Station Casinos and its parent organization Red Rock Resorts (RRR) are finally divulging long-awaited details on its potential resort on South Durango Avenue at the 215 Beltway.
Stephen Cootey, executive vice president and chief financial officer of RRR, told investors this week that the company plans to break ground on the Durango project in the first quarter of 2022. While a total investment cost hasn’t been determined, initial plans include more than 100,000 square feet of gaming space, with over 2,000 slot machines and 40 table games.
Cootey said the to-be-named resort will feature a state-of-the-art sportsbook, as well as a 200-room hotel and four full-service restaurants.
Station Casinos has owned the 71-acre plot of vacant desert land since 2000. The 9/11 tragedies, Great Recession, and COVID-19 pandemic have impeded the casino firm from moving forward with development. But dirt will soon move, Station says.
Palms Leaves, Locals Key
Station Casinos is controlled by billionaire brothers Lorenzo and Frank Fertitta III. RRR, the Fertittas’ publicly traded holding unit, additionally owns a portion of Station.
Station Casinos dominates the local casino market in Southern Nevada.
The company tried its hand with the Strip market in 2016 by purchasing the Palms Casino Resort for $312.5 million. Station and RRR dumped another $690 million into the just-off-the-Strip complex. Amid dismal operating revenue, and then its mandatory closure in March of 2020 because of the coronavirus, RRR opted not to reopen the property, and instead put it on the market.
Station found a buyer in the San Manuel Band of Mission Indians. The $650 million sale was deemed a credit positive for Station by Moody’s Investors Service. The ratings firm said the Palms disposal strengthens Station’s balance sheet, and allows it to focus on what it does best: cater to locals.
Station’s Durango project site is five miles from the nearest current casino in operation.
Our primary focus right now has really been on Durango, which we think is a great development opportunity in the most underserved part of the Las Vegas Valley,” Frank Fertitta III said this week.
Gaming analyst Joseph Greff of JPMorgan said in a note that Station’s Durango project will likely be in the neighborhood of $400 million. He says the investment is warranted by the immediate surrounding area featuring a “high-income population base.”
Cootey explained that Station Casinos’ goal is to begin work on the Durango undertaking sometime in January, February, or March of 2022. Once construction begins, the company believes it will take 18 to 24 months for the resort to be finished.
On that time line, the earliest the Durango casino could open would be in July 2023. The worst-case scenario, per the current project schedule, would be in March of 2024.
Cootey believes Station Casinos’ future is bright because of its superiority in the Las Vegas locals’ market.
“We believe that we are uniquely positioned to capitalize on the very favorable long-term demographic trends and high barriers to entry that characterized the Las Vegas locals’ market,” Cootey concluded.
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