In 2009, Anthony Marnell III opened the M Resort in the Henderson desert, bringing a stylish hotel to the outer edge of the valley as the economy crashed around him.
“We all knew we were in trouble before the hotel even opened,” he later recalled.
Today, the economy is in dire straits again, albeit for very different reasons, and Marnell has his sights on building another casino — across the street from the M, no less.
The Henderson City Council on Tuesday approved a resolution formalizing its intent to sell nearly 9 acres of city-owned land on St. Rose Parkway just east of Las Vegas Boulevard to Marnell for at least $4.3 million for the purpose of developing and operating a hotel-casino.
The tract is worth about $6.5 million based on the average of two appraisals, but state law allows the city to sell real estate below market value for economic development purposes. According to city documents, Marnell estimates he would invest around $250 million into the project.
If all goes as planned, he would capitalize on, and further fuel, the growth in the area.
‘No set timeline’
The land he is buying is in west Henderson, which in the past few years has been flooded with new apartment complexes, housing tracts, warehouses and other projects, including the Raiders’ football practice facility.
At first glance, pursuing a new hotel project right now might seem like a head-scratcher, as Las Vegas’ tourism industry, the bedrock of the local economy, has been crushed by the coronavirus pandemic. Marnell, however, doesn’t plan to open the resort anytime soon.
Marnell, chairman and chief executive of Marnell Companies, told me Friday that he wouldn’t break ground for at least a year, possibly longer, saying it wouldn’t be wise to get underway until the pandemic is over.
“There’s no set timeline for when this would start,” he said.
The M, which features 390 rooms and more than 92,000 square feet of casino space, is operated by Penn National Gaming, which took control in 2011 during the Great Recession after it acquired the M’s debt.
Marnell, who left the M in 2015 after staying on as president, said he needs to wait until there’s enough of a market to support two hotels in the area. But he figures that people will keep moving to Southern Nevada and that west Henderson will keep growing rapidly, given its tracts of available land.
Recession wreaks havoc
The M was in the works before the real estate bubble burst and broader economy crashed. Site work had started when casino operator MGM Mirage — now MGM Resorts International — announced plans in spring 2007 to put $160 million into Marnell’s project.
Soon enough, the economy spiraled into the worst recession in decades. On March 1, 2009, with Las Vegas battered by job losses and its once-roaring real estate market in shambles, the M opened its doors.
Marnell told me last year it cost around $750 million to develop the resort. In fall 2010, Penn bought the debt on the project for $230.5 million.
There had been plans to build more at the M, including a 1 million-square-foot mall, but the recession “killed all of it,” Marnell recalled.
Of course, there are plenty of differences between the financial meltdown of a decade or so ago and the current one, which was triggered by a still-raging virus outbreak that has kept people home and away from crowds for fear of getting infected. In theory, the economy could bounce back once the pandemic is stamped out.
But the question remains: Assuming vaccines become widely available, how long will it take before masses of people feel safe to travel again?
The future of Las Vegas’ economy is riding on the answer.