Friday, June 15, 2001 | 10:54 a.m.
Hilton Hotels Corp., once one of the biggest players in the Las Vegas casino market, broke ground Thursday on its latest venture in the city -- a 1,500-unit timeshare complex that will rise 33 stories over the north end of the Strip.
The project, formally announced in January, will be Hilton's third timeshare project in the city, joining far smaller developments at the Flamingo Las Vegas and the Las Vegas Hilton. The first phase of 350 units will open in 18 months and cost $111 million. It will be followed by a gradual build-out to 1,500 units over the next decade.
"This will be one of the largest vacation projects in the world," said Antoine Dagot, chief executive of Hilton Grand Vacations Co., the Hilton timeshare subsidiary. "This will set a new benchmark for our industry."
The project is just north of the Circus Circus hotel-casino, on a now-vacant 10-acre land parcel near Sahara Avenue and the Las Vegas Strip. To the north lies a 39-acre vacant lot, now being marketed for sale by Sahara hotel-casino owner Bill Bennett.
Stephen Bollenbach, chief executive of Hilton, called the project a key event in the quest to redevelop the north end of the Strip. The only recent new project north of Spring Mountain Road has been the Stratosphere, though Desert Inn owner Steve Wynn is drawing up plans to build a billion-dollar-plus resort at the site of that shuttered property.
"We can be a leader in revitalizing this part of the Strip," Bollenbach said. "I think this will play a big part in continuing development."
There is vacant land available near the Las Vegas Hilton, but Bollenbach said the Strip site was more attractive. "We think our customers would like to be on the Strip, and we think this is a very good piece of property," he said.
Bollenbach also said Hilton remains interested in expanding its share of the non-gambling hotel market in Las Vegas, primarily through smaller hotels under such brand names as Embassy Suites, Hampton Inn and Hilton Garden Inn. The company now operates six such hotels in the area -- a Doubletree, two Embassy Suites and three Hampton Inns, including one that opened just two months ago in Henderson.
"It's a great market, the fastest-growing in the U.S.," Bollenbach said.
Bollenbach also believes his company's latest venture will benefit Park Place Entertainment Corp., the world's largest gaming company that was spun off by Hilton in 1998.
In Las Vegas, Park Place owns the Las Vegas Hilton, Flamingo, Caesars Palace, Bally's and Paris resorts.
"One of the benefits of working closely with Park Place is they allow us to sell (timeshares) in their casinos," said Bollenbach, who is Park Place's chairman. "It's a great place to sell. And we encourage our guests to use Park Place properties for gaming, restaurants and entertainment. It's a good relationship for us."
The two companies still maintain tight relations -- besides Bollenbach, three other Park Place directors also serve on Hilton's 10-member board, including Hilton Chairman William Barron Hilton, Vice Chairman Eric Hilton and board member A. Steven Crown.
Since the death of former Chief Executive Arthur Goldberg last year and the ascension of former Hilton general counsel Tom Gallagher to the top post at Park Place, there's been growing talk that Hilton has been trying to strengthen its influence over Park Place. In April Forbes magazine reported that pressure from Hilton kept Park Place from re-marketing the Las Vegas Hilton after a sale to Ed Roski Jr. fell through and that two board members weren't re-nominated to the board because of their tight ties to Goldberg. Roski repeated some of these allegations in an April court filing, in which he named Hilton Hotels as a co-defendant.
Bollenbach denied there has been any move to increase Hilton's influence over Park Place, saying there's been no change in the relationship between the companies, and that Park Place alone made the decision to keep the Las Vegas Hilton. "Grassy knoll theories," he calls such talk.
"They (the rumors) are not true ... that's about all you can say about it," Bollenbach said. "When we find opportunities to work together, we do that, as we do with other public companies."
Bollenbach said Hilton Hotels is through with the gaming industry, and that he's convinced there's little synergy to be had by combining a hotelier with a casino operator.
As a result, there's no chance the two companies will ever become one again, Bollenbach said.
"We want to a great deal of trouble to separate the companies ... we have no intent to put them back together again," Bollenbach said. "(The separation) really does create shareholder value. You don't have to buy both (gaming and hotels) in the same package."