By Seth Daniel
When Steve Wynn presented his plan to the residents of Everett and the Massachusetts Gaming Commission (MGC) in 2013 and 2014, he often stressed the retail aspect of his resorts – that a huge amount of the revenues in his resorts came from non-casino features like retail stores.
“It’s the non-casino revenues Commissioners,” he famously stated in an MGC meeting in 2013.
Those non-casino revenues now won’t be so much from Versace, but likely more from conventions and high-class weddings, mirroring the increasing struggles of brick and mortar retail outlets nationwide and across Greater Boston.
During a meeting of the MGC in Springfield on March 2, Wynn Boston Harbor President Bob DeSalvio announced that they have eliminated 10 stores from the resort and added a huge new ballroom to the function and convention space.
DeSalvio said many luxury retailers have been struggling with conversion to online retailing and also not wanting to move from Newbury Street to Wynn Boston Harbor. That has pushed the company to repurpose a great deal of retail space into new restaurants and a new ballroom that will be the second largest in all of Greater Boston.
“(The reduction) is probably driven by market conditions,” he said. “I’m sure everyone is aware of the retail work being in a bit of an upheaval at the moment. The heavy duty pressure to do online has moved many retailers to cut back on the numbers of stores. Quite honestly, Wynn focuses on a very high end luxury group of retailers which are pretty well represented on Newbury Street in Boston. We talked to them and for them to close a store and break a lease and move store a few miles away – rebuild and re-open – that was a tall order for some of them. In long discussions with Mr. Wynn about this, we didn’t want to compromise the level of retail.”
DeSalvio said they could have easily filled vacant space on the open market, but they felt that could denigrate the rental rates that they expect at a five-star resort.
“Rather that do that, Mr. Wynn and the team came up with a strategy whereby we would flip some of the space to repurpose it and open the retail ourselves and at a later date we can come back and change our minds if we want to go out,” he said. “We were not going to bend our expectations as to what we could get per square foot just to fill retail space. It was just not in the cards.”
The remaining stores – at about 9,000 sq. ft. from more than 56,000 sq. ft. – will host the Wynn Collection. That idea is a collection of luxury brands under one storefront and operated by Wynn. It would have luxury brand men’s clothing, women’s clothing, accessories and handbags curated by Wynn in the store. It’s a concept DeSalvio said has been very successful in Las Vegas, where the idea has been piloted over the last year in a reconfiguration of retail space there.
With the reduction in retail, there is an increase in function and convention space most prominently – including a new 36,000 sq. ft. ballroom that could host 2,000 for a banquet and 3,700 for a sit-down event.
DeSalvio said Steve Wynn conducted a small focus group on a recent trip to Boston and found that the real need in the area is for five-star convention space rather than expansive retail.
“There is a real shortage of large ballroom space in our particular region,” he said. “The largest ballroom available here is at the Convention Center (in South Boston). With this change, we would have the largest ballroom in the Greater Boston area. We’ll be able to seat 3,700 people for an event or a banquet that has about 2,000 people.”
There would also be 10 smaller meeting rooms available as well.
The ballroom, he said, is not a theatre at all. He said the primary purpose would be meetings/conferences, banquets and occasional entertainment event – such as a New Year’s Party or a Red Card event.
The second expansion of space would be for food and beverage – or restaurants.
DeSalvio said they have added an oyster bar, doubled the space of the Asian Fusion restaurant, expanded the Italian fine dining restaurant and added a casual Italian restaurant just off the gaming floor.
Another notable addition is for a craft brewery, and DeSalvio said they are talking to local breweries in the Everett area.
“We think there is a great appetite to bring local flavor to the property,” he said.
Among the food and beverage outlets, he said Wynn would operate all but two of them.
A large restaurant space is under negotiation with a local, Greater Boston entity, as is a smaller space. Both of those spaces would be leased by the outside operators.
The changes did bring some good news on the jobs front.
The numbers of full time jobs at the resort, when subtracting the loss of retail jobs, would be an increase of 177 full time jobs.
That brings the overall full-time jobs on the project to 3,860 – with a full employment head count (including part-timers) at 4,500. That is up from a total head count of 4,000 initially.
“These numbers are all up from where they used to be and a good story on our overall employment,” he said. “I think we have a much better product and we’ve put in the features we think will attract folks to the region…There is one type of Wynn experience and that is the five-star experience you’re used to.”
At the same time, DeSalvio announced that at a meeting of the Board of Directors in late February, an increase in the project costs was approved – going from $2.1 billion to $2.4 billion. That was a function of some of the changes, but also due to increase hard construction costs associated with the building boom in Boston.