Thursday, Oct. 7, 2010 | 2 a.m.
Map of Plaza Hotel and Casino
1 Main Street, Las Vegas
In the business world, one person’s loss is often another’s gain. But in recession-battered Las Vegas, a fortuitous sale is benefiting both parties by helping an investor boost his bottom line while helping another get a leg up on the competition.
The Plaza in downtown Las Vegas, an icon known for vintage lounge acts and bit parts in movies such as “Casino” and “The Mexican,” will get a 21st-century makeover aided by the Fontainebleau, the unfinished Strip resort.
That’s because the Plaza, which begins a yearlong renovation Nov. 1, recently acquired high-end furniture intended for, yet never used by, the Fontainebleau.
It’s a recessionary twist on the usual hand-me-downs sold at auction by Las Vegas casinos that have been imploded or remodeled. Dated or worn furniture and fixtures have ended up in older properties or Third World hotels, where a well-used sink or chair from a Las Vegas resort is considered a step up.
When the Plaza’s 1,037 hotel rooms reopen in September 2011, they will feature top-flight wallpaper, carpet, tile, sofas, chairs, desks, dressers, side tables and bed frames courtesy of the Fontainebleau, the stalled luxury property with an estimated $3.5 billion price tag that was designed to compete against Las Vegas’ swankiest resorts.
The Plaza had already planned to remodel the rooms when its contractor heard the décor was for sale.
“We already had budget and a plan so it was easy for us to take items we needed (to fit) the budget,” said Tony Santo, the Plaza’s new manager and a former Harrah’s Entertainment executive.
The contemporary appointments represent a design leap for the Plaza, which attracts customers who appreciate its bargain prices and homey atmosphere, including worn, motellike rooms. Change was necessary, however, to revitalize the 39-year-old property overlooking historic Fremont Street.
The furnishings are of higher quality than the Plaza expected to buy for the price, Santo said.
As president and CEO of the company that runs the Plaza for landlord Tamares Real Estate, Santo is overseeing a $20 million remodeling project that will include new slot machines, a refurbished facade, remodeled public areas and as-yet-undisclosed attractions. Parts of the property will remain open while rooms are out of service, including the slot floor, showroom and Firefly restaurant.
Santo wouldn’t say how much the Plaza paid for the furnishings.
Like the rest of downtown, the Plaza has been hard hit by the tourism downturn recession.
Downtown casinos lost business to the Strip during the boom, with gambling revenue relatively flat while the Strip and many of Las Vegas’ suburban casinos flourished. The trend worsened in the recession as luxury properties discounted rooms and other attractions.
As part of the remodeling, the Plaza will be renamed the Union Plaza — reverting to its name from when it was built on the site of the historic Union Pacific rail depot.
While the Plaza closes its hotel tower for a year to spruce up, the Fontainebleau, a futuristic property inspired by its namesake hotel in Miami Beach, Fla., may sit empty for years.
The 63-story Fontainebleau became a poster child of the recession when lenders pulled the plug on financing in 2009, forcing the unfinished project to seek bankruptcy protection. It’s thought to be the largest and most expensive unfinished building in the U.S.
Much of its décor had been sitting in storage at the time of the bankruptcy filing in June 2009, a few months before its anticipated opening date.
Investor Carl Icahn acquired the property and related assets at a foreclosure auction in January and has reported a paper profit of about $50 million given the property’s estimated market value of about $200 million.
Icahn’s company in August disclosed that the building will sit idle until the economy improves — a prudent move at a time when tourism is suffering.
There’s a price for doing nothing, as some experts say it will cost the billionaire investor millions of dollars each year for insurance, real estate taxes and other maintenance expenses to ensure the building doesn’t deteriorate and construction can resume. It’s unknown what furnishings will replace those that were sold, although many expected Icahn to sell off Fontainebleau inventory that wasn’t installed in the building, rather than warehousing supplies for years.
The money-losing Plaza may also benefit by embarking on a major renovation at a difficult time — as remodeling efforts typically hurt casino revenue by disrupting the flow of customers and keeping rooms out of service.
Customers can expect to pay more for the remodeled rooms in return for the experience of staying at a higher-quality hotel, Santo said.
That may be a modest goal, as the Control Board reported $51.63 as the average daily room rate for downtown’s major casinos in fiscal year 2009.
Santo is optimistic about the Plaza’s new look.
“The goal is to drive more business to the Plaza,” he said.
The Plaza, renovated in 2011, has a lobby that features marble and inlaid mosaic tiles, chandeliers and a plush front desk that matches the classic Las Vegas feel with a contemporary look.
The hotel has 1,003 rooms and suites that showcase views of the Las Vegas Strip and downtown Las Vegas. Amenities include world-class entertainment, a casino floor that offers an array of classic gaming choice, which include 600 slot machines, a 400-seat bingo room, 18 table games and 57,120 square feet of casino space.
Among the dining options is Oscar's Beef * Booze * Broads, a steakhouse opened by former Las Vegas Mayor Oscar B. Goodman, which is located in the glittery dome enclosure above the hotel's main entrance.
The Plaza sits at the west end of the Fremont Street Experience on the site of the first train depot and auction site in Las Vegas, dating back to the San Pedro-Los Angeles-Salt Lake Railroad in 1905. The railroad was sold to Union Pacific in 1921 and the depot was demolished in 1970 to make way for the Union Plaza Hotel, built in 1971.
The hotel has been featured or is visible in several movies, including the 1971 James Bond film, "Diamonds are Forever;" the 1989 film "Back to the Future Part II;" the 1995 move "Casino," and the 2000 movie "Pay it Forward."