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Jun. 20, 2007
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STRIP DEVELOPMENT: Echelon gets off to cool start

Under air-conditioned tent, officials unveil project details

By HOWARD STUTZ
REVIEW-JOURNAL

ECHELON FACTS

Cost -- $4.8 billion

Hotel Echelon -- 2,300 rooms

Suites at Echelon -- 650 rooms

Shangri-La Las Vegas -- 353 rooms and suites

Mondrian Las Vegas -- 860 rooms

Delano Las Vegas -- 550 rooms

Casino -- 140,000 square feet

Retail -- 300,000 square feet

Entertainment -- 4,000-seat and 1,500-seat theaters

Meeting and convention space -- 750,000 square feet

Dining and entertainment -- More than 30 venues

Size -- 87 acres

Opens -- Third quarter of 2010

SOURCE: BOYD GAMING CORP.

From left, Robert Michaels, Bill Boyd, Keith Smith and Giovanni Angelini shake hands Tuesday at the groundbreaking for Echelon.
Photo by John Locher.

A decade ago, Boyd Gaming Corp. executives put aside plans to redevelop the company's Strip land holdings in favor of moving forward on an opportunity to build a hotel-casino in Atlantic City.

On Tuesday, the Strip became the company's foremost priority.

Boyd Gaming unveiled details and renderings for the $4.8 billion Echelon, which will have five hotels surrounding a multiuse resort destination on 87 acres, much of which once housed the now-imploded Stardust.

Instead of a formal "shovels-into-a-pile-of-dirt" ground-breaking, Boyd executives kept several hundred guests out of the 100-degree temperatures and inside an air-conditioned tent on the Echelon site. Construction officials, with Boyd Gaming leaders and representatives of the company's joint venture partners watching, shattered a sheet of black glass that hid a 1,000-pound Echelon cornerstone.

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It is expected to take about three years to build Echelon, with an opening planned in 2010.

Boyd Gaming Chairman Bill Boyd said he's glad the company waited on Echelon.

"It was impossible to do both projects at the same time, so we chose to move forward in Atlantic City," Boyd said. "We made the right decision."

Boyd Gaming opened the Borgata in 2003, and it has become Atlantic City's swankiest upscale resort. The project also answered Wall Street's questions of whether Boyd Gaming could build a multibillion dollar hotel-casino.

"We have as much experience as anybody in the market today in developing and building hotels," Boyd Gaming President Keith Smith said. "I think we've answered our critics."

The Las Vegas landscape 10 years ago was much different than today's building culture. Boyd now believes that if the company had moved forward on the Stardust site back then, the project would have been on a much smaller scale.

"The time that we took allowed for our company to build a much greater foundation," Boyd said. "We can see there is a demand for this type of project now and we believe the demand will be there when we're ready to open.

Boyd initially announced Echelon 18 months ago. During the time, joint venture partners were added and site, originally 63 acres, expanded by 24 acres through a land swap with Harrah's Entertainment. About 22 acres of the Echelon site will be saved for future development.

Meanwhile, the costs of project also grew by almost $1 billion.

Echelon's five hotels will all have separate entrances and lobbies. But the entire development, including the 140,000-square-foot casino, the meeting space and retail promenade, will be interconnected. A guest, conceivably, could walk the entire facility without ever venturing outside.

"The idea was to create different experiences and environments for the guest," said Echelon President and Chief Executive Officer Bob Boughner, who is overseeing the project. Boughner, a longtime Boyd Gaming executive, headed construction and development of Borgata before heading back to Las Vegas last year.

Boyd Gaming will operate two of the hotels on the Echelon site, the 2,300-room Hotel Echelon and the Suites at Echelon, which will be a 650 all-suite hotel.

New York-based Morgans Hotel Group is placing two of its brands at Echelon in a 50-50 joint venture with Boyd Gaming, the 860-room Mondrian and 550-room Delano. Morgans, which bought the Hard Rock for $770 million in February, will operate its two hotel brands and the restaurants associated with the hotels.

"We've been looking at this market for a long time and we probably should have been here sooner," Morgans Chief Investment Officer Marc Gordon said. "Our customers have been coming here and staying at other hotels. Soon, they will be able to stay at one of our hotels and we'll connect into the other amenities offered by Echelon. Our guests will be able to get the benefits of all that."

Hong Kong-based Shangri-La, which has built hotels through Asia and the Middle East, recently entered the North American market with properties in New York, Chicago, Miami and Vancouver, British Columbia. The 353 rooms planned for Echelon will be the company's largest single property, but small by Las Vegas standards.

Giovanni Angelini, the CEO of Shangri-La, said the company's loyal Asian customers will follow the hotel company to Las Vegas, especially for Echelon's casino, the retail aspect, and the city's vast offerings of championship golf courses.

"We believe that we will help grow the market and bring our good customers to Las Vegas," Angelini said.

AEG Live, which runs the Staples Center in Los Angeles, will operate Echelon's two entertainment venues, a 4,000-seat theater and 1,500-seat performing center. General Growth Properties, which already operates three Strip shopping centers, will manage the 300,000 square-foot Echelon retail promenade.

Smith said a concept during the development was to bring some first-time joint venture partners to Las Vegas.

"We wanted to bring experiences here that don't exist today," Smith said. "We think that was accomplished."

Boyd Gaming broke down the costs for Echelon as $3.3 billion for the two Boyd hotels, the Shangri-La, the convention space, casino and other related amenities. The two Morgans hotels will cost $950 million while the retail site with General Growth Properties has a $500 million budget.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: alan berk wrote on July 04, 2007 07:06 AM: 25 year resident of las vegas! People complain about the congestion but don`t change their lifestyle! Congestion on the freeways is caused by the locals and not the tourists! this town was built for the tourists - so we should do everything in our power to continue to make this a place for tourists to comea and visit! over hyped and over built- when are people in this town going to rebel against the summerlins and the anthems! Why are those house so expensive!? I am not anti-gorowth just Anti- stupidity Gee how smart is it live in a place like Mountains edge and complain about blue-diamond or the traffic on I-15 If you live in summerlin - your the problem that u.s 95 is a parking lot! Foreclosures are an epidmeic in Las Vegas- Why is there a new housing tract being built anywhere There are 25,000 homes for sale - are they all rat infested and not worth living in! The strip is having a huge redevelopment boom -just think how much less congestion - traffic and pollution there would be if all of these workers lived within 20 minutes of their job There are thousands of houses already built that they could live in. Until there is complete gridlock - i don`t think las vegas will change - or maybe 4 dollar a gallon gasoline DHS wrote on June 20, 2007 08:02 PM: I thought it was to be 5300+ rooms, but the sidebar indicates 4713 rooms. Anything missing, or have plans changed? BTW, I follow the real estate market articles (listed at lvrj online) pretty closely in LV...what about that area just east of UNLV? (Just kidding) Joe Gelman wrote on June 20, 2007 05:32 PM: That's a terrible headline. Echelon is not off to a "cool start" in any business sense (and this is the business sections). If this was the entertainment section I would think "cool" as in "hip". If this was the weather section, I would think "cool" as in temperature. In the business section "cool" usually means "negative" and that is an unfair and misleading description of Echelon... which promises to be a steaming hot project! Vegas Man wrote on June 20, 2007 04:28 PM: Alan, read your posts here and elsewhere...cant tell if you are a realtor trying to sell locations, or just one of the long term residents of LV who is sick and tired of the hype and developers pushing their own agenda of high priced properties that in fact noone can afford...thus the subprime meltdown...Tell us alttle about yourself...and what you are really trying to say...I dont think you are really anti growth...after all LV was built on booze,broads, and gambling...take that away and this town would be a test site for biological warfare agents...I myslef am retired and former businessman...30 year resident and I can tell you that the last ten years have been a sad commentary on individual and corporate dishonesty and greed, overhyped land development and more political corruption of local political officers who are selling their souls for a buck, than when the mob ran the town! David wrote on June 20, 2007 08:05 AM: Alan give it a rest. It's the same thing everyday. We get it you're lazy and don't like growth. The reality is not all of the 200,000 strip workers want to live so close to the strip. Great for you, you love your neighborhood. We get it. alan berk wrote on June 20, 2007 06:05 AM: i can only hope that the workers for this project will be smart enough to live close by and not add to the traffic and congestion by commuting form places like mountains edge or summerlin!? How many thousands of homes aare within a 20 minute drive to this project! any home along Harmon down to boulder hi-way would meet that criteria! Sunset and Sandhill would be a possibility the nicest area in las vegas is Paradise crest just 15 minutes from this project! i wonder how many of the really rich people in las vegas know about viking between pecos and Sandhill! is all of that Traffic and congestion worth it p wrote on June 20, 2007 05:55 AM: no new casino's-hotels-resorts miss the "old Las Vegas"