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September 22, 2018

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Caesars execs address plans for land on Strip

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Christopher DeVargas

An exterior view of Caesars Palace, June 6, 2013.

Caesars Entertainment executives talked growth and efficiency today in their first investors conference since the company emerged from bankruptcy but also fielded questions from analysts about business on the Strip after the Route 91 Harvest festival mass shooting.

“It’s fair to say we are cautiously optimistic about the rebound and think the occupancy rates across the Strip took a little hit the first day and week,” said Caesars Entertainment President and Chief Executive Officer Mark Frissora.

“But every day seems to change and improve. The meeting business is solid. There have been no cancellations for the year. The biggest impact has been in Asian play. It has been less because people in Asia are very respectful of the deaths that have occurred and believe there should be a period of mourning.”

The question was just one of many, most around financials and growth opportunities, that Caesars executives spoke about during the lengthy presentation.

In Las Vegas, Frissora said Caesars has a master plan that will develop seven acres in front of Caesars Palace, as well as land it owns behind properties on the east side of the Strip and Koval Lane.

In addition to the land in front of Caesars Palace, the company owns about 39 acres next to the Linq and about 50 acres next to Bally’s, Paris and Planet Hollywood.

The only specific details of the plan Frissora shared was about a new convention center the company is planning to build behind the Flamingo and Harrah’s.

“The convention center is going to be 300,000 square feet,” Frissora said. “It will be very functional; that will host small and midsize meetings. We’re not doing exhibit space.”

In response to investors questions, other Caesars executives said the center would cost $300 million-$350 million and should be built in two years, depending on permitting and coordination with Caesars’ new board of directors.

Frissora also said the company is looking for new ways of expanding the company’s international footprint, licensing the brands of individual casinos Caesars owns to companies in Europe, Asia and the Middle East.

“Our brands are powerful and wanted by developers all around the world,” he said. “We’ve never done this before.”

Caesars would receive a 16-17 percent management fee from the company wanting to use the brand, Frissora said, and would also probably hold a small equity stake in that company. In some deals, he said, Caesars would also receive a percentage of the profits after they passed a certain level.

Frissora also said Caesars will be expanding via mergers and acquisitions and also proceeding with a South Korean project on the coast of the South China Sea that should be completed in 2020. It is also working to develop projects in Brazil and Japan.