Station Casinos' Durango project to cost $750M, no plans yet for 3 closed venues
tation Casinos’ planned casino resort at Durango Drive is now estimated to cost $750 million, according to the company's executives. The development is expected to break ground in the first quarter of 2022, and will take 18 to 24 months to complete.
The hotel casino will cover 533,000 square feet, with 73,000 square feet of casino space for 2,000 slot machines and 46 table games. The venue will have 200 hotel rooms and suites, plus 21,000 square feet of convention and meeting space, as well as four full-service food and beverage outlets, reports Las Vegas Review-Journal. A state-of-the-art sportsbook and resort-style pool will also be among its amenities.
While executives are continuing to refine the construction budget, for now, it is expected to cost $750 million. This includes design costs, hard and soft costs for construction, pre-opening expenses, and financing costs.
The company intends to develop on roughly 50 acres, while the 23 back acres at Durango will be sold for the development of multifamily residences. The strategy could be replicated at some other venues where Station Casinos holds excess land.
“We’ll continue to look at each of the development sites in Vegas as we roll forward, try to build out the portfolio, double the footprint here in Las Vegas,” said Frank Fertitta, Station Casinos CEO. “We’ll take the heart of each of the properties and sell off the remaining real estate surrounding those development sites.”
The announcements were made in an earnings call by Station’s parent company Red Rock Resorts. Throughout the third quarter of the current year, net revenues increased 17% to $414.8 million, while net income was up 64% to $117.9 million. Moreover, adjusted EBITDA also increased, up 15% to $184.5 million.
During the call, it was further revealed Station Casinos currently has no plans to sell a series of casinos it owns and that have remained closed since March 2020: Texas Station Gambling Hall & Hotel, Fiesta Rancho Casino Hotel and Fiesta Henderson Casino Hotel.
According to Fertitta, they represented less than 10% of the company’s cash flow, even though they were one-third of the casinos. Instead, Station Casinos has migrated business to the six venues still operating. “That has resulted in the higher margins that we’re seeing — 49 percent for Las Vegas operations this quarter,” the CEO said, according to Review-Journal.
A fourth casino that also remained closed even after COVID-19 restrictions eased was Palms Casino Resort. However, it was announced back in May that the off-Strip property would be sold to the San Manuel Band of Mission Indians for $650 million: the deal is expected to close before the end of the year.
The company’s decision to shift focus to improving cash flow and existing operations delivered positive financial results throughout the quarter. Net revenues corresponding to Las Vegas operations were $412.7 million, up 29%, while Adjusted EBITDA was $197.9 million, a significant increase of 40% versus the same period of 2020.
