Thursday, July 28, 2005 | 11:07 a.m.
Station Casinos Inc. said today it intends to build a residential high rise on eight acres of land next to its Red Rock Resort in Summerlin.
The company, which didn't disclose a potential cost, said the tower will have up to 600 luxury units and will be built in partnership with Las Vegas high-rise developers Stephen Cloobeck and Steven Molasky.
Station will own 80 percent of the joint venture and Cloobeck Molasky Partners I LLC will own the remaining 20 percent. Sales of units are expected to begin next spring at the site southeast of the intersection of the Las Vegas Beltway and West Charleston Boulevard.
"This partnership, with two of the most experienced and successful developers in Las Vegas, represents another example of how we can maximize the value of our land holdings and lower our overall investment in a project," Station President Lorenzo Fertitta said in a statement.
In conjunction with the company's second-quarter earnings announcement today, Station executives also said the company will be breaking ground on its Phase III expansion at Green Valley Ranch in Henderson.
The third phase is part of a multi-year master plan at Green Valley Ranch and is typical of the way the company has built onto other properties over time. Henderson's population growth and the property's success were key factors in the decision, executives said.
The expansion will include a 1,500-space parking garage, additional slot machines, a new race and sports book, poker room, 500-seat entertainment lounge, 14,000 square feet of additional convention space and two new restaurants at a cost of $110 million. Construction will begin this fall and will open in phases from the fourth quarter of 2006 through early 2007.
In addition, Station said the estimated cost of Red Rock Resort -- the company's biggest, most expensive and ambitious property to date -- is now $925 million because of increased construction costs and changes made to the design. The property, which had been estimated at $450 million and later at $800 million, is on track to open early next year.
Station continued to benefit from the growth in the Las Vegas economy, today reporting a 40 percent increase in second-quarter profit from a year ago.
The company reported profit of $40.6 million or 58 cents per share compared with earnings of $29 million or 43 cents per share in the 2004 quarter.
The company also raised earnings estimates for the remainder of the year and next year on the continued strength of the Las Vegas locals market.
Across the company's eight major locals casinos, revenue rose 16 percent to $296 million. Earnings before interest, taxes, depreciation and amortization -- defined as operating cash flow and a key indicator of casino profit -- rose 29 percent to $122.7 million.
"The Las Vegas locals market continues to hum for all the usual reasons -- strong local economy, job and population growth," stock analyst Joe Greff of Bear Stearns said in a research note to investors today.