Red Rock Resorts, also known as Station Casinos, revealed that it has struck a deal with a San Manuel Band of Mission Indians’ subsidiary (San Manuel) to sell the Palms Casinos Resort. The agreement encompasses all the components within the casino and hotel, including restaurants, movie theater, etc., and the neighboring Palms Place condominiums.
The company has stated that the sale of the Palms will generate $650 million in cash for them. The transaction, as usual, is subject to adjustments and will need regulatory approval. The closure of the sale is expected to happen in late 2021. The casino has remained closed since the onset of the pandemic.
The company announced the sale of the Palms just hours before reporting its earnings for the first quarter of 2021.
Palms became a Station Casinos property in 2016
In 2016, Station Casinos acquired Palms for $312.5 million. The company invested over double this amount to refurbish and improve the property located close to the Vegas Strip. The total investment in Palms exceeded a billion dollars for the company, taking into account the $690 million spent on renovations in addition to the original purchase price.
The extensive alterations to the property initially stirred excitement in Palms. However, this excitement was short-lived. Jon Gray, the General Manager, stepped down in October 2019. Not long after Gray’s departure, KAOS, the dayclub and nightclub worth millions of dollars, shut down.
Station Casinos reconfigured the club and pool area for unique events. However, the new space was short-lived. In line with all other Nevada casinos, Palms shut down in early 2020 to aid in reducing the spread of coronavirus.
Palms has been closed since March 2020
Properties of Station Casinos reopened in stages, but Palms wasn’t included in the initial reopening phase. This left the future of Palms as a Station Casino uncertain.
In a 2020 earnings call, the company revealed that approximately 80% of its income comes from the properties that have been reopened. Last year, the following Station Casinos properties were reopened.
- Green Valley Ranch
- Red Rock Casino
- Palace Station
- Santa Fe Station
- Sunset Station
- Boulder Station
Texas Station, Fiesta Henderson, Fiesta Rancho, and Palms never reopened.
The company asserts that there were no plans to sell Palms before the coronavirus-induced closure. This week, Station Casinos shifted its attention from Palms to its other profit-generating establishments. There has been no announcement from Station Casinos about reopening the other closed casinos.
Durango Station plans coming soon
The cash influx from the Palms sale will assist Station Casinos in revisiting their construction plans for Durango Station, located near I-215. The company asserts that this is the finest piece of land it owns in Las Vegas.
The company is still finalizing the plan for Durango Station and honing in on their desired creation. The plans for Durango Station are expected to be disclosed later this year.
During its earnings call, the company provided some information about Durango Station. It appears that it will not be developed into a mega-resort. Instead, Station Casinos will prioritize areas that generate the most income for the company.
Durango Station will feature slot machines, table games and a variety of restaurants. However, it’s worth noting that there will be no buffet at Durango Station.
Construction on the Durango Station project will not begin until 2022 if Station Casinos decides to proceed with it.
San Manuel will soon enter Nevada
The San Manuel tribe is expected to finalize the purchase of Palms from the San Manuel Gaming and Hospitality Authority before the end of the year. This will make them the second Native American tribe to enter the Nevada gaming industry this year, following the Mohegan Sun, which manages the casino at the newly launched Virgin Hotels Las Vegas.
San Manuel, which has been running a casino in Highland, CA for 35 years, has made a significant step forward.
“Today marks a significant milestone for the Tribe and its ongoing strategy for economic diversification,” stated Ken Ramirez, San Manuel Chairman. “As representatives of the Tribe, we are grateful for the chance to become part of a community that we have grown to understand and value.”
San Manuel has been preparing for its Las Vegas debut for several years. In recent times, the firm has donated to a range of non-profit organizations and institutions in Las Vegas such as UNLV’s William F. Harrah College of Hospitality, William S. Boyd School of Law, the Public Education Foundation, and Shade Tree Shelter.
In 2019, San Manuel became a founding partner of Allegiant Stadium and the Las Vegas Raiders, aligning itself with the likes of Caesars and MGM Resorts.
What to expect at the new Palms
San Manuel has not yet revealed specific plans for Palms. However, they do intend to incorporate Palms into their family of casinos. SMGHA Chairwoman Latisha Casas expressed the board’s belief that many loyal guests of San Manuel Casino would find enjoyment in the Palms casino resort.
It seems that San Manuel is preparing to connect its Club Serrano Rewards program with Palms. San Manuel Casino in California is highly engaged in promotional activities. At present, the casino provides up to $1,000 for new members of the rewards club.
San Manuel should not have to undertake extensive renovations at Palms, considering Red Rock Resorts already spent nearly $700 million on refurbishments. However, some changes can be expected from the property, which closed in 2020.
New sportsbook operator and restaurants for Palms?
William Hill, now owned by Caesars, has purchased CG Technology which previously ran the sportsbook inside Palms. It would not be unexpected to see a new third-party sportsbook operator at Palms.
New restaurant brands are encouraged to establish their presence in Palms. For instance, San Manuel’s Rock & Brews could comfortably fit into one of the existing restaurants at Palms. Additionally, the coffee shop under the brand name of Station Casinos Lucky Penny will also be undergoing a name change.
Celebrity chef restaurants, including those from Bobby Flay, Marc Vetri, and Michael Symon, may not reopen. Flay recently opened two new establishments at Caesars Palace, while Vetri has assumed control of the Italian restaurant at Red Rock Casino.
Also, don’t anticipate seeing the artwork that was exhibited at Palms, as it was owned by the Fertitta family who run Red Rock Resorts.
A representative from San Manuel informs PlayNevada, “We’re unable to disclose specific details regarding leadership and operations until licensing is finalized. However, we intend to provide updates as we progress through the process.”
Keep watching, there’s more news on the way for Palms and Durango Station.
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