http://www.crainsnewyork.com/article...FREE/309139964
Wynn or lose
Vegas superstar faces uphill race at Aqueduct.
By Amanda Fung
September 13, 2009
In 1999, Steve Wynn, the man who helped transform Las Vegas into a glamorous gambling mecca, built an eight-acre fountain that performs a watery dance set to music every half-hour in front of his newest casino there. Seven years later, he installed an even splashier water feature at the entrance of his new casino in the Chinese territory of Macau.
Today Mr. Wynn is at it again—in humble Ozone Park, Queens. Only this time he's planning a tranquil two-acre pond in the foreground of what he hopes will be his latest gambling destination, a sprawling quasi-classical building that will rise beside the Aqueduct Raceway.
Mr. Wynn is shifting his approach in the face of one of his toughest challenges yet: He's out to prove he's the man the state should tap to turn the run-down 1950s Big A racetrack into a money-making machine with 4,500 video lottery terminals, or armless slot machines.
With five other active bidders in the running, including a group led by Manhattan's largest landlord, SL Green, and another by his Las Vegas rival MGM Mirage, competition is stiff. No clear leader has emerged in a process that has been anything but transparent. But one thing is clear: Mr. Wynn—a man credited with a Disney-esque ability to conjure up hugely lucrative magic kingdoms—wants to prove he can make it in the Big Apple.
Top ratings galore
“I make people feel good and special,” says Mr. Wynn, boasting that his Wynn Las Vegas luxury resort is the only hotel in America to earn Mobil five-star and Michelin five-star ratings. “That is what I do.”
The debonair 67-year-old with a toothy 150-watt smile and a perma-tan has come a long way from his days as a quiet English major at the University of Pennsylvania. The eldest son of Michael Weinberg, a compulsive gambler who changed the family name to Wynn, Steve had no interest in games of chance. But the death of his father in 1963 forced him to abandon plans to study law and instead manage his inheritance—$350,000 in gambling debts and a small East Coast bingo business.
“It was a seminal event in my life,” says Mr. Wynn.
Less than 10 years later, Mr. Wynn burst into big-time casino gambling, turning a down-at-the-heels Vegas gambling joint, the Golden Nugget, into a luxury resort. Later, he built the Golden Nugget Hotel & Casino in Atlantic City, signing up New Jersey's own Frank Sinatra as its television pitchman.
In 1989, Mr. Wynn opened the Mirage in Las Vegas, which became the first hotel/casino to generate a record $1 million in revenue a day. Others followed, including the $1.6 billion Bellagio.
An avid art collector, the billionaire has a degenerative eye condition that has robbed him of his peripheral and night vision. Nonetheless, he keeps famously close track on his properties by weighing in on everything from their architecture to the location of their toilets.
“He is maniacal about details,” says Andrew Pascal, Wynn Resorts' president.
Mr. Wynn's touch failed him with one project, the Beau Rivage resort in Biloxi, Miss. There, building costs of $700 million far exceeded estimates. The resulting losses depressed the shares of Mr. Wynn's Mirage Resorts Inc., allowing archrival Kirk Kerkorian of MGM to snap up the company for $6.6 billion in 2000.
“Very few Wynn projects have fallen flat,” says William Eadington, director of the University of Nevada Reno's institute for the study of gambling and commercial gaming. “But the Beau Rivage missed the mark.”
While the costs of Mr. Wynn's proposed 350,000-square-foot facility at Aqueduct have not been disclosed, critics say Queens could be his new Biloxi—a bad fit for a man who has made his mark building lavish palaces that cater to high rollers. In Queens, the winner will not only have to live without lucrative table games but also must give 70% of revenues to the state.
Labor relations also seem to work against Mr. Wynn. The state requires the successful bidder to reach a labor peace agreement, but the hotel union is still unsatisfied. That could pose problems for Mr. Wynn, who is the only bidder planning to build an all-new facility and who will need to work closely with organized labor to meet his projected completion date of spring 2011—the latest of all the bids.
Mr. Wynn insists the wait will be worth it. He forecasts revenue of roughly $500 million in the first year alone, handily exceeding the state's goal of $1 million a day. He predicts even higher revenues in each succeeding year, aided by what he calls his premium brand. That brand and Mr. Wynn's sheer star power already seem to have dazzled some New York politicians, but at the end of the day he remains an outsider without any local partner to help show him the ropes.
One thing he does have in abundance, though, is cash. Mr. Wynn bills himself as the most financially sound bidder in these troubled times, with the cash on hand to meet his $300 million up-front bid.
A more sedate vision
Although Mr. Wynn has been criticized for attempting to bring Vegas-like glitz to working-class Ozone Park, in renderings the facility looks relatively modest with its sedate pond and poles festooned with brightly hued racing silks out front.
Inside, a single floor would be crammed with slots, a lounge, shops and restaurants. The building will feature natural light and plantings—part of what Mr. Wynn's team refers to as the developer's “special sauce.”
“They're not flashy; they're beautiful,” Mr. Wynn says, referring to his properties.
This will be his second try at convincing state officials that his concept of beauty will sit in Queens. Last year, he and a few partners, some of whom are now competing bidders, lost the contract. When Delaware North, the winner in that initial contest, failed to come up with its promised $370 million up-front fee, the bidding process was restarted. This time, Mr. Wynn is going it alone in Queens without any local partners.
As the Aqueduct decision looms before Gov. David Paterson and the heads of the New York Senate and Assembly, Mr. Wynn says if he doesn't win the bid he will “take the result with grace.”
“The sun comes up tomorrow, and you go on with your life,” he says.
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HANDICAPPING THE BIG A's HALF DOZEN BIDDERS
AQUEDUCT ENTERTAINMENT GROUP
PARTNERS Turner Construction, Rev. Floyd Flake's Empowerment Dev. Gp., Navegante Gp., Levine Builders, Clairvest Gp., others
BID (opening/current): $151M/$251M (contingent on more VLTs)
HIGH CARDS Promises to open by April 1, strong community ties, extensive NY experience
LOW CARDS Lacks brand-name casino operator and gaming experience
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AQUEDUCT GAMING
PARTNERS Delaware North, Saratoga Gaming and Raceway, Harrah's Entertainment, McKissack & McKissack
BID (opening/current): n.a./$300M
HIGH CARDS Promises to open by April 1, won original contest to redevelop site, tied as highest bidder, strong Albany connections
LOW CARD Failed to come up with its promised $370M payment after winning original contest
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MGM MIRAGE
PARTNERS R. Donahue Peebles, Harbinger Capital, GlobalHue
BID (opening/current): $150 million/ $150 million
HIGH CARDS Promises south Queens economic development, plans to open by summer 2010, only bid led by African-American
LOW CARDS MGM is financially troubled as it struggles to build vast complex in Las Vegas, few city connections, no labor deal
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PENN NATIONAL GAMING
PARTNERS Not available
BID (opening/current): $5 million with conditional $150 million/not available
HIGH CARD Operates slots at four racetracks
LOW CARDS Limited resources and local connections, dark-horse candidate
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SL GREEN
PARTNERS Hard Rock Entertainment, Tishman Construction, companies affiliated with BET founder Robert Johnson
BID (opening/current): $250 million/$275 million
HIGH CARDS Extensive NY connections and experience, good union and community relations, popular brand name, plans to open by April
LOW CARD Lost earlier bid
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STEVE WYNN
PARTNERS none
BID (opening/current): $75 million/$300 million
HIGH CARDS Long track record of success, premium brand name, lots of cash
LOW CARDS Won't open until spring 2011 at earliest; lacks NY connections, experience and partners; strained relations with local unions; might not attract high rollers to Queens