Echelon Casino project currently delayed
6th August, 2008
The Boyd Gaming Corp. Has announced that it will temporarily delay work on its $4.8 billion Echelon casino project planned to be constructed on the Las Vegas Strip. This decision was hailed by investors on Wall Street because the company’s shares have been struggling over the past year.
Boyd has blamed the decision on the current economic state of affairs, with the recent credit-market crunch and other important problems.
“This is a delay,” said Keith Smith, CEO of Boyd Gaming. “We are fully committed to Echelon. It was a decision based on the economic climate for capital. A lot has changed in the last year. The financing is just not there. Looking forward, a lot could change in the next year. This is not a change in strategy for the company.”
Many are wondering if the decision to delay work on the Echelon project might be the beginning of a new path for the company, but others see it as a decision that had to be made considering the current economic environment.
“We believe the delay of Echelon indicates the unprecedented downturn that Las Vegas is currently undergoing and the extreme difficulty in securing capital,” said Steven Kent, gaming analyst for Goldman Sachs. “While this delay could be a positive for Boyd’s equity value, the underlying problem of a strained consumer and tight capital markets remain. We continue to believe that the downturn should continue throughout the remainder of 2008 and into 2009.”
Las Vegas Mayor Oscar Goodman met with Bill Boyd to speak about the decision to delay the Echelon project, and he concluded it was the correct decision for the company at the time and that when the time is right the project will continue.
“There is nothing to be concerned about,” said Goodman. “They are a great company and they’ll complete what they started. They made a good business decision to build Echelon and they are making a good business decision to delay the project for now.”
