It’s appropriate that the Palms, which hosted the reality TV show “The Real World” and was a hangout for young celebrities and rock stars, has had its share of drama over the years.
Now, 15 years after it opened, the resort is facing midlife with new owner Station Casinos. Questions about its future resemble those a middle-aged man might ask himself: “What’s next in my career?” “What’s my place in the world?” And, “Can I still fit into those jeans I wore when I was 20?”
The Palms opened in 2001 and quickly became a celebrity hangout, with its mix of stylish restaurants and night spots. Management added a recording studio in 2005 and the Pearl, a music venue similar to the Joint at the Hard Rock, in 2007. TV shows and music videos were filmed at the hotel and at one point, Michael Jackson and his children lived there.
But while the new resort became known as a home for hip celebrities, George Maloof and family also had experience in the locals market. Before building the Palms, they owned the Fiesta on Rancho Drive.
And so under their direction, the Palms became something different — a resort that could attract young Strip visitors looking for something cool while still serving older locals looking for deals on slots and video poker.
When the Great Recession hit, neither demographic was enough to cover the resort’s debt, and the downturn forced Maloof and his family to cede majority ownership to a group of investors in 2011.
Fast-forward five years, and locals powerhouse Station Casinos decided to buy the Palms and began making changes almost immediately after closing the deal.
Palms Timeline
• 2000: Days after selling the Fiesta to Station Casinos, Fiesta President George Maloof strikes a deal with Station and the Greenspun Corporation to begin a yet unnamed hotel-casino targeted for completion in late 2001.
• 2001: The Palms stages a grand opening with Paris Hilton wearing a gown made of $1 million worth of gaming chips; 7,000 people attend.
• 2002: MTV films Season 12 of “The Real World” at the Palms, and today guests can still stay in the iconic Real World Suite.
• 2003: Britney Spears does a surprise show for 1,800 guests at Rain Nightclub.
• 2005: The MTV Video Music Awards are staged at the Pearl concert theater, the only time the show is in Vegas.
• 2005: Palms opens Fantasy Tower, home to some of the most expensive suites in the world. One night in the Two Story Sky Villa can go for $40,000.
• 2006: The Playboy Club opens.
• 2007: George Clooney, Brad Pitt, Matt Damon and many other A-list celebrities attend the world premiere of “Ocean’s Thirteen.”
• 2007: Michael Jackson records “Hold My Hand,” featuring Akon, in The Studio at Palms. Jackson lives in a Sky Villa for four months while recording.
• 2008: Palms Place opens. Six years later, the penthouse is listed for $38 million, making it one of the most expensive apartments in the world.
• 2009: The Fantasy Tower is the setting for part of Katy Perry’s music video “Waking Up in Vegas.”
• 2010: A dispute breaks out between Maloof and N9NE Group, which operates N9NE Steakhouse and Nove Italiano restaurants, as well as Ghostbar, Rain, Moon and Playboy Club nightclubs, and the Palms’ pool operations.
• 2011: George Maloof settles the dispute with restaurant and nightclub operator Michael Morton. Maloof takes over management of the entity that owns and operates N9NE Steakhouse, Ghostbar, Rain Nightclub, Nove Italiano, the Playboy Club, Moon Nightclub and the Stuff store.
• 2011: FP Holdings, a partnership between TPG Capital and Los Angeles-based Leonard Green & Partners, assumes ownership of the Palms. The Maloof family retains a small stake.
• 2011: Ghostbar DayClub launches.
• 2012: The Playboy Club closes.
• 2012: The Ivory Tower is remodeled.
• 2012: The Los Angeles Kings celebrate their Stanley Cup victory with a weekend in the Sky Villa while the Cup is on display in the lobby.
• 2015: The World’s Largest Hooters opens, boasting more than 15,200 square feet of space alongside the Palms Pool. It seats more than 500 guests.
• 2015: Chef Kerry Simon, owner of the restaurant Simon at Palms Place, dies.
• 2016: Station Casinos purchases the Palms for $312.5 million.
As of today, all of the Palms’ slots have been integrated into Station’s company-wide slot management system. Also, members of Station Casinos’ customer-loyalty program can now use their points at the Palms, and members of the Palms player loyalty program are part the Station loyalty card system.
Station executives are happy to discuss the work they’ve done to bring the Palms into the company fold, but they are not willing to make any grand announcements about the resort’s future.
“It’s a very large project,” said Michael Jerlecki, Palms vice president and general manager. “There are a lot of things we’re looking at. In terms of the physical structure, we are still in the design phase. There are lots of sketches and artwork. Hopefully in the first quarter of next year, we’ll make a few announcements.”
Still, you can get a feel for what might be happening by talking to Jerlecki about some of the specific work that’s been done at the Palms and also about how he views the resort and its customers.
In describing the place, he’s quick to point out some of the “cool” aspects of the property.
“The recording studio is one of top five in the country, and we still have many A-list artists visit us and do their work there,” he said. “The other asset we have that’s unique to Station is the Pearl concert theater. So having that in our fold now … allows us to continue to market to Palms locals and out-of-town guests.”
You won’t find a recording studio or a high-end music venue at the Fiesta or the Texas, Santa Fe or Palace Stations. Still, Jerlecki said, Station has had no qualms about investing in the studio or booking artists and events for well into the next year at the Pearl.
On the other hand, Jerlecki also boasts about amenities that might appeal more to locals, such as new chairs at the slot machines. “They might be the nicest slot chairs you’ll find anywhere in the country,” Jerlecki said.
And the buffet. “We’re taking the food quality up to what guests at a Station luxury brand expect — the quality a customer at Green Valley Ranch or Red Rock would expect — and we’ve lowered prices drastically,” he said.
And while those may seem like mixed messages, the references to Green Valley Ranch and Red Rock could be the strongest clue as to what Station has in mind for the Palms.
Although Station can and does operate lower-end properties, the success of those two higher-end resorts proves that company officials know how to offer luxurious amenities while also keeping price-conscious slot and video poker players happy.
“They have operated amenity-rich resorts — but not with a nightlife aspect like the Palms,” said Alex Bumazhny, a gaming analyst with Fitch Ratings. “So that’s somewhat unique and new to them. But they do operate Red Rock and also Green Valley Ranch, so they know how to operate assets with big hotels.
“They also have ideas to put new food and beverage outlets in there,” Bumazhny said. “So they have plans for the property maybe to make it a little more locals-friendly but probably keep the nightlife aspect of it as well.”
Bumazhny says that if any company can run a property appealing to both locals and Strip customers, it’s Station.
“They are two slightly different strategies for sure,” said John DeCree, a gaming analyst with Union Gaming Group. “You have a proximity to the Strip, and yet you’re still a little bit behind it, which makes it easier for locals to get there.
“During the week they can have a pretty consistent slot-club customer, but on the weekend, people from California come in for the nightclub and the table games. They are so close to the Strip, so in that way I can see how you can balance both strategies.”
Given the mix of artists scheduled for the Pearl — Blink 182, Weezer, Frankie Valli, Pat Benatar, Bonnie Raitt and others — maybe Station Casinos is looking to create a slightly more mature version of what George Maloof and his family opened 15 years ago. Kind of like Red Rock near the Strip?
“I would think so,” local gaming blogger Anthony Curtis said. “People think Station Casinos and maybe don’t realize it, but they know how to run upscale. ... You could put Red Rock on the Strip, and it would fit right in.
“What says something to me is that they weren’t going to change the name, and that told me they very much value the brand,” Curtis said. “The Palms still has a good brand. It’s a place that got itself on the map pretty solidly, and they’d be crazy not to take advantage of that brand recognition.”