Tuscany hopes to find right blend of tourists, locals

By Liz Benston

Friday, Jan. 17, 2003 | 11:17 a.m.

Just one block east from the crowds of tourists that mill about the famed "Four Corners" of the Las Vegas Strip, the modest facade of the Tuscany hotel sits near a busy restaurant corridor and several other casino hotels that rely on business from locals.

At 10 tonight, the year-old hotel will open a 60,000-square-foot casino to the public, further developing what was once a sleepy stretch of apartments and retailers behind the Strip into a destination spot for tourists and residents.

In a town bristling with hotels, developing a niche can mean the difference between success and failure.

Around the Tuscany Hotel & Casino, at least a dozen other properties have been able to carve out a base of customers in the shadow of the Strip's megaresorts. They include hotels with small casinos, bigger casinos that offer fewer hotel rooms and hotels without casinos at all.

That so many are flourishing is a sign that the $100 million Tuscany can do the same -- if it offers something a bit different, observers say.

"People have gotten rich on the niche," said Anthony Curtis, publisher of the Las Vegas Advisor consumer newsletter.

"It's going to be particularly tough for them because they are surrounded by these super discount locals joints that are strong," Curtis said. "Their clientele is going to be two things -- a database of out-of-town customers ... and second, with their lounge and their restaurant, they're going to have to hope that a higher demographic local client will choose that over the value-driven properties."

Tuscany general manager Bruce Fraser says the 716-room property will cater to an evenly split group of tourists and locals.

Locals like properties that are smaller and more relaxed than megaresorts, Fraser said. Tourists and businesspeople also seek smaller, more accessible places to hold meetings and unwind, he said. The property's suites -- an average 600-plus square feet -- also appeal to travelers. And unlike some hotels where customers have to walk through the casino, the Tuscany has two front entrances -- one for the casino and the other for the hotel.

"There's a whole customer base out there that doesn't want the megaresort anymore," Fraser said in an interview with In Business Las Vegas, a sister publication of the Sun.

"You've got an entire customer base today that's tired of the football-field walk across the casino, the 32-floor tower elevator ride, the football(-field) walk back to their room."

Surrounding hotels say they welcome their new neighbor, which replaces what was largely vacant land and run-down apartment complexes for decades.

Nearby Ellis Island Casino & Brewery offers inexpensive meals to attract casino workers from Strip resorts as well as surrounding properties.

"We always welcome new blood to the neighborhood because we cater to their employees," Ellis Island President Karen Dorsey said. "We did it with the MGM Grand when they opened, we did it with Terrible's when they opened. A lot of times people that work in a certain environment want to get away from that and go to another place after work or when their shift ends."

At the Key Largo Hotel & Casino, just down the street from the Tuscany, Senior Vice President and General Manager Michael Rose says the new casino will expand the locals business for surrounding properties as well as drive more tourists to the neighborhood.

"It's a nice-looking place. People will come from further away to check it out," Rose said.

In the past five to six years, the neighborhood east of Paradise Road and bordered by Flamingo Road and Harmon Avenue has blossomed into a booming business corridor with more than 20 restaurants and several hotels within a mile of each other.

Charles Heers, the majority owner of the Tuscany, didn't have to build the Tuscany to make his mark on Las Vegas.

Heers, a contractor, came to Las Vegas from California in 1953 to build homes for military personnel who worked at a nearby atomic test site.

His interest extended to the hotel-casino business. He leased a stretch of vacant dirt across from the old Sands hotel -- a site where Steve Wynn would break ground on the Mirage and Treasure Island resorts decades later.

The lease was expensive -- $60,000 a year -- and Heers dropped it after learning that the Mob would become his unofficial partner.

"I never could get the money (to build) it," said Heers, 76. "I had to get rich enough to do it. So I built homes instead."

Howard Hughes eventually bought the land in the mid 1960s as part of a rash of purchases along the Strip. With profits from home building and, later, constructing and owning apartment complexes, Heers in 1988 bought 17.5 acres on East Flamingo Road from the Howard Hughes estate. He bought another 10 or so acres that ended up becoming the future casino hotel site.

"I could have sold the 17.5 acres four years ago for $35 million. That's what my family wanted me to do. But when you've thought about doing something for so long you just have to end up doing it."

Heers didn't build the hotel for another 14 years because interest rates were too high. A couple years ago, rates fell to a level that made the project worthwhile, he said.

Heers used longstanding relationships with major banks that had made construction loans for his apartment complexes, securing a hotel loan for less than 5 percent interest. He also put in some of his own money and used construction services from his minority partner, Arizona-based contractor Gaylord Yost.

The casino, part of the initial plan, would soon follow.

The Tuscany's light Italian touch is a far cry from Heers' original idea to develop a Caribbean-theme resort. For more than a decade, a life-size ship on the land announced Heers plans for a tropical property that never materialized.

Demand for heavy themes is shifting, Fraser said.

"You can't afford to be too themed anymore. You have greater flexibility with the Tuscan look versus a pure Caribbean theme."

Added Heers: "It's not gaudy and it's not glitzy. It's comfortable."

The casino will also be ultra-modern, outfitted exclusively with "cashless" slot machines favored by many local gamblers. Such machines accept and dispense paper tickets instead of spitting out coins.

Plenty of attractions have sprung up off the Strip since Heers moored that Caribbean ship. Properties like Terrible's, Ellis Island and Key Largo attract both locals and tourists with low prices, while the nearby Hard Rock also attracts a younger mix of customers to its hip, rock 'n' roll atmosphere. Some travelers who want to avoid casinos altogether stay elsewhere in the vicinity, including places like the St. Tropez, Alexis Park, Crowne Plaza and Marriott.

Unlike flashy megaresort attractions, smaller properties can compete by offering simple perks like handy parking, said Shannon Bybee, executive director of the International Gaming Institute at the University of Nevada, Las Vegas.

Aside from attracting their own hotel customers to the casino, the Tuscany is in a choice location that could draw from a variety of potential customers, including convention-goers, local gamblers and even nearby tourists who are staying at hotels without casinos and don't want to trek to the Strip to play slots, Bybee said.

The region isn't much of a residential neighborhood but is able to draw from nearby apartments and condominium complexes in addition to restaurants and other businesses, he added.

Though he won't have a hand in managing the casino, Heers says his 50 years in Las Vegas have taught him about what casinos have done right.

"The best-run hotel when I came to town was the Desert Inn," he said. "Whether you spent $1 or $10,000, they treated you like the king and queen."

Besides aiming for personalized service, the Tuscany will rely on other well-used formulas.

"If you're not loose on your slots, you won't keep them," Heers said. "But if the food's good and the slots are loose, you can."