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Long-Delayed Las Vegas Strip Project Is Back on Track

TheStreet logo TheStreet 8/11/2022 Daniel Kline

Many thought this major Las Vegas Strip development was dead, but it has roared back to life.

The pandemic killed a lot of investment and construction projects around the country -- but not in Las Vegas. 

When covid shut down the Las Vegas Strip, Caesars Entertainment (CZR) - Get Caesars Entertainment Inc. Report and MGM Resorts (MGM) - Get MGM Resorts International Report kept moving forward with huge projects -- including Caesars revamping and rebranding Bally's and MGM effectively trading Mirage for Cosmopolitan.

Nor were Las Vegas's biggest players the only ones keeping busy during the dark days of the covid pandemic. 

The massive MSG Sphere, a unique performance venue -- literally a 366-foot-high steel sphere that will be covered with about 580,000 square feet of programmable LED panels, forming the largest LED screen on Earth -- also moved forward.

The pandemic also saw the opening of Resorts World Las Vegas and major projects at Circus Circus and the Tropicana beginning its own revamp. 

In addition, Fontainebleau Las Vegas, a project that had been in the works since 2005 under a variety of different owners, improbably moved forward and looks set to open in late 2023.

Fontainebleau's reemergence gave hope to every idea on the Las Vegas Strip that sat unfinished or had never gotten off the ground. 

Now, a big project that was announced in October 2021 has gone from dormant to back on track.

Image source: Flite Golf © Provided by TheStreet Image source: Flite Golf

Atomic Range Golf Coming to the Las Vegas Strip  

Las Vegas has become a city about doing things very big. 

An key example: the partnership between Flite Golf and the Strat Hotel and Casino. The two intend to partner on Atomic Range, a huge golf entertainment destination that will be built on seven acres of Golden Entertainment-owned land adjacent to hotel/casino on Las Vegas Boulevard.

Strat Owner Golden Entertainment (GDEN) - Get Golden Entertainment Inc. Report "will share in the gross revenue generated by Atomic Range under a lease arrangement," according to a news release.

When the project was first announced in 2021, it was expected to cost $70 million.

A ceremonial groundbreaking (no ground was actually broken) took place Aug. 8 at the site. The Atomic Range facility will be a 99,000-square-foot, four-story facility with 103 separate hitting bays, six bars, 10 putting bays, an Astrocade multiuse area, and meeting space.

“Las Vegas is at the heart of the entertainment industry, and we are ecstatic to break ground on our flagship location on the Vegas Strip," Flite Golf Chief Executive John Vollbrecht said. 

"Flite’s Atomic Range will give guests an experience that redefines the golf entertainment industry and sets a new standard for active entertainment destinations,” 

The Strat Has Struggled

With its location at the very end of the North Las Vegas Strip -- it's a bit isolated -- Strat has to make itself a destination. That has improved with the growth of new developments on the North Strip, including Fontainebleau and Resorts World, but the Strat has struggled while Caesars and MGM properties have largely bounced back from their pandemic woes.

"In June, supply chain issues with our linen provider forced us to hold back significant room night inventory, limiting occupancy primarily at The Strat," Golden Entertainment Chief Financial Officer Charles Protell said during the company's second-quarter earnings call

"We estimate this cost us over 15,000 room nights and $2 million to $3 million of Ebitda at fhe Strat during the second quarter."

The company has since changed its linen supplier.

Protell does expect the property to recover.

"Given our occupancy limits during Q2 at The Strat, we were unable to capitalize on increasing citywide midweek group business as much as we would have anticipated" he added. 

"We're still missing 20 points of occupancy at The Strat relative to our 2019 levels, which offers material upside for the business as the segment continues to recover."


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