Friday, May 4, 2001 | 10:38 a.m.
Stratosphere at a glance
Richard Brown seems to have the ability to envision a finished painting while viewing a blank canvas.
With $75 million in improvements under way at the Stratosphere hotel-casino, Brown, the company's chief operating officer, is thinking masterpiece.
"I think we need some plants over here," Brown said to Bobby Ray Harris, his senior vice president of operations, in a lobby that soon will become the new base-of-the-tower entry to the Top of the World restaurant, the marquee dining room for the property.
"This is where people will come to get on the elevator to take them up to the restaurant," Brown said. "We're looking at putting in some marble --make it really classy."
Brown, who was promoted from vice president of marketing at the Stratosphere to the top operations post for Carl Icahn's three Las Vegas casinos late last year, sees an opportunity for the resort to become what developers envisioned five years ago when the hotel-casino and its 1,149-foot tower opened to rave reviews.
The new and improved Stratosphere is working to incorporate equal measures of hipness and Vegas nostalgia as well as the class he hopes the new Top of the World lobby exudes. Some of the improvements planned over the next few months:
* A 24-story hotel tower with 1,002 new rooms. Brown said about 100 of those rooms will be suites, many with oversized spa tubs. Most of the new rooms will be ready for the July 4 holiday. Harris said 66 rooms will have perfect views down the Strip. With the addition of the new rooms, the Stratosphere will have 2,444 total at the property. Previous owners of the property had begun work on the new rooms, but that came to a halt in 1996. Construction resumed in April 2000.
* Lucky's Cafe, a 300-seat coffee shop with American food and a vintage Las Vegas '50s-style art deco decor, opens Monday at the base of the escalators leading from the parking garage to the casino. Historic Las Vegas photographs will be displayed on dark wood beneath subdued lighting. "A 24-hour cafe is something the Stratosphere has always lacked," Brown said.
* A new entrance and porte cochere will include a centralized valet parking entrance and bus terminal giving guests better access to the north part of the property, including the tower. The expanded lobby will also have a gift shop.
* Atop the eighth floor of the new tower will be a 67,000-square-foot swimming pool and recreation deck. Brown said the deck will offer something that has been missing at the Stratosphere -- a place for guests to meet for parties. The deck, which will offer views of the Strip, also will have private cabanas, a large Jacuzzi, a poolside cafe and a cocktail bar. It's expected to be ready in July.
* An outdoor amphitheater, scheduled for completion in September, will seat about 3,700 people. Brown said the the arena will become a venue for headliners and boxing matches. The first act scheduled: the Beach Boys in the third week of September.
* The Stratosphere Buffet will be expanded to accommodate 550 people from the existing 350 seats and the food service will be revamped. Food preparation areas will include a pizza and pasta bar, a fajita and taco station, a rotisserie, an omelet bar and an expanded international foods section. The expansion is due for completion by midsummer.
* Some existing amenities will see a few subtle changes. By midsummer, Montana's Steakhouse will be converted to a Tex-Mex restaurant and oyster bar with live entertainment. "We're planning to have Tequila Shooter girls that will offer shots of tequila for bar patrons," Brown said. Also, Roxy's Diner, the '50s-themed eatery near the center of the property, will get a new menu and reinstitute singing waiters and waitresses.
Brown also said the $75 million makeover will include a general brightening of the casino.
Brown is hoping the new amenities planned at the casino will draw an even more diverse crowd to a property that prides itself in catering to many types of customers.
"We appeal to a broad range of client," Brown said, "and we hope some of the new things we're putting in will attract even more."
For example, Brown said the Top of the World -- a 365-seat revolving restaurant -- appeals to the well-heeled, sophisticated diner.
The tower, now one of the most recognized icons of the valley, attracts an international crowd that seems to be magnetically attracted to tall buildings. Stratosphere officials say about 8,000 people a day visit the observation deck of the tower, the tallest building west of the Mississippi River.
The rides on top of the Stratosphere draw yet another type of client -- the hip thrill-seeker. The High Roller, a roller coaster that reaches speeds of up to 30 mph at about 1,000 feet high, and the Big Shot, considered by many to be the most terrifying thrill ride in the valley, draw about 3,000 people a day to the top.
Another sector the company is attempting to draw is the value-conscious crowd. The Stratosphere is trying to attract unlucky gamblers by offering a bonus payback of 10 percent of verified losses to qualifying players through its Guaranteed Winners Program of the Stratosphere Players Club.
"This really goes to Carl's (Icahn) philosophy of giving the customer a really fair shot," Brown said.
Earlier this month, however, Harrah's Entertainment Inc. filed a patent infringement lawsuit against the Stratosphere over the the system used to track those unlucky gamblers.
Brown said gamblers also will soon see more proposition wagers posted in the Stratosphere's race and sports book as a means of attracting more players.
Developing loyalty
And Brown also recognizes that developing loyalty among players is key to earning repeat business. He said the company sponsors 80 to 90 special "player parties" each year to attract loyal customers for special tournaments and annual sporting events. Many of the new improvements being undertaken at the hotel-casino will accommodate loyal players -- the new rooms, the entertainment venues and the swimming pool.
"One of the things we've lacked is a banquet facility," Brown said. "The pool deck will serve as a great meeting place for our special activities for invited guests."
Some of the player parties include meet-and-greet functions with the entertainers brought to the hotel. In addition to the Beach Boys performance later in the summer, the company has brought Paul Revere and the Raiders and will bring Chubby Checker this month. The property also has two long-standing production shows, "Viva Las Vegas," and "American Superstars."
"Superstars," a tribute show of lookalike and soundalike celebrity impersonators, last month signed a one-year contract extension at the property.
"Viva Las Vegas" is the longest continuously running afternoon show in the city's history and producers observed its 10-year anniversary last month. The show opened at the now-defunct Sands hotel-casino in April 1991.
While Brown says the outlook is bright at the Stratosphere, the transition of the property from what it has been to what he hopes it will be has not been without challenges.
One of the largest has been transforming the corporate culture from the previous public ownership to Icahn's privately held structure. Brown said Icahn is an enthusiastic gaming entrepreneur.
"He loves the business and he knows it's a great business to be in," Brown said. "He is continually looking at new opportunities to make the business grow."
One of those opportunities was the 1998 acquisition of Arizona Charlie's and the 2000 opening of Arizona Charlie's East at a hotel formerly operated as Sunrise Suites on Boulder Highway. Managing to blend the corporate culture of the Arizona Charlie's properties and the Stratosphere wasn't as problematic as some experts had forecast, Brown said, because they all emphasize customer value.
Brown said using economies of scale in purchasing, marketing and service training has saved money for the company. Brown oversees all three properties as chief operating officer in addition to managing the Stratosphere. Former Las Vegas Mayor Ron Lurie is the general manager of Arizona Charlie's and Mark Majetich, a former Stratosphere executive, is general manager of Arizona Charlie's East.
Another opportunity Icahn saw was the acquisition of the Tower Shops mall. Icahn's American Real Estate Partners acquired Strato-Retail LLC, which was owned by a partnership between the Simon Group and Gordon Group Holdings.
The 122,000-square-foot mall on the Stratosphere's second story was troubled with lawsuits when an expansion was delayed when the Stratosphere went bankrupt and the anchor tenant, the Rainforest Cafe, pulled out of the project.
But the troubles of the past are history to Brown, who first became interested in the gaming industry when working at New York horse tracks and took his first Nevada job in Laughlin in 1992. He worked at the Flamingo Hilton in Laughlin and Harrah's Laughlin property before taking a marketing position at the Stratosphere. He was Icahn's choice to manage the property late last year.
A few months before Brown moved to Laughlin, the Stratosphere was winning the approval of the Las Vegas City Council. Casino maverick Bob Stupak, owner of the Vegas World hotel-casino on the Stratosphere site, eventually needed financial help to complete building the tower after winning council approval in 1991.
Declining fortunes
After a spectacular opening on April 29, 1996, attended by thousands of people, the fortunes of the hotel-casino went south quickly as local gamblers avoided the location and the hotel didn't have enough rooms for tourists to keep the casino filled.
The property fell into bankruptcy in January 1997 while under the control of Minnesota-based Grand Casinos Inc., which eventually held a 43 percent ownership position and had helped complete construction of the property.
Icahn, who has developed a reputation for taking over and turning around undervalued properties, acquired an interest in the Stratosphere in 1997 and took control in May 1998 when a bankruptcy judge approved his reorganization plan for the property over a plan offered by Grand Casinos.
Icahn had held a number of other tourism-related companies, including TWA, but the Stratosphere was his first foray into the Nevada gaming industry.
Today Icahn also owns Lowestfare.com, a Las Vegas-based Internet travel booking company, but its operations don't cross over to the hotel-casino side. Icahn has said that he hopes to start up or buy an airline to provide more cheap seats on planes for Lowestfare.com customers. He had a similar deal with TWA, but that ended when the airline filed for bankruptcy and received permission to be acquired by the parent company of American Airlines.
Icahn's plans for a new airline has fueled speculation that he may be interested in buying another bankrupt carrier, Las Vegas-based National Airlines. National officials say Icahn and National co-founder Mike Conway have been longtime acquaintances, but there are no plans for National to fly under Icahn's banner.
Brown said Icahn makes occasional visits to the Stratosphere, pausing to talk with employees when he's at the property.
"The Stratosphere has been through many changes in direction in the last five years, but under Carl Icahn, the focus is clear," Brown said. "We are recognizing the five-year anniversary with the knowledge that the best is yet to come."
Brown said Icahn has bolstered the work force with his philosophy of providing good service to customers -- not that most of the existing employees didn't already think that way. Of the 2,200 full- and part-time employees working at the Stratosphere, 700 have worked there since opening day.
Impressions
With the revived emphasis on service and the new amenities being put in, Brown said he hopes to erase the impression that the Stratosphere's location is a detriment. He said the neighborhood around the property is a nonissue -- he goes for walks through the area all the time and he thinks the seedy reputation of the area had come and gone years ago.
Cash flow at the property proves his point, he said. In the last 12 months, he said, cash flow has improved by 49 percent at the Stratosphere.
According to the company's 2000 annual report issued last month, the Stratosphere reported net income of $4.8 million on revenues of $132.8 million for the fiscal year ending Dec. 31, 2000, compared with income of $2.2 million on revenues of $123.2 million for the same period a year earlier.
Brown expects the expansion will improve the bottom line even more.
"We're optimistic that our new amenities are going to catapult us even higher," he said.
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