Ameristar Casinos, Inc. (Nasdaq-NMS: ASCA) today released the details of its previously announced plans to enhance its casino and entertainment facility at Ameristar Kansas City through a series of additions and renovations that will provide a more dynamic entertainment experience. This project includes significant improvements to the casino and major renovations to the property’s land-based amenities. These improvements will introduce innovative restaurant concepts designed to have value-oriented pricing and broader consumer appeal than the initial restaurant mix at the property when Ameristar acquired it in December 2000. Portions of this project have already been completed with the remainder expected to be completed by early 2003. The estimated total cost of the project is approximately $30 million.
“Upon our acquisition of Ameristar Kansas City, we immediately began to devote capital resources to upgrading the facility and maintaining it as the premier gaming and entertainment facility in the region,” said Craig H. Neilsen, the Company’s Chairman, President and CEO. “This project demonstrates our continued commitment to that strategy, building on the foundation established by our conversion of the gaming floor to state-of-the-art gaming equipment, the consolidation of the two casinos into a single casino floor, and the construction of a new 2,650-space parking garage. As with the renovation and enhancement projects that we completed at Ameristar Council Bluffs and Ameristar Vicksburg last year, we are confident that this project will dramatically enhance consumer appeal and Ameristar’s competitiveness in the local market and generate a strong return on our incremental investment in the Kansas City property.”
A variety of significant enhancements will be completed within the casino. The layout of the casino floor will be reconfigured to provide a more spacious and exciting gaming area following last year’s consolidation of the two gaming vessels. This includes the addition of escalators in the center of the casino to enhance access to the second level, the relocation and renovation of the high limit slot area and the poker room, and the installation of new carpet throughout the casino. Slot machines will also be installed in a portion of the mezzanine that is currently being utilized for special events, bringing the property’s total slot count to 3,200.
In addition to the casino renovations, this project substantially improves access to the casino. A new entrance providing direct access from the recently opened five-story parking garage has been added, and the streetscape in the area near this entrance has been enhanced and modified to improve its visibility and ambiance. These renovations provide a more open, spacious feel as guests enter the property through the climate-controlled walkway from the garage.
The streetscape amenities will also be significantly remodeled and enhanced, featuring the introduction of several new dining and entertainment venues:
? The Freedom Roadhouse, which opened in July, is designed around the American roadhouse theme, featuring a pedestal-mounted Harley Davidson road hog, classic juke box and Route 66 and other vintage-style road signs throughout. The Freedom Roadhouse has 156 seats and a 26-seat bar.
? The Great Plains Cattle Co. will be a 140-seat steakhouse complete with a private dining room, fireplaces and a separate 72-seat lounge. Commemorating a turn-of-the-century steakhouse, this restaurant will combine the style of our country’s early frontier towns with that of the late 19th century Midwestern stockyard district to provide a rustic setting for quality dining in a casual environment.
? The 235-seat Falcon Diner redefines the American diner with an atmosphere that is reflective of the Art Deco modernist movement and embodies the spirit of the typical downtown eatery. This venue will offer Ameristar guests a casual setting for 24-hour dining.
? Depot No. 9 will be an 88-seat casual bar featuring Las Vegas-style entertainment connected to the historic Pullman railroad car near the entrance from the porte cochere. This venue is designed after the train depots of the late-19th century that were prominent in many communities in the Midwest and served as a town’s center of communication with the outside world.
? An open-seating food court featuring three national franchise outlets - Burger King, Sbarros and Cold Stone Creamery - will also be added.
Food and beverage outlets that have closed in connection with these renovations include Pancho Villa’s, Orleans, Maggie Moos, the Golden Spike and the property’s piano/jazz bar.
Since acquiring the Kansas City and St. Charles properties in December 2000, Ameristar has invested or committed to invest more than $300 million in capital improvements in Missouri, including the current Kansas City project, the parking garage in Kansas City and the new St. Charles casino and entertainment facility that opened on August 6, 2002. During the 18 months ended June 30, 2002, the Company’s Missouri properties produced operating income of $124 million. Accordingly, the Company’s investments in Missouri are being funded by Ameristar’s consolidated operations.
“We continue to evaluate other opportunities to invest in the expansion of our properties,” added Mr. Neilsen, “but we will only proceed with projects that meet the Company’s objectives for return on investment.”
“Among other factors we consider in evaluating potential returns on capital investments is our outlook for possible changes in gaming regulation and gaming tax rates,” said Gordon R. Kanofsky, Ameristar’s Executive Vice President. “Since some Midwestern states have recently adopted regulatory and tax changes, we will continue to monitor legislative proposals in the states in which we operate,” continued Mr. Kanofsky.
The Company expects to fund the Kansas City project through operating cash flow and borrowings under its senior credit facilities. Although the Company expects some degree of disruption to its existing operations from construction, it plans to schedule construction in various phases to minimize the impact on ongoing operations.