Wynn Planning $1.6 Billion Lake Resort on the Las Vegas Stripby
CEO outlines $1.6 billion resort behind its two casinos
Boardwalk, fireworks to be key features of latest expansion
Wynn Resorts Ltd. is building a lake resort behind its two Las Vegas casinos, creating a place for water-skiing and paddle-boarding just off the desert city’s famous Strip.
The Las Vegas-based company will convert its Tom Fazio-designed Wynn Golf Club into the resort, which will feature a lake and a mile-long boardwalk, founder Steve Wynn said Wednesday in a presentation to investors in Las Vegas. The resort, which is tentatively called Paradise Park, will offer ice cream and a fireworks show every night.
“Just like Disney,” said Wynn, who’s still working on the details and plans to seek approval from his company’s board in September.
Wynn shares rose 10 percent to $98.80 at 9:50 a.m. in New York Thursday, their highest intraday price since August 2015. The stock had gained 29 percent this year through Wednesday’s close.
The proposed project is the first major construction Wynn has undertaken in his home city since Encore Las Vegas opened there in 2008. The new resort, which will feature 1,000 hotel rooms and 250,000 square feet of meeting space, could cost as much as $1.6 billion, said Wynn, the company’s chairman and chief executive officer.
“This is the most fun project in my 45 years,” Wynn told investors. “Somebody take the other side, tell me what’s wrong with this idea? We’ve all drunk the Kool-Aid.”
The golf course behind the Wynn and Encore casinos earns about $5 million in earnings before interest, taxes, depreciation and amortization, while Paradise Park could bring in $300 million to $400 million, Telsey Advisory Group analyst David Katz wrote in a note Thursday.
“We view the re-development as a shrewd move on the part of Wynn to unlock
further value from the land,” said Katz, who raised his rating on the stock to outperform.
Wynn also used the event, the company’s first-ever investor day, to reveal details of its Wynn Palace casino under construction in Macau and another property under way in the Boston suburb of Everett, Massachusetts.
The Macau resort, now scheduled to open in late July or August, will feature entertainment in its restaurants, including an animatronic King Kong grabbing a banana in a mock New York skyline, Wynn said. The $4.1 billion resort could earn as much as $850 million in Ebitda by 2017, the company said.
Casino operators have been under pressure for two years as the Chinese government’s crackdown on corruption have made many high rollers wary of visiting the lavish venues in the Chinese gambling enclave. Wynn’s Macau property, which is mostly geared toward a high-end clientele and generates two-thirds of the company’s revenue, has suffered accordingly, according to Tim Craighead, director of research at Bloomberg Intelligence.
Wynn’s new Macau venue has a gondola ride and a lake with fountains similar to the one fronting the Bellagio in Las Vegas, which could help the company gain traction among less affluent gamblers, Craighead said.
A roughly $2 billion Boston-area resort could generate as much as $400 million in Ebitda, according to a slide presentation that accompanied the event.