Monday, February 09, 1998
THE RESERVE: It's A Jungle In There
The Reserve to offer gamblers in Henderson a walk on the wild side
By Dave Berns
Review-Journal
Casino designer Henry Conversano is contemplating the question
because, after all, the range between creativity and tackiness is a
fine one in a town built on neon and showgirls.
"This is all theater," Conversano said. "People come here to
get entertained."
The 66-year-old Conversano lists The Mirage and The Lost City
in South Africa among his creations, and his latest offering -- The
Reserve in Henderson -- is set to open at 10 p.m. Tuesday following a
fireworks display.
Developers of The Reserve, which opens at 10 p.m. Tuesday in
Henderson, hope the hotel-casino will grow along with the rapidly
expanding community.
Sculpted images of monkeys, elephants and other jungle animals dot
the floor of The Reserve.
Photos by John Gurzinski.
"A big word is, 'appropriateness,' " Conversano
reflected. "There's stuff in Victoria's Secret that 10 years ago
would have been tacky."
The African-themed Reserve is the entree of Ameristar Casinos
Inc. into the Southern Nevada gaming market.
They have dubbed it, "A New Breed of Casino," in their
corporate marketing materials, a hotel and casino development that
incorporates a full-blown story line into a jungle motif. The setting
is something akin to Tarzan meets Indiana Jones, with a dash of
Primadonna Resorts' Buffalo Bill's tossed in for design.
"They did a nice job in there. I just think the theme is
different," said Jason Ader, a Bear, Stearns & Co. Inc. gaming
analyst. "There are some parts that left an impression that I'd never
gotten in any other place."
Ameristar, a relatively small company with roots in the rural
gaming market of Jackpot, is banking on booming residential growth in
the Henderson area to drive foot traffic through the property.
"We've done our homework. We did a lot of due diligence before
we jumped into this deal," said John Spina, Ameristar's chief
operating officer. "We call this a 'conservative growth strategy.' "
Henderson's population grew by 88 percent between 1990 and 1996
for an increase of 57,391 residents, according to the U.S. Census
Bureau. That makes it the fastest-growing U.S. city with a population
of more than 100,000, far outstripping Chandler, Ariz., the No. 2
city on the list, which grew by 59 percent. A state report last fall
put Henderson's July 1997 population at 146,200
The Boulder Strip gaming market, which stretches along Boulder
Highway from Las Vegas to Henderson, has sustained double-digit
increases in gaming win since the June opening of Sunset Station.
"It's technically a phenomenon you see when you bring on a new
property," said Russell Guindon, a senior research analyst for the
state Gaming Control Board.
In November, the area's casinos reported gaming win of $37.5
million, an increase over the $30.5 million reported in November
1996.
The Boulder Strip had 24 locations generating at least $1
million in annual revenue in 1996 and 1997.
Before the August 1994 opening of Boulder Station, Boulder
Strip casinos reported November 1993 gaming win of $14.6 million.
That year, the region had 15 locations generating at least $1 million
in yearly casino revenue.
"There is a lot of capacity being added to the Boulder Highway-
Henderson-Green Valley market, but you also have an explosive
population being added out there," said Glenn Christenson, chief
financial officer of Sunset Station owner Station Casinos Inc.
Ameristar executives are banking on that lucrative growth to
drive foot traffic to their 28-acre site at the intersection of U.S.
Highway 95 and Lake Mead Drive.
But Spina warned in November that Ameristar expects a "very
conservative" return on its investment. He told a New York
hospitality industry conference that he expects The Reserve's returns
to improve as the company works out operating efficiencies at the
site, as Henderson grow.
"We want to grow into the market," Spina said last week. "We
didn't want to overbuild. We have plenty of real estate to keep
expanding the property."
Conversano designed the property around a Hollywood serial-like story line.
Bush pilot Congo Jack, an Indiana Jones sort of figure with
Clark Gable good looks, parachuted to safety, as his plane crashed
into the casino's jungle. A faux fuselage protrudes from the casino
floor as a testiment to the accident.
Jack was nursed back to health by Monsoon Mary, the proprietor
of a bar that sits near the wreckage of the plane. A waterfall rushes
over the roof of the bar.
Mystical cloud formations, much like the ceiling found in The
Forum Shops at Caesars, pepper the skyline. Sculpture castings of
wildlife dot much of the casino floor.
"The casino is the showroom," Conversano said. Yet, at 37,000
square feet it's small by Las Vegas standards, where 100,000 square
feet is generally the minimum for a casino.
"But it's packed, juicy," Conversano noted.
An estimated 100,000 cars will pass the 224-room Reserve daily
along U.S. 95. That total is expected to increase by 20,000 after a
beltway is constructed along Lake Mead Drive by 1999, linking the
east and west sides of the Las Vegas Valley. Plans call for the
roadways to join next to The Reserve.
"This market is only going to grow because the area's growing,"
Spina said.
The Reserve sustained some rough going early on.
The project was delayed for more than three months in 1997
because of a dispute between Ameristar executives and two former
stockholders of Gem Gaming Inc., which began the construction.
Ameristar bought the project from Gem in June 1996 for $106
million.
Ameristar officials had charged that Gem executives Steven
Rebeil and Dominic Magliarditi had breached terms of the buyout
agreement, making it difficult for Ameristar to arrange financing for
the project. Ameristar paid $32.7 million to settle the dispute.
Meanwhile, Ameristar Chief Executive Officer Craig Neilsen is a
quadriplegic who was severely injured in an early 1990s auto
accident. Recent health troubles have kept him at home, but
Conversano said Neilsen has remained involved in every aspect of the project.
"Working with Craig has been a frustrating trip that I knew
would end up in a meaningful conclusion," Conversano said. "Craig
will stay up 24 hours a day to make the place work. He's got the same
bug as Steve Wynn -- the desire to do something meaningful,
exciting."
Neilsen's physical condition makes it a must that he hire
people he can rely on to update him daily on the status of The
Reserve, Conversano said.
"How many people have you hired in your house where you can
trust everyone who works for you?" Conversano said.
Neilsen declined to be interviewed for this story.
Ameristar has developed a reputation as a solid operator in
secondary gaming markets. The company owns and operates casinos in
Jackpot, Vicksburg, Miss., and Council Bluffs, Iowa.
"One thing about Ameristar is those guys know how to operate in
tough markets," said David Wolfe, a CIBC Oppenheimer Inc. gaming
analyst. "Vicksburg is no picnic. Council Bluffs is OK. They know how
to run lean operations."
Ameristar stock was up 4 percent last week, closing at $6 a
share Friday on the Nasdaq exchange.
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