Tuesday, Feb. 10, 1998 | 10:09 a.m.
The Reserve, which opens at 10 p.m. tonight, is quite small in comparison to other area resorts. But in terms of growth potential, it fits right in to the Henderson market.
"We have the flexibility to expand, and we have the land," said John Spina, executive vice president of operations at Ameristar Casinos, the publicly traded corporation behind the $125 million, 224-room African-themed casino.
While the intimate jungle-motif resort, with only 37,000 square feet of casino space and parking spaces for 1,500 cars, takes up only a few acres at the corner of Lake Mead and U.S. 95, Spina explained the corporation owns 28 acres surrounding the resort and has an option to purchase an additional 20 more.
Spina said the 10-story resort, easily recognizable by the 80-foot-tall elephant tusks marking the entrance, was designed as the first phase of what could be easily expanded into a much bigger casino.
But, he said Ameristar has a conservative philosophy about development of the Henderson market, and the corporation wants to build a solid customer base among locals before it decides whether to expand.
Still, Spina is optimistic about the future of The Reserve.
"This is a very fast growing area, and we are are value driven for locals, and so we expect to do very well here," Spina said.
Ameristar, a relatively small gaming company, which operates Cactus Pete's and the Horseshu in Jackpot as well as small casinos in Iowa and Mississippi, is counting on explosive residential growth in the Henderson market to drive foot-traffic through the glass front doors of the company's newest property.
Henderson's population grew by nearly 90 percent from 1990-1996, which makes the city of 150,000 residents the nation's fastest growing among communities with a population of more than 100,000, according to the U.S. Census Bureau.
"The market is certainly there. I don't know how profitable they are, but they will certainly fill a niche," said Bill Schmidt, gaming analyst with Gerard Klauer Mattison & Co.
"We've done our homework. We did a lot of due diligence before we jumped into this deal," said Spina, who's company also has enjoyed healthy growth in recent years.
Ameristar, which has opened a property every two years since 1991, has enjoyed a nearly 300 percent growth in gross revenues and assets from 1993-1996. Gross revenues increased from $55 million in 1993 to $188.4 million in 1996, and through the first three quarters of 1997, the company posted $155.6 million in net revenue, an increase of 9 percent over the previous year.
Thomas M. Steinbauer, chief financial officer, explained that some of the construction costs of the Reserve have been funded by cash flow from Ameristar's other properties, and the remainder is financed through bank loans at just under 9 percent and corporate notes at 10.5 percent.
He explained that in comparison with other area hotels, the debt service of The Reserve is "extremely low."
"We own everything including the land, unlike some of our competitors that lease the land," said Steinbauer.
Despite the recent growth of Ameristar and the thrifty financing package behind the Reserve, stock in the company has declined from a one-time high of $13.50 a share to just over $6 at Monday's close due in part to uncertainties surrounding its acquisition of Gem Gaming, original developer of The Reserve.
A merger dispute between Ameristar and Gem temporarily halted construction of the casino a year ago, delaying the opening by several months.
The dispute began in January 1997, when the state Gaming Commission denied applications for gaming licenses by Steven Rebeil and Dominic Magliarditi, former stockholders of Gem after citing "overwhelming" evidence of a credit scam at Rebeil's Gem Homes development company.
Later, Ameristar accused Rebeil and Magliarditi of violating the merger agreement and interfering with efforts to finance the project. The dispute finally ended in May 1997 when Ameristar agreed to make installment payments of $32.65 million plus interest to the Gem stockholders.
Spina said Ameristar took advantage of the delay to redesign and improve The Reserve.
Designer Henry Conversano, who worked on the award-winning Lost City project in South Africa, has weaved Serengeti grasslands and Congo rain forests into the decor and added a sound system capable of replicating the flight of birds, the roar of prowling lions and the thunder of moving rainstorms throughout the high-ceilinged gaming and dining areas.
Besides the seven-station Grand Safari Buffet, the Reserve features three diverse restaurants including Congo Jack's Cafe, named after the fictional pilot -- a sort of Indiana Jones -- whose story and wrecked plane serves as the centerpiece of the casino.
Congo Jack, the story goes, was nursed back to health by Monsoon Mary, the fictional proprietor one of the casino's three lounges. No doubt, the two fell in love over a romantic dinner at the resort's Wildfire Steaks & Seafood -- this being Valentine's week.
The casino area of The Reserve is packed with 26 table games. Locals will find the low minimums ($1 craps and $3 blackjack) appealing as well as single- and double-deck 21. Let It Ride, Caribbean Stud and Pai Gow Poker also is offered.
The Reserve also has 1,435 slot machines, only half as many as competitor Sunset Station, but Spina said numbers of slots aren't everything.
"We have the most technologically advanced slot club in the Valley," said Spina, who explained that qualifying members of The Reserve Slot Club can order comps such as meal and room discounts simply by touching a screen on the slot machine.
"It's more convenient for the customer," Spina said. "You don't have to ask a host. You don't have to get in line."
More than 1,000 employees have been hired at The Reserve, boosting Ameristar's current employment base of 2,600.