Las Vegas Sun

March 28, 2024

Skeptics doubt viability of San Francisco-themed resort

There's skepticism along the Strip about the City by the Bay.

Several Las Vegas gaming executives are privately expressing doubts that the former music-video producer who conceived of New York-New York will be able to duplicate that success with his plans to build a city-themed resort modeled after San Francisco.

But idea man Mark Advent insists his plans for the proposed $500 million, 2,000-room hotel-casino featuring scaled-down replicas of San Francisco landmarks are on track and that he'll disclose the location and joint venture partner within 90 days.

Fears of supposed market saturation and concerns about capital availability aren't the only reasons for gaming industry skepticism about the project, which was announced to selected news organizations last week.

Instead, Advent's bid for a 20 percent stake in the venture, a reported $9 million-per-acre asking price for the Strip land earmarked for the resort and the threat of potential trademark lawsuits have some gaming executives betting hill-scaling cablecars won't displace dice-table boxcars as Las Vegas staples anytime soon.

Advent says those aren't insurmountable problems, that he's flexible enough to change the deal and the design to suit the circumstances. In fact, he says the original reports inaccurately portrayed the project.

"If you like New York-New York, you're going to love the San Francisco Hotel & Casino," he told a San Francisco newspaper. "It's going to raise the bar even further."

The story said Advent proposed a hotel with nine towers, some rising as high as 70 stories, replicating the most famous buildings of the San Francisco skyline. A casino with 80 tables and 2,500 slot machines, restaurants and retail shopping would be accessed through an entryway shaped like the Golden Gate Bridge.

Advent told the newspaper he was evaluating three sites in Las Vegas and soon would announce the identity of the major backer.

"The gaming community will be pleased and surprised with who we are bringing to the table," Advent told the paper.

One gaming operator Advent approached -- Harveys Casino Resorts Inc. -- backed away from the deal.

"We looked at it. We were interested. Now there's no agreement," Harveys spokesman Jim Rafferty told the newspaper. He declined to elaborate.

But information obtained from several sources who requested anonymity shed light on possible reasons for Harveys' reluctance to go along with the deal.

"Harveys wanted to do this deal badly because they're being pushed out of the Hard Rock and want to be on the Strip," says one casino executive. The company owns 40 percent of the 350-room off-Strip resort and receives a fee for managing it. But relations with majority owner Peter Morton have been, well, rocky.

Costly concept

"Mark has shopped it all over town, and, I have to say, the renderings are very beautiful," says another gaming exec. "But one of the biggest problems is that he wants to keep 20 percent of the deal rather than sell the concept."

That's a big jump from Advent's compensation for the New York-New York concept. Sources say he sold the idea for New York-New York to a joint-venture partnership of Primadonna Resorts Inc. and MGM Grand Inc. for a reported $4 million to $5 million. Advent says he merely licensed the concept, but won't disclose figures.

The two joint-venture partners built a spectacular $460 million resort featuring scaled-down versions of New York City landmarks that has generated the highest cash-flow margins of any new megaresort in Nevada history since opening in January.

But retaining a 20 percent stake in a $500 million resort would equate to a $100 million payoff simply for an idea. That's a tough sell to investors who'd bankroll the resort, the skeptics say.

Advent says the 20 percent figure is flexible.

"I'm a reasonable guy who is interested in building the project and there's lots of ways to structure deals that work," he says. "I'm keeping my options open.

"I'm not out on the Strip shopping the project with one set of numbers in mind. I'm also prepared to invest my own money in the project as an equity participant."

Copyright issue

Another stumbling block was that the design presented to Harveys depicted a skyline incorporating the most recognized skyscraper in San Francisco -- the Transamerica Tower.

A spokesman says Advent contacted the owner, insurance giant Transamerica Corp., seeking the right to incorporate a smaller version of the tower in the new resort, but that company lawyers oppose the idea.

Advent says the Transamerica issue isn't dead, though he has an alternative if the company declines to allow a tower replica in the hotel-casino.

"I've had discussions with Transamerica, and they are continuing," he says. "Their tower is a symbol of their company and is not in the public domain. Anyone would be foolish to try to replicate the building without their permission. I'm very respective of their copyrights and trademarks.

"But San Francisco is such a sensational theme for any high-concept project that you can create a property without the Transamerica building because the city has such a rich architectural heritage.

"I've got a whole new set of plans with a whole different approach. It's completely different from the skyline approach."

When Advent approached Harveys, he proposed building the project on 11.5 acres next to the Jockey Club on the Strip about midway between Flamingo Road and Tropicana Avenue.

Expensive land

Sources say landowner A. Robert Zeff, a Detroit-based personal injury lawyer who also owns a greyhound track in Bridgeport, Conn., is asking $9 million an acre for the site. The same sources say Harveys offered $80 million for the 11.5 acres, but balked at paying more than $100 million for the parcel.

Advent says the figures are wrong, but won't provide the actual numbers because of "fiduciary obligations." Zeff says he "will not comment on the situation," and Harveys declined to elaborate on its earlier statements.

But if the figures are right, they represent a big increase in what to date is the highest price paid for Strip property -- the reported $6.5 million an acre for a small parcel between New York-New York and the Monte Carlo a few months ago.

With Harveys apparently out of the picture, Advent says his confidence in the project remains strong.

"There were a lot of gaming companies that passed on New York-New York before Gary Primm (chairman of Primadonna Resorts) recognized that it was a great concept," he says. "And he did a marvelous job executing it.

"Selling that was an uphill struggle. But the great thing about Las Vegas is the worldwide interest it generates.

"There are a lot of substantial companies in the world that, given the right opportunity, could make a meaningful and substantial investment in a Las Vegas casino venture."

He says he's talking with several potential partners, some from "outside the gaming industry."

His design-development company, the Advent Group, is pressing ahead with plans for the San Francisco and has retained Thalden Entertainment Architects of Las Vegas to develop several alternative plans for the hotel-casino.

"For 10 years running, Conde Nast magazine readers have said San Francisco is the most beloved city in the world, with an ambiance like no other. This is a concept that will work," Advent says.

Available to all

Though he complains that the earlier news stories were "leaked" prematurely, Advent says he's unconcerned about possible competition and convinced that, if such a project is built, he'll be part of it.

"I don't believe any responsible, respectable company would at this point step up and offer a similar plan," he says.

Perhaps not. But others aren't as convinced. Joel Bergman is a former Mirage Resorts Inc. architect and designer whose last project for that company was Treasure Island.

"Aside from personal ego, none of these city-themed concepts are proprietary," says Bergman, whose Bergman, Wall & Youngblood firm is designing the Paris-themed resort for Hilton Hotels Corp. next to Bally's.

"What you actually do with the concept may have some intellectual value, but do Gaugin's relatives own the South Seas?" he asks, referring to the French 19th century painter noted for renderings of Tahiti and other exotic locales.

"Intellectual property rights is a complicated area of the law," says Advent. "It's not something that's taught in architectural school and I'd say 99 percent of all the architects working in America don't understand it.

"I like to believe I had a role in raising the consciousness of designers and architects and gaming companies as it relates to the dynamics and potential of theming a property after a city.

"Caesars Palace was the first to incorporate a location theme with its Roman design, but it wasn't a complete interior-exterior application.

"Luxor took the next step, but it was more of an architectural icon. It was a pyramid, not the city of Cairo."

The Circus Circus Enterprises Inc. resort replicated architecture from the ancient southern Egyptian area near Luxor, which lies along the Nile River and was the burial site for several pharaohs.

"After New York-New York," Advent says, "came Bally's plan for Paris and Sheldon Adelson's Venetian project, which is based on Venice.

"But it really wasn't until New York-New York came along that it raised the consciousness of designers and the gaming community. And because of that, some of the steps I've pursued would be in protecting all the intellectual property as much as I can.

"There's only so much you can do. But I can tell you this, no one else can build a hotel called the 'San Francisco Hotel & Casino' because I own the rights to it."

archive