Winner Takes All

by Christina Binkley

  Sirio Maccioni, restaurateur of the famous New York Le Cirque, was there despite his anger that Wynn had hired away twenty-two of his people, including the chef. “For his opening, I wasn’t going to go, because you don’t do that,” said the old-world restaurateur. “But they explained to me that’s what happens when they open a new restaurant. [So] I told him, ‘When you took away twenty-two people, you did me a favor. Because the young people who stayed, they’re fresh and ready. The older people were getting tired. The chef was getting presumptuous.’”

  The night was billed as the “international premiere” of poor Le Reve. An hour into the show, Barry Sternlicht, who had sold Wynn the Desert Inn, peered down into the greenish glow of a wireless e-mail device. It illuminated his seat for much of the rest of the show. His wife appeared to sleep on his shoulder. Sternlicht looked up once as a topless female performer did a brief, melancholy dance.

  A few seats down, newlyweds Donald and Melania Trump chatted and gazed around the audience in a sea of empty seats. The Wynns had quietly warned their friends to avoid seeing Le Reve. “Go have a nice dinner. It isn’t ready,” Elaine Wynn told them.

  Several months later, she exclaimed, her azure eyes wide, “Thank God it wasn’t the centerpiece of the entertainment for the gala. We had Hugh Jackman.”

  Wynn Resorts’ president, Ron Kramer, ate breakfast the next morning at Tableau in the South Tower. This had been Kramer’s first casino opening, and he had been so excited the night before that he took photos of the crowds taking photos of Wynn.

  Kramer estimated that 40 percent of his net worth was invested with Wynn. He had not moved from New York when he took the job, but he’d wanted to be “part of creating something” after the terror attacks of 9/11. Kramer had been in a downtown conference room staring out the window at the World Trade Center when the first plane crashed into it. “I saw the planes hit,” Kramer said, his eyes reddening. He continued in a staccato voice, “My anger. From that. Has not. Dissipated.”

  He changed tracks. “Wynn Resorts is considered one of the premier companies in the resort industry. We got our first dollar of revenue less than twenty-four hours ago,” Kramer said proudly.

  As he spoke, the fat fellow from the previous night scooted by in his wheelchair, his tube socks now gray with filth. Headed toward the baccarat salons, he held a Budweiser between his thighs.

  At the other end of the Strip, Jim Murren and Glenn Schaeffer were finally closing the MGM Mandalay deal that would briefly make Kerkorian the biggest casino owner in the world.

  A “war room” for lawyers, bankers, and support staff was set up in one of Bellagio’s big spa suites. Jim Murren’s eldest son, Jack, who was nine years old, was off from school that day, so Murren brought him along. Jack wore a jacket and tie.

  Schaeffer and Murren’s friendship had continued to propel their careers over the ten months since their dramatic agreement. Instead of riding off to his homes in Taos, Los Angeles, and New Zealand, Schaeffer had landed his shot at being a CEO. He had joined Fontainebleau Resorts, a start-up venture that would have two flagships: the Fontainebleau Hotel in Miami—a Morris Lapidus–designed midcentury resort—and a new extravaganza on the Strip to the north of Wynn Las Vegas that Schaeffer would be responsible for developing. “My building—it won’t have my name on it—is going to be great architecture,” Schaeffer said. “It will be sexy. It will be different. It will be quiet. It will show people something they haven’t seen before.”

  As the party geared up at the Wynn, the Mandalay deal officially closed. Schaeffer was feeling melancholy. He stopped off at Piero’s Trattoria for a drink. “It was a humbling day,” Schaeffer said. “I had no idea it would be so emotional.”

  Schaeffer’s eyes were slightly bloodshot. He wore a black zip-front sweater and gray pants—his minimalist uniform. As he rested his elbows on the bar, he swallowed.

  That afternoon at the closing of the deal, Ensign had walked into the room. “Come here,” he said, and kissed Schaeffer on his right ear.

  “I love you,” Mike Ensign said.

  “I love you too,” Glenn Schaeffer replied.

  “You’re my son,” Ensign said.

  Hours later Schaeffer was still overcome. “I’ve been a wreck ever since,” he said, leaning on the bar. “He’s the best executive I’ve ever worked for. I’m going to tell him that. He came through for me, and I’m going to do the same for him.”

  Shaeffer’s fingers stroked his wineglass, his face enveloped in emotion.

  “He told me he loved me.”

  Chapter Twenty-seven

  META-VEGAS

  Ladies and gentlemen, Elvis has left the building.

  —AL DVORIN, ELVIS PRESLEY ANNOUNCER

  The Las Vegas barons were forever spying on one another. It wasn’t just an extraordinary coincidence that Kirk Kerkorian and Steve Wynn announced their next megacasino resorts within days of each other in the spring of 2004.

  Kerkorian’s concept had been studiously assembled by architects and city planners over months of secret effort. Wynn’s was largely in his head.

  Hedge funds, banks, and other investors were flush from an extended economic boom. These Wall Street decision makers were rich and readily influenced by the new Vegas cool. Moreover, they needed to park huge tranches of cash. Casinos offered a sweet deal: big construction projects that promised ripe cash returns.

  Thus, well-connected casino operators were raising billions of dollars of capital to build casinos that dwarfed Wynn Las Vegas’s cost of $2.7 billion. As the prices of steel and concrete soared in the United States—a global outcome of China’s economic boom—Las Vegas saw the starting price of a new casino more than double to $2 billion in just a few years.

  It’s hard to imagine that a tycoon wouldn’t be satisfied with controlling half of the Las Vegas Strip. But Kerkorian’s architects were already drawing up plans for all the new land he had acquired. It was to be the biggest privately financed development in the world, which they called CityCenter.

  Themed resorts were history, but this new one was to have a futuristic urban milieu. The construction cost: $7.4 billion (excluding the land value) for a mass of high-rises that Loveman wryly dubbed Kerkorian City.

  Kerkorian hadn’t built a resort of significance in fifteen years, and this one wasn’t his idea. But CityCenter grew from his seed and he loved it like an expectant father whose chest swells proudly as his wife’s belly grows. “He knows it’s transforming the city,” said Jim Murren, MGM Mirage’s president.

  The concept was Murren’s inspiration—the same idea that had caused him to approach Glenn Schaeffer about buying Mandalay Resorts: a city within the city of Las Vegas. Its sixty-six acres amounted to an area larger than New York’s Times Square, SoHo, and Rockefeller Center combined, and it would be packed nearly as densely. It was set to open in late 2009, with four hotels and residential towers and 6,800 rooms, suites, and condos. The primary 60-story CityCenter Hotel would have 4,000 rooms and suites. A Mandarin Oriental luxury hotel and three other projects called the Vdara, the Harmon, and Veer Towers would contain another 2,800 hotel rooms, suites, and even condominiums.

  Billed as “a place to live—and live it up as never before,” CityCenter suggested that the Las Vegas Strip would evolve into a place where people might want to live full-time.

  Condo buyers were pitched on living like high rollers. They were promised all manner of VIP invitations to concerts and boxing matches and automatic entry past velvet ropes. When a Middle Eastern casino customer agreed to buy forty-two condo units for himself and his entourage in December 2006, Terry Lanni, MGM Mirage’s chief executive, rewarded his $60-million purchase with permanent privileges to golf at Shadow Creek. It was the first exception Lanni had made to the Shadow Creek “guests only” rule.

  Kerkorian didn’t try to screw with Wynn’s winning formula. People might have wondered if there was room for yet another surrealistic Cirque du Soleil show in Las Vegas, but Kerkorian s
igned up. The French-Canadian group agreed to create a show that would appeal to the aging baby boomers who are expected to be Las Vegas’s primary spenders for the next twenty years.

  None other than the King of Rock ’n’ Roll was expected to return in November 2009 with a posthumous “Elvis Experience,” involving live musicians, singers, dancers, and the best that multimedia technology could accomplish to reincarnate a long-dead star. The show was announced during “Elvis Week”—a time set aside by fans to commemorate the singer’s untimely August 16, 1977, passing.

  Murren’s original concept for an open-air shopping district—so SoHo-like that MGM executives took to calling it SoBella, for “South of Bellagio”—was killed in favor of climate control. Planners feared that visitors would be unwilling to walk through the desert heat as they shopped at Chanel and Louis Vuitton. “We’re creating our own urban environment,” Murren said—albeit an air-conditioned one.

  Murren was CityCenter’s financial architect, but Kerkorian lacked an artistic creator, so he hired the best and most expensive. For the first time, renowned architects were vying to work in Las Vegas.

  They included Daniel Libeskind, whose wacky rectangular eyeglasses had entered the American mainstream a few years earlier when he submitted plans to rebuild the World Trade Center site. Cesar Pelli, whose work includes the world’s tallest buildings—the Petronas Towers in Kuala Lumpur—was the lead architect on the main casino and 4,000-room hotel. New York–based Ehrenkrantz, Eckstut & Kuhn Architects, the architects responsible for the Battery Park City esplanade in New York and the Baltimore Inner Harbor East, initiated the master planning—the linking of the hotels, residences, shopping, and other elements. Adam Tihany would design the luxury hotel; Sir Norman Foster, a Pritzker Architecture Prize–winner, was to design the exterior of one of the boutique hotels; David Rockwell was brought in for the retail areas.

  The futuristic result seemed fit for Dubai or Tokyo. The shopping district was a collection of tentlike planes juxtaposed against angular high-rise towers. Executives at MGM Mirage felt CityCenter was moving Las Vegas into the realm of major cities.

  Steve Wynn snorted at their aspirations—Las Vegas did not embarrass him—as well as the heavy-hitter architects. He boasted that he did his own in-house design without paying fees to people with egos as big as his own. In fact, Wynn proved correct in his prediction that others would start building crescent-shaped towers like the Wynn’s. One of the first was CityCenter’s 1,500-room Vdara Hotel.

  Wynn called CityCenter “the most revolutionary idea I’ve seen—to create Times Square.” It wasn’t a compliment.

  “I don’t believe in it,” Wynn continued one afternoon, clad sleekly in a black Wynn-logo golf shirt and white pants. “The most expensive real estate in New York is not Times Square. They sell CD’s there. People don’t get on a plane to go to Times Square. I’ll take Central Park South any day. The human scale of Madison Avenue.”

  Cantankerous, Wynn wiggled his eyebrows and slyly hedged his bets. “But I want to understand, because I can do it too!”

  Blindness be damned, Wynn went skiing that winter and popped a ligament in his knee—just standing on his skis and turning the wrong way. During three weeks on crutches, he told colleagues it was the most painful surgery of his life.

  He was struggling to get Wynn Las Vegas right. The La Bete nightclub had been a stinker—failing to draw attractive young women who could lure male customers. Wynn fired the manager and brought in a new nightclub operator who created the more successful Tryst.

  As Gary Loveman’s reaction on opening night suggested, Le Reve turned out to be an even stickier mess. The show played to a sea of empty seats night after night. Wynn was forced to break his contract with his friend Franco Dragone and remake the show. The improvement might have played well in many cities, but in Las Vegas, it just didn’t stand out against Cirque du Soleil’s productions elsewhere. Wynn and Cirque had already done the water theme, after all, with O at Bellagio.

  Rather than leading Las Vegas entertainment, Wynn found himself the bargain-priced entertainment option. Tickets to O, KÀ, and Love ranged as high as $165 in early 2007. Wynn could garner only $119 for a ticket to Le Reve—about 40 percent less than Kerkorian was getting at Bellagio, MGM Grand, and the Mirage.

  Similarly, the Broadway show Avenue Q had been a hit in its small New York theater, but it played to half-full houses in its big 1,200-seat Las Vegas venue. Wynn had been so tickled with the racy Muppet-esque takeoff—he even kept a Steve Wynn puppet in his office. But he finally threw in the towel and closed the show. He announced a deal to bring in Monty Python’s more populist Spamalot in 2007.

  “Yeah, we blew it,” said one senior Wynn executive. “Can you imagine how great things would be if we’d got the entertainment right?”

  Still, much ended up just as Wynn had planned. Fashionistas and the moneyed flocked to the Wynn, helping it maintain the most expensive rooms in Las Vegas. Bellagio, less fashionable but bigger, cost a hundred bucks a night less.

  Yet Wynn needed a bigger place to compete. He had assembled around the resort more developable land than Kerkorian had. With 250 acres, Wynn was planning a resort spread among gardens and a lake from the same well of inspiration he had dipped into before. Just a few days before Kerkorian’s CityCenter was announced in the fall of 2004, Wynn said, “If I talk about it, it’ll sound a lot like Walt Disney talking about Epcot.”

  It turned out that the $22 million he spent on the Tom Fazio golf course was just a temporary placeholder, reserving the spot for a number of waterfront resorts. “Not high-rise. Medium-rise,” Wynn said. He would “create a pedestrian village where you walk, where there’s stores and shopping in a beautiful environment with no cars.” He would build right up to the edge of the Las Vegas Convention Center at the back of his property and haul in conventioneers in shuttle buses, offering them his goodies before they managed to set foot onto the Las Vegas Strip.

  In the center of it all would be Wynn’s boyhood lake, only better—with water-skiing and a boardwalk leading to the hotels. “I’m going to fix it up so you can look from the convention center into the lake,” he said.

  The precursor to all this was Encore, a second $2.1-billion high-rise tower on the Strip with 2,034 huge hotel rooms—1,030 square feet with a 230-square-foot bathroom. His aim was to draw “suite” people. “Remember, when I fill rooms with suite customers, I get a higher-spending customer,” Wynn said.

  The name Encore was Elaine Wynn’s idea. “It was a working title, and it sort of stuck,” Wynn said. “This is for my grandchildren,” he said with great cheer. When Ron Kramer sewed up all the financing for Encore a few weeks later, Wynn was so tickled he could hardly sit still. “One of the best days of my business life,” Wynn shared in somewhat of an off-color way. “I feel like a kid who has to go to the bathroom.”

  He crowed, “We went out for a billion dollars. We were triple over-subscribed. We did one-point-three billion, six and five-eighths percent, ten-year, non-recourse to the parent.” What’s more, he’d put in more of his own equity and got the bonds upgraded from the humiliating junk status. “We are in fan-ceee shape!

  “I never had a day like this in twenty-seven years at Mirage Resorts. I’m done. If I get hit by a truck tomorrow, we are a fucking institution!” Wynn said, once more the king. He planned to celebrate in Sun Valley. “This is going to be the best vacation ever! I’m going skiing!”

  Before hanging up the telephone, Wynn couldn’t resist taking a swipe at his rival at the Venetian. Sheldon Adelson had recently taken the Las Vegas Sands, the Venetian’s parent company, public.

  The seventy-two-year-old Adelson, who was a diabetic and disabled, blamed Wynn for troubles he’d had financing the Venetian in the late 1990s. Several years later, as Adelson sold his public offering, potential investors became inexplicably and suddenly concerned that he might die before completing the Sands development plans. Adelson was infuriated by the awkward rumo
rs and insisted that his health was fine even if he needed help walking.

  Unlike Wynn’s difficult offering, though, Adelson’s was perfectly timed to take advantage of the booming interest in stocks and Macao, where his second resort would be built. The public offering vaulted him to the fourteenth richest person in the world, according to Forbes in 2006, at a worth of $16 billion.

  Yet Wynn took a moment to pity Adelson that afternoon. “It’s too bad he’s not in better health and able to enjoy it more,” Wynn said cunningly. “He’s in a wheelchair.”

  As Kerkorian’s stake in Las Vegas grew, his circle of friends shrank. Fred Benninger, the man who had developed all three of Kerkorian’s first hotels, died in February 2004 at the age of eighty-six. George Mason, sick with cancer, worked right up to his death in October 2005 at the age of seventy-four. Walter Sharp, who had variously served Kerkorian on the boards of MGM Mirage and the MGM movie studios since the 1970s, died two months after Mason at the age of eighty-nine. Kerkorian’s old friend and corporate caretaker James Algian died of cancer in April 2007, having worked up until the day of his death.

  Mort Viner, an old friend of Kerkorian’s who was once Dean Martin’s and Jimmy Stewart’s Hollywood agent, dropped dead on a fine June Sunday in the midst of his notoriously competitive tennis game with Kerkorian. “You’ve got to say there’s something extraordinary about someone who will play tennis to the death,” said Dan Lee, Wynn’s former chief financial officer, when he heard about it.

  Kerkorian, at eighty-seven, was becoming more stooped and was losing his sight to macular degeneration. He was deaf in one ear. Yet no one wanted to suggest publicly that he wouldn’t live forever. Not even Steve Wynn. “He’ll live to a hundred and forty, and he’ll still look the same,” Wynn said.

  Privately, people in Las Vegas wondered what would become of Tracinda and Mirage Resorts when Kerkorian died. Outsiders gossiped about Kerkorian’s estate planning. “Kirk’s not going to live forever. And nobody knows if there is enough money to pay the taxes,” said one Las Vegas casino developer.