Friday, June 6, 1997 | 5:47 a.m.
Forget what you know about Station Casinos.
Its new resort is going to surprise you.
"You could put Sunset Station anywhere on the Strip and it would be a competitive casino," says gaming analyst David Anders about the company's newest property, which opens Tuesday in Henderson.
"It's so beautiful some of the prize displays, like the jet skis in one bank of slot machines, look out of character," says Anders of First Boston & Co.
"The attention to detail nearly rivals that of the inside of New York-New York. It's a great property."
With its dazzling architecture, dramatic lighting and open, airy spaces, Sunset Station represents the latest step in a gaming industry evolution emphasizing creation of a relaxing, romantic atmosphere in which to gamble, to sample the food and entertainment offerings of a full-service resort or simply to take in the sights.
The trend, pioneered by The Mirage and advanced by Strip resorts such as Treasure Island, Caesars Palace's extensive expansions, Monte Carlo and New York-New York, has raised the expectations of gaming's traditional customers and created a whole generation of new ones.
They now expect -- even demand -- more than just a big, square box in which to place bets. They want exotically themed resorts that offer a sense of adventure and intrigue, havens from the mundane, distractions from the norm.
Sunset Station won't disappoint them. From its central pit area around the spectacular Gaudi Bar to the little nooks and crannies throughout the casino to the Costa del Sol seafood restaurant replicating an undersea grotto to the patio dining amid scented lemon trees at The Capri, the new resort offers the flavor of a Southern European adventure.
In a bit of an understatement, Station Casinos executive Blake Sartini says Sunset "is a bit of a departure for us in the architectural sense."
And that's all by design, as Station Casinos' executives addressed analysts' concerns about a saturated locals market and fears that a new casino might cannibalize business at its sister property, Boulder Station.
The executives believe Sunset Station's upscale decor, coupled with the company's traditional marketing strategy, will expand the locals business.
"There's never been a new opening of a facility this magnitude in the locals market," says Sunset Station's general manager, Don Marrandino. "We know we have to grow that market, and we're very confident that this is the type of facility that can do it."
Anders agrees.
"I think they can grow the market, not only because of the residential developments that keep cropping up in that area, but also because it's such a different concept," the analyst says.
Gerard, Klauer, Mattison & Co. analyst William Schmitt thinks so, too, though he believes Sunset initially will have a "big impact" on Boulder Station's cash-flow margins.
"They've been doing extremely well at Boulder Station, but I'm looking for about a 15 percent drop in their annual run rate based on the last quarter," Schmitt says.
Boulder's cash flow -- earnings before interest, taxes, depreciation and amortization -- was $13.3 million in the last quarter or $53.2 million at an annual rate. Schmitt sees that slipping to about $45.2 million.
But he predicts Sunset Station will generate about $30 million in cash flow through fiscal 1998, which runs through next March, and add about 11 cents a share to net income.
For fiscal 1997, Station Casinos reported net income of $28.1 million, or 80 cents a share, on revenue of $584 million. Cash flow was $136.5 million.
Fourth-quarter earnings were below Wall Street's expectations, due primarily to increased expenses related to the company's new Kansas City, Mo., property and increased competition in St. Charles, Mo.
But Station Casinos' three Nevada properties -- Boulder Station, Palace Station and Texas Station -- posted sharp revenue and cash-flow gains in the quarter due to increased market penetration, reduced costs and a rise in average daily room rates.
The analysts expect Sunset -- which cost $198 million to build, excluding about $30 million of preopening costs and capitalized interest -- to enhance that performance.
"Over the long term, it's very well positioned," Schmitt says.
While it's an architectural departure, Sunset Station will continue the company's long-standing tradition of catering to residents.
"We're in the locals business and we'll stick with it," Marrandino says.
More than 70,000 people live within three miles of the new resort, which occupies 100 acres on Sunset Road west of U.S. 95. But he expects to draw customers from throughout the valley -- even if they aren't gamblers.
"We'll have entertainment that's second to none, and some of the best dining experiences available at reasonable prices," he says. "No matter what your age, you'll find something enjoyable to do here. We want to offer reasonably priced entertainment to the whole Las Vegas Valley."
Last year, Station Casinos opened a 13-screen movie theater on the site that has become the largest-grossing cineplex in the state.
The main resort includes an 80,000-square-foot casino and 22-story, 450-room hotel in the main facility. Sunset will market the hotel rooms primarily in Phoenix and Los Angeles.
The casino will include about 2,800 slot machines, 40 table games, a 208-seat race and sports book, a keno lounge, a poker room, an entertainment lounge featuring an eclectic mix of performers, and a variety of restaurants and bars, including the centerpiece Gaudi Bar, named after Spanish architect Antoni Gaudi, who eschewed right angles.
Las Vegas-based architects Morris & Brown drew from the diverse cultural influences and sunbaked climate that affect building design in such Spanish cities as Barcelona, Valencia, Seville, Segovia and Madrid to develop the intricately detailed interior decor.
But as Marrandino knows, it takes more than an attractive building to bring customers back for repeat visits.
"We've hired 1,800 employees who share our core values -- honesty, integrity, enthusiasm. We wanted to hire good people, not just good resumes, and are very happy with the result."
