Las Vegas Weekly

August 1, 2008 · 12:32 PM

Construction on Strip’s Echelon casino halted

By Robin Leach

Construction on the $5 billion Echelon resort casino planned by Boyd Gaming is halted as of today. The locally headquartered gaming corporation had planned the super-luxury project on the site of the old Stardust property that was imploded last year. Luxe Life told readers almost two months ago that the plans for the Hard Rock Hotel's parent, Morgans Hospitality Group, to build duplicates of two of their hip hotels -- the Delano in Miami and the Royalton in New York -- had been delayed due to equity market problems affecting loan financing.

Now this morning Boyd has released an official statement: "Due to the difficult environment in today's capital markets, as well as weak economic conditions, we have decided to delay our Echelon project on the Las Vegas Strip. Our present expectation is to resume construction in three to four quarters, assuming credit market conditions and the economic outlook improves."

Translation? Maybe the project will get underway again in late 2009 if financial market turmoil (and the not yet official recession) ends and returns to normal. Echelon is located next to Donald Trump's recently opened Trump International Hotel and across from Steve Wynn's new Encore resort opening in December or January.

Boy Gaming admitted it had spent half-a-billion-dollars to date on the venture!

A spokesman continued: "We are in discussions with Morgans Hotel Group and General Growth Properties to modify our existing agreements, as both joint venture parties remain interested in Echelon. The delay will allow our joint ventures with Morgans and GGP the opportunity to secure financing under more favorable conditions at a later date. It also provides additional time for our joint venture with GGP, the High Street retail promenade, to take advantage of an improved leasing environment, once economic conditions moderate.

"From the beginning, we strategically designed Echelon to be developed in a single phase, and this schedule adjustment allows us to preserve the holistic integrity of the project. By delaying, we will be able to better manage the timing of the construction of the wholly-owned aspects of Echelon and ensure that they do not outpace the construction of the joint venture components. This delay will also give us time to focus on restoring momentum in our core business, and for consumers in general, to regain their footing and confidence.

Keith Smith, President and Chief Executive Officer of Boyd Gaming, commenting on the decis ion to delay Echelon: "The current economic climate is unprecedented in recent years. While we remain enthusiastic about the long-term prospects for the Las Vegas market and Echelon, this is the right decision for our Company at this time. This decision is not a reflection of the merits of the project, nor the accomplishments of our professional development team, but rather the challenges we, and many other businesses, face in today's uncertain business climate.

"We remain fully committed to Echelon, and convinced that it will produce long-term, sustainable growth for our Company in the years to come. We look forward to resuming construction as soon as we are able to do so."

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