing their best to capture the feeling of Bourbon Street crowds during Mardi Gras by substantially lowering $69-$89 room rates the first week of operation -- in a package deal of $39 for two nights.
Industry pundits note this is a savvy move by Coast executives to ensure a packed house during the Christmas season opening -- a notoriously slow time in the casino business.
Once inside the ornately designed front doors, guests will find a virtual Cajun cornucopia of amenities to take up their time and their vacation dollars, including:
* A French Quarter-styled facade towering a full five stories above the gaming tables in the 92,000-square-foot casino, which designer Charles Silverman said was conceived to give the casino area an open and outdoor feeling and to make the guest feel as though "he is literally wandering around in downtown New Orleans."
* Oversized rooms with couches and stuffed chairs and wall pastels of New Orleans river scenes.
* Six different restaurants where patrons will dine on everything from jambalaya and crawfish to steaks, lobster and Italian delicacies. The resort also features three island-style bars with screens for televised sporting events.
* The 999-seat Branson Theatre where country star Rex Allen Jr. will perform. Allen has appeared on the Nashville Network television program "Yesteryears."
* A cathedral-styled Chapel Orleans with 7,400 square feet, seating for as many as 450 guests and features that include four separate bride and groom dressing rooms.
* Four second-floor convention areas totalling 40,000 square feet, and equipped with kitchens, audio-visual facilities and separate fax and copy rooms.
But will all these amenities cause the Orleans to cannibalize the Gold Coast?
Executives say that initially the Orleans will cost the Gold Coast some business, but this will be temporary, and eventually both properties will stand on their own.
"There's no question about it that there will be some crossovers," said partner Tiberti, president of J.A. Tiberti Construction, who met Gaughan when they were elementary school students at St. Joseph's Catholic School.
"But I think that 85 percent of these folks will eventually go back to the place that they feel comfortable with," Tiberti said.
Will the new property -- Coast Resorts' most ambitious undertaking -- work?
"Why not?" industry analysts ask rhetorically. Everything else Gaughan and his partners have done in the past have turned out very well.
"The partners in Coast Resorts have proven that they can generate very high levels of profitability," said Jason Ader, senior casino analyst at Bear Sterns & Co. in New York City.
"They (partners in Coast Resorts) certainly are in good shape," said Joe Milanowski, gaming analyst for USA Capital in Las Vegas, who explained that Gaughan and the other general partners who own both the Barbary Coast and Gold Coast a year ago merged the two hotels into one corporation.
The merger made for a stronger company, Milanowski said, and stronger companies are able to secure lower interest rates when financing new developments.
Indeed, for the nine months that ended Sept. 30, Coast Resort's net revenues increased 10.9 percent to nearly $142 million, compared with the same period in 1995. During that time, gaming revenues increased nearly 15 percent from $94 million to $107 million.
With numbers like these, gaming analysts believe that Coast Resorts should have no trouble coming up with the $20 million in interest needed each year to pay off the $175 million in 13 percent first mortgage notes that financed the Orleans.
By comparison, Milanowski pointed out, the Stratosphere hotel-casino -- which is teetering on bankruptcy -- was financed at 17 percent.
"And the Stratosphere doesn't have other operating properties (to help cover the debt)," Milanowski said.
But will the Orleans be able to compete with several other new casino projects planned in the next decade such as New York-New York with 2,035 rooms and the Planet Hollywood-ITT Corp. Strip project with 3,200 rooms?
And if this isn't enough competition, Orleans will also be up against several other planned mega-theme resorts including a 6,000-room Venetian-styled hotel-casino with canals and gondolas at the site of the former Sands Hotel, and Paris and Bellagio, each planned for 3,000 rooms.
Milanowski said he believes Orleans still will be able to attract visitors to southwest Las Vegas.
"Prior to 1994, occupancy rates averaged 85 percent, Milanowski said. "And after all the recent construction, occupancy rates have gone up to 90 percent. It just means they're building to demand."
If Orleans is a success, gaming analysts said it probably won't be long before Coast Resorts goes public, which will enable the corporation to secure more financing for future planned projects such as Sundance, to be built in the Peccole Ranch area at the west end of the Las Vegas Valley. Groundbreaking is scheduled as early as next summer.
Not surprisingly, partners at Coast Resorts won't say for sure whether they plan to go public.
"That's one of our options," Gaughan said.
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