Hard Rock
Opts Out Of Tribal Deal to Focus on Las Vegas Project
The Hard Rock hotel and casino
has severed ties with a California Indian tribe
in order to focus its energies on building its $1
billion-plus condominium project and casino expansion
in Las Vegas.
Early this year, Hard Rock Hotel and Casino Inc.
obtained its first tribal management contract when
it struck a deal with the Pauma Band of Luiseno
Mission Indians near San Diego to develop and run
a casino resort for the tribe.
Hard Rock President Kevin Kelley said the property
has decided to scrap the deal "in fairness
to this property and in fairness to the Pauma tribe,
who really wants to advance their gaming growth."
"We have a very big project we're doing here
that is moving at light speed and it really needed
to have our complete and undivided attention,"
Kelley said.
The property is expected to begin construction
before the end of the year, or about 45 to 60 days
after buyers are presented with sales contracts
in September, Kelley said.
About 4,100 people sent checks to reserve 1,200
available units, leaving close to 3,000 people on
a waiting list, he said. The Hard Rock is now taking
deposits from buyers as a second step before asking
for a significant portion of the down payment.
"We've got the premium in demand and the ability
to build this in one phase," Kelley said. Some
competitors "have to wait while demand catches
up to their needed sales pace."
The Hard Rock hasn't advertised prices for units
but Kelley said they are expected to cost upwards
of $900 per square foot -- in line with other luxury
condo towers.
Bungalows and single-family units that will be
integrated into a new pool area under development
will cost "substantially" more than that,
he said.
Like the Palms resort across town, the Hard Rock
has cultivated a list of celebrity buyers that include
rock stars, professional athletes and actors.
"The buyer is buying what we think is one
heck of a product," Kelley said. "All
the new amenities they're getting along with that
is the real value."
The Hard Rock units will come fully furnished and
will be integrated into a pool and resort area including
a spa and fitness center.
In conjunction with the condo units, the Hard Rock
will be adding four new restaurants, meeting space
and an entertainment hall that will replace the
Hard Rock's current venue, the Joint, which will
become a new casino extension. The project will
add about 20,000 square feet of casino space with
500 new slots and about 30 additional table games.
Thursday, the Hard Rock reported its highest revenue-generating
quarter in history and attributed much of the gains
to its Body English nightclub as well as higher
room rates and banquet business.
Food and beverage revenue was up 34 percent in
the second quarter, in part related to alcohol consumption
at Body English.
Business is booming at the club in spite of competition
from rivals such as Pure, a large and expensive
nightclub that recently opened at Caesars Palace,
executives said.
On the casino side, revenue fell 2 percent primarily
because of a decline in table-game revenue as gamblers
won more from the casino than a year ago.
Slot revenue was up 16 percent, attributed to a
more concentrated direct mail campaign to locals
and efforts to attract out-of-town gamblers.
The casino no longer courts the richest of high-rollers
and instead is attracting younger gamblers who are
lured by other activities at the resort, executives
said.
Hard Rock's exit from the Pauma deal marks the
second time a casino company has abandoned the tribal
project.
The tribe originally chose Caesars Entertainment
Inc. to develop and build a resort to replace its
small Casino Pauma. But those plans fell through
when Harrah's Entertainment Inc., which already
runs a tribal casino nearby, bought Caesars last
month. The tribe sued Harrah's, saying it was led
to believe that the acquisition wouldn't affect
the management contract.
|
