Wednesday, December 2, 2009

Wynn: CityCenter's No Mirage

Here's this week's Las Vegas Weekly "The Strip Sense" column, in which Steve Wynn takes apart what he views as a myth that there's any comparison between pre-Mirage skeptics and pre-CityCenter skeptics.

Is Steve Wynn Rooting For CityCenter?


It’s the conventional wisdom, so naturally Steve Wynn must do his best to explode it.

As we plod through this period of CityCenter launches that culminates on December 16 with the grand opening of the 4,004-room Aria, the response to skepticism about the project’s very premise is, again and again, to refer back to naysayers who predicted the doom of the Mirage when it bowed in 1989. The Review-Journal, in fact, built its entire Mirage-at-20 piece last month upon the notion that the sourpusses who insist on examining CityCenter’s potential through the lens of the current market and the questions about its lofty, unproved concepts are the same as those who doubted Steve Wynn two decades ago.

Nothing seems to piss Steve Wynn off more these days, not even Obamacare or Garth Brooks ticket scalpers.

“To compare CityCenter to Mirage is a ridiculous non sequitur,” he shouted into the phone last week. “It made a nice story, but it fails to examine the facts, like most of the stuff you guys write.”

Happy to pretend that by “you guys” he meant everyone but me, I pressed on. I had just finished two lengthy interviews with CityCenter President Bobby Baldwin, the executive Wynn plucked from the Golden Nugget poker room and made his first lieutenant and with whom he built the Mirage, Treasure Island and Bellagio. Baldwin parted ways with Wynn after MGM bought Mirage and has overseen CityCenter’s construction and development since it was but a bubble diagram conjured up by MGM Mirage’s then-president/now-CEO Jim Murren and design chief Bill Smith back in 2004.

“At the Mirage, we had nothing but negative publicity until the day we opened,” Baldwin recalled. “‘It’s gonna cost too much to run, it cost too much to build, it’s going to cannibalize the marketplace, the Las Vegas visitor volumes aren’t big enough for a place as large as Mirage.’ Then the day we opened, everyone went silent, and all they said were good things.”

Wynn didn’t deny that all of these things were said about the Mirage. It’s just different because while the Mirage was seen then as the great revolution of Las Vegas, all its moving parts had actually been seen and proven before.

Read the rest HERE


Michael said...

Nice story Steve.

atdnext said...

Yes, it's a great story. Good catch, Steve. And sorry, but Steve Wynn is just full of it here. Of course there are 20 years worth of differences, but the larger point is that the very same allegations being thrown against Wynn 20 years ago for building The Mirage ("It's too much debt! People come to Vegas to gamble, not do fancy pants crap! No one wants expensive hotel rooms and expensive gourmet food in Vegas! They can't make enough money to pay off the debt!") are now being thrown against Jim Murren and MGM Mirage for building City Center. I think Wynn is just angry that he can't take (direct) credit for City Center, so he can't let this be seen as "historic", "groundbreaking", and "visionary" as The Mirage, The Bellagio, Wynn, or Encore.

Anonymous said...

Steve - Your photo of the Bellagio through City Center that you posted actually made me sad. It really would be a shame to see the Bellagio so overshadowed.

My memory says the Bellagio cost $1.6 billion and during 2007 heyday was cranking out $400 million of cash flow. For City Center to have those kinds of returns, we would have to deduct the final net from the condo sales and then do the percentages. That's a big number. I doubt Wynn sees those kind of returns at Wynn/Encore or that Adelson will see them at Palazzo (for some reason I think he did at Venetian, but that's pure speculation on my part). CityCenter, even after, condo sales is going to need some incredible numbers to justify the investment. If City Center fails to steal whales from Wynn/Encore and Venetian/Palazzo, it's going to have a problem. The dice are in the air, let's see how it turns out.


GregoryZephyr said...

I'm not sure if this is the right interpretation, but this is the way I see it: Wynn was okay with a reputation as a "bet the farm on a visionary hunch" businessman in the days when banks were deliriously throwing money around. Now, however, banks only want to lend to people so conservative they make Warren Buffet look like a carefree teenager. So, now Wynn is trying to say, "Hey, that was just an image back then. I really really really am a smart businessman and financial analyst at heart."

V.S. said...

The above comment implies that banks financed Wynn's Strip casinos. Mirage, for sure, and I think, T.I. and Bellagio were financed with junk bonds from junk bond pioneer Michael Milken who, of course, later went to jail for his practices. If it were not for the unconventional financing of Mirage, it probably could never have been built. Financing was no longer available from Central States Pension Fund, i.e. mob money, and conventional lenders were not yet stepping into the breach left by the mob's demise. It was Wynn's partnership with Milken that made major new construction on The Strip possible after more than a decade of no new building.

Jeff in OKC said...

Although it is true that junk bonds financed the Mirage, I think that after Wynns success there and the Circus-Circus built Excalibur, the mainstream financial markets were heavily into the casino biz by the late 1990's.

Anonymous said...

You quoted Wynn, "Tendacious, stinkin’ journalism.” "Tendacious" sounds like a combination of tendentious and tenacious, but it isn't a word.

I'm wondering if it was just a typo of yours or a Wynn neologism he conjures to impress us with his extensive vocabulary but instead winds up appearing foolish by using a word that's not really a word in the same way he tried to impress Nora Ephron and Barbara Walters et al. with his priceless fine art by ceremoniously waving his arm at his new Picasso but in the process punching a hole in the 20 million dollar canvas.

That's a big part of what's so entertaining about Wynn and your deservedly popular interviews with him. His insecurity and need to impress are so obvious (and blundering) to us but at the same time he seems so unaware of how transparent he actually is.

Which is not to say that I don't repect Wynn, or that I don't admire what he's accomplished in his life. I do.


Anon - I actually didn't know tendentious was a word. I'll have to go back and listen again. I thought he was combining tenacious and mendacious, and if you look around the web there are definitions for and uses (misuses?) of tendacious. I will listen again. It was a point of confusion for my editor, too.


P.S. to Anon: If Wynn or any great artist, architect, performer, entertainer, etc. wasn't driven by a need to impress others, we'd all be the poorer for it.

atdnext said...

Steve (Friess)-

Oh, I get it... And I agree. Steve Wynn always "dresses" his resorts to impress, and Las Vegas is definitely the better for it! He started upscaling this town with the renovation of The Golden Nugget over 30 years ago, began reinventing The Strip 20 years ago with The Mirage, brought a new level of sophistication to Las Vegas with The Bellagio, and reinvented The Strip yet again with new style and a new attitiude most recently with Wynn & Encore.

If it weren't for Steve Wynn's ego, we wouldn't have the Las Vegas we've come to know today. It just irks me that he can't appreciate how Jim Murren and the others who inherited his original empire at MGM Mirage have put their own heads together to reinvent The Strip yet again and bring some totally new elements to this town with City Center.

Anonymous said...

I'm surprised you never heard of the word tendentious as it's an important word widely used in literary and journalistic criticism. I think that's the word that Wynn had in mind when he said, "tendacious." He probably was trying to say the reporters had a POV or slant that they were strongly injecting into their articles when the stories should have just reported facts or quotes. I would bet tendentious will be one of those words that you never noticed before but will now see often and when you see it you will think of me, anonymous guy, as the one who turned you on to it.

I'd also like to correct the price ($20m) I gave for Le Reve, Wynn's prized Picasso in my earlier comment. Actually, he had agreed to sell it for $139m shortly before shoving his elbow through it. After restoration, it was appraised at $85m.