Pinnacle double downs its bet

Pinnacle Entertainment has raised the ante on its $430 million casino and hotel project at the downtown riverfront. The Las Vegas-based gaming company announced it is expanding the project, now named Lumire Place, to add more retail and residential space, which will double the company's total investment to nearly $1 billion.

"We did this because we wanted to create a neighborhood," Pinnacle Chairman and Chief Executive Daniel Lee said during a Thursday news conference to unveil the new name. "We need to persuade people to come back downtown."

The expansion was not part of the original project and it will be considered a separate phase from the hotel and casino currently being built, Lee said. The first phase is slated for completion in late 2007.

The second-phase will contain 375 condos, encompassing more than 617,000 square feet. To help justify the space as a residential environment, Lumire Place will feature amenities such as parks and pools for residents only.

Within the total of 220,810 square feet for retail, Pinnacle has earmarked 35,258 square feet for a high-end grocery store and more than 11,000 square feet for a cafe.

Pinnacle did not set start or end dates for the second phase and only roughly estimated that the cost should at least equal its current $430 million casino project. Lee said specific dates and costs would be determined after Pinnacle surveys interest from prospective retailers and residents.

To help attract conventioneers from nearby America's Center, the gambling company announced Thursday it would build a tunnel with moving walkways to connect Bob Baer Plaza outside the Edward Jones Dome to Lumire Place.

When used in conjunction with another walkway from the casino to the Embassy Suites hotel at Dr. Martin Luther King Drive and First Street, pedestrians will be able to go from Baer Plaza to First Street under cover.

The riverfront project has ballooned substantially since Pinnacle's original proposal for a $250 million casino, hotel and residential project was chosen by the Missouri Gaming Commission in September 2004.

From the beginning, Pinnacle agreed to build $50 million in residential development in addition to the $200 million casino and hotel. In December 2005, the company met half of that requirement when it partnered with Rodgers Group Development on the $25 million Port St. Louis 49-unit condo on Laclede's Landing.

The idea for the phase two expansion blossomed from comments made by an executive from Four Seasons Hotels, Lee told the Post-Dispatch. While observing the construction site during a meeting in a room at the Embassy Suites, the hotel executive looked out at the existing land and suggested Pinnacle should buy the rest of the area.

Lee eventually paid the city $15 million to purchase 13 acres east of what Pinnacle already owned. The company now owns the property between Martin Luther King Drive on the south and Carr Street on the north and between Interstate 70 and the Mississippi River.

Lee drafted architect Jon Jerde's firm to design phase two of the project. The Jerde Partnership was behind such projects as the Bellagio Hotel in Las Vegas and Universal City Walk in Los Angeles. Lee said he chose Jerde to help him give Lumiere Place its own identity.

"We didn't want to become known as part of Laclede's Landing," Lee said.

Though Lee estimated the casino at Lumire Place will draw $50 million in annual revenue, the additional development makes the investment potentially more lucrative by creating additional sources of revenue.

Due to Missouri's law that only allows gamblers to lose $500 in an hour, Pinnacle's casino is not going to be a destination for high rollers, Lee said. He said the company will lobby to get rid of that limit.

The expansion of Lumire Place may leave the President Casino on the Admiral with a grim future. Pinnacle has a preliminary agreement to purchase the bankrupt casino's assets. The boat, which is more than 90 years old, needs a new hull in the next three years, Lee said. That would cost too much to justify, considering that Pinnacle has other boats in storage that could take the Admiral's place, Lee said.

But when asked if he thought it made sense to replace the Admiral, moored at the edge of Pinnacle's Lumire Place property, with another gambling boat, Lee said "probably not." That leaves a question mark about what the company would do with the President's valuable gambling license.

Lee also said Four Seasons Hotels and Resorts is nearly set to extend its franchise to the 200-room luxury hotel at Lumire Place, but there is a snag. The Toronto-based hotel chain is butting heads with the Lodge of the Four Seasons Resort and Spa in Lake of the Ozarks.

He said that the establishment in the Ozarks is not related the hotel chain and that the two establishments are trying to work out a way to differentiate themselves in the Missouri market.