by Eli Segall, Las Vegas Review-Journal, February 21, 2023
Rio landlord Eric Birnbaum unveiled plans to renovate the off-Strip resort and take charge of daily operations.
The Rio, which opened in 1990, also could see another big change: a baseball stadium next door.
Birnbaum’s firm, Dreamscape Companies, announced last week that it raised $850 million in capital. It will use the funds to launch a real estate investment trust that will own casino, hospitality and entertainment assets, and form an entity to operate such businesses.
The funds will also be used to bankroll a “multi-phase renovation” of the Rio, according to a news release.
Caesars Entertainment, which sold the casino-resort to Birnbaum in 2019 for more than $500 million and leased it back, still operates the Rio. Dreamscape, however, is “slated to officially take over and manage operations at the resort in 2023,” according to last week’s announcement.
Birnbaum isn’t the first casino owner to launch an affiliated real estate arm, but he is the latest in a long line of investors to refresh a resort in Las Vegas.
His planned overhaul comes as Major League Baseball’s Oakland Athletics take a hard look at some properties in America’s casino capital for a possible ballpark, including excess land at the Rio.
‘Open to this idea’
Located on Flamingo Road about a mile west of the Strip, the Rio sits on 88.5 acres, property records show. Surface parking lots cover a big section of the site.
The A’s declined to provide a comment for this story. New York-based Dreamscape did not respond to requests for comment Monday.
The Review-Journal recently reported the A’s were seriously considering the Rio property as a potential location for a ballpark. The team has also been looking at Tropicana Las Vegas on the Strip and a festival grounds at the corner of Las Vegas Boulevard and Sahara Avenue.
Dreamscape “has been engaged in a dialogue about a portion of the excess land at the Rio as a potential MLB ballpark for the past several years,” and the company “remains open to this idea,” a spokesperson told the Review-Journal on Friday.
Birnbaum, founder and CEO of Dreamscape, acquired the Brazilian-themed Rio for $516.3 million. When the sale was announced, Caesars said it would operate the casino-resort for at least two more years and pay $45 million in annual rent.
The Rio boasts 2,520 rooms and more than 117,000 square feet of casino space, according to a securities filing by Caesars. The casino chain did not respond to a request for comment Monday.
‘Meat on the bones’
Birnbaum has previously talked about his plans to renovate the Rio. In 2021, he told the Review-Journal that the “underloved” resort needed new life with “everything from the moment you walk in, to the moment you leave.”
But there was enough “meat on the bones” for the Rio to again become a go-to place for locals and tourists, he said.
Last week’s news release did not say how much money Dreamscape would spend on the Rio’s renovation, nor did it provide details on the scope of work or when it would start.
It said that the firm will “reimagine the two-tower structure, restoring it into a premier resort and casino experience with modernized amenities and an array of offerings that speak to today’s gaming and hospitality consumer.”
It also said the Rio will remain open throughout the renovations.
Meanwhile, Birnbaum is the latest casino owner to launch an affiliated real estate business.
In 2013, the former Penn National Gaming launched Gaming and Leisure Properties as a separate company to own casino real estate. Casino giant MGM Resorts International launched a publicly traded real estate spinoff in 2016, and landlord Vici Properties was formed in 2017 as a spinoff from Caesars Entertainment when that casino chain’s main operating unit emerged from bankruptcy.
Vici is now the biggest property owner on the Strip, thanks in large part to its $17.2 billion buyout of MGM’s real estate spinoff, a deal that closed last year. Vici collects big rent from resort operators and has a portfolio that includes Caesars Palace, The Venetian, The Mirage, Mandalay Bay and MGM Grand.
Birnbaum’s firm described its new real estate arm, Dreamscape Entertainment Properties Inc., and the operations side, Dreamscape Entertainment Integrated Resorts Inc., as “independent Dreamscape platforms.”