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Transcript of interview with DeRuyter Butler by Stefani Evans and Claytee White, September 15, 2016

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2016-09-15

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Not many sixteen-year-olds assume the roles of father and mother to three younger siblings (one an infant), graduate from high school on time, and earn a full-ride scholarship (plus a loan) to a prestigious university. One such sixteen-year-old was Washington, D.C., native DeRuyter O. Butler, Executive Vice President of Architecture, Butler/Ashworth Architects, Ltd., LLC, and formerly Executive Vice President, Architecture, of Wynn Design & Development, LLC, and Director of Architecture, Atlandia Design & Furnishings, Inc. Determined to do right on behalf of his siblings and himself, Butler recruited his grandmother and enrolled in Catholic University, earning his B.S. in Architecture in 1977 while working overtime at the U.S. Post Office, buying a house in Maryland, and supporting his family. His first professional job in Philadelphia required him to rethink his living arrangements. Partnering with his sister, who assumed childcare duties during the week in Maryland, Butler lived in New Jersey during the week and commuted to Maryland on the weekends. After four years in that position and a short stint of being unemployed, in 1982 he became a draftsperson for Steve Wynn's Atlandia Design in Atlantic City. After he had worked with architects Joel Bergman and Paul Steelman in Atlantic City for four years, Wynn moved Atlandia Design to Las Vegas. Butler followed in 1986, bringing with him his grandmother and his youngest brother. In this interview, Butler discusses his unusual career path; the challenges of responding to and anticipating entertainment and recreation market trends; Wynn's insistence on always striving for "better"; and the importance of concealing service infrastructure in order to create the ultimate guest experience. He emphasizes Wynn's leadership in the gaming industry and with Clark County and the City of Las Vegas. He speaks to lessons learned from designing The Mirage, Bellagio, the Wynn, Wynn Palace, and Encore. Finally, he describes real-world limitations to building such as drought and historic water rights; traffic patterns, ride-hailing companies, and parking restrictions, and flight patterns and building heights.

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OH_02831_book

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Butler, DeRuyter O. Interview, 2016 September 15. OH-02831. [Transcript.] Oral History Research Center, Special Collections & Archives, University Libraries, University of Nevada, Las Vegas. Las Vegas, Nevada.

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i AN INTERVIEW WITH DERUYTER O. BUTLER An Oral History Conducted by Stefani Evans and Claytee D. White The Building Las Vegas Oral History Project Oral History Research Center at UNLV University Libraries University of Nevada Las Vegas ii ©The Building Las Vegas Oral History Project University of Nevada Las Vegas, 2016 Produced by: The Oral History Research Center at UNLV University Libraries Director: Claytee D. White Editor: Stefani Evans Transcribers: Kristin Hicks, Frances Smith Interviewers: Stefani Evans and Claytee D. White Project Manager: Stefani Evans iii The recorded interview and transcript have been made possible through the generosity of the UNLV University Libraries. The Oral History Research Center enables students and staff to work together with community members to generate this selection of first-person narratives. The participants in this project thank the university for the support given that allowed an idea and the opportunity to flourish. The transcript received minimal editing that includes the elimination of fragments, false starts, and repetitions in order to enhance the reader’s understanding of the material. All measures have been taken to preserve the style and language of the narrator. In several cases photographic sources accompany the individual interviews. The following interview is part of a series of interviews conducted under the auspices of the Building Las Vegas Oral History Project. Claytee D. White Director, Oral History Research Center University Libraries University Nevada, Las Vegas iv PREFACE Not many sixteen-year-olds assume the roles of father and mother to three younger siblings (one an infant), graduate from high school on time, and earn a full-ride scholarship (plus a loan) to a prestigious university. One such sixteen-year-old was Washington, D.C., native DeRuyter O. Butler, Executive Vice President of Architecture, Butler/Ashworth Architects, Ltd., LLC, and formerly Executive Vice President, Architecture, of Wynn Design & Development, LLC, and Director of Architecture, Atlandia Design & Furnishings, Inc. Determined to do right on behalf of his siblings and himself, Butler recruited his grandmother and enrolled in Catholic University, earning his B.S. in Architecture in 1977 while working overtime at the U.S. Post Office, buying a house in Maryland, and supporting his family. v His first professional job in Philadelphia required him to rethink his living arrangements. Partnering with his sister, who assumed childcare duties during the week in Maryland, Butler lived in New Jersey during the week and commuted to Maryland on the weekends. After four years in that position and a short stint of being unemployed, in 1982 he became a draftsperson for Steve Wynn's Atlandia Design in Atlantic City. After he had worked with architects Joel Bergman and Paul Steelman in Atlantic City for four years, Wynn moved Atlandia Design to Las Vegas. Butler followed in 1986, bringing with him his grandmother and his youngest brother. In this interview, Butler discusses his unusual career path; the challenges of responding to and anticipating entertainment and recreation market trends; Wynn's insistence on always striving for "better"; and the importance of concealing service infrastructure in order to create the ultimate guest experience. He emphasizes Wynn's leadership in the gaming industry and with Clark County and the City of Las Vegas. He speaks to lessons learned from designing The Mirage, Bellagio, the Wynn, Wynn Palace, and Encore. Finally, he describes real-world limitations to building such as drought and historic water rights; traffic patterns, ride-hailing companies, and parking restrictions, and flight patterns and building heights. vi TABLE OF CONTENTS Interview with DeRuyter O. Butler September 15, 2016 in Las Vegas, Nevada Conducted by Stefani Evans and Claytee D. White Preface……………………………………………………………………………………..……..iv Childhood in Washington, D.C.; German grandmother, interest in building and architecture from childhood, Catholic University, raising three younger siblings, and B.S. in Architecture 1977. Working way through college at U.S. Post office, first professional job, homeowner in Maryland at age 20, commuting and sharing child-care duties with sister, buying house in New Jersey. Going to Golden Nugget Atlantic City's Atlandia Design 1982 as temporary draftsperson under Joel Bergman and Paul Steelman, gradually took on more responsibility; to Las Vegas with youngest brother and grandmother in 1986, after Wynn sold Golden Nugget and moved design team to Las Vegas. Wynn, Bergman, Steelman and taking lead after Bergman's 1993 departure; working with Steve Wynn and UNLV architecture students. Architects of record, leading ideas in gaming industry, and responding to and anticipating entertainment market trends…………….….…. 1–15 Hotel amenities, unbuilt designs, the Desert Inn, services, Wynn Las Vegas and connectivity, Paradise Park, Crystal Lagoons, and Wynn Palace in Cotai; water features and recreation; landscape architecture and Lifescapes International; learning from each project: Mirage, Bellagio, Wynn, and Encore. Boutique hotel within a big hotel; flexible gaming and entertainment spaces; special effects; catering to daytime and nighttime clientele; designing for expansion; and always striving for "better." Bellagio's water show, nozzles, and tower lighting. On raising siblings and daughter ……………………………………………………………………………………...15–33 Evolution of Bellagio design, hiding service infrastructure, and architectural shortcuts: Luxor; the Aladdin and Planet Hollywood; the Marina Hotel and MGM Grand, and the Desert Inn and Wynn Las Vegas. Historic ground-water rights at the Dunes Hotel and Casino, Desert Inn Hotel and Country Club, and Las Vegas Country Club; traffic flows, required parking spaces, parking fees, and airport access. Steve Wynn's leadership, Frank Sinatra Boulevard, ride-hailing companies, and driverless cars. McCarran International Airport, flight plans, building design, and height limitations re Wynn Las Vegas, Trump International Hotel and Tower, The Venetian, and The Palazzo. Wynn and his building and development team …………………………………… 33–52 vii 1 S: Good morning. It is September 15, 2016, and Stefani Evans and Claytee White are in the office of DeRuyter Butler. Mr. Butler, would you please pronounce and spell both your first and last name. DeRuyter Butler. D-e-R-u-y-t-e-r. B-u-t-l-e-r. S: Thank you. Before I ask you about your early life I am going to ask you about your unusual first name. I was named after my grandfather and he was named after a priest of his church when he was little, who was Dutch. It is a Dutch name, and I recently, a few years ago, discovered a place in the United States called DeRuyter, New York. It was originally settled by Dutch settlers who came over on a ship from Holland that was named the DeRuyter. In those times it was used as a last name but somehow became a first name for my grandfather and myself. It has been a challenge all my life. It is logical when you see it, but most people mispronounce it. As kids, making it into anything you can imagine. I wouldn't do that to my son. S: So the first day of school was always tough. Yes. With the kids and the teachers. S: Tell us about your early life. I was born in Washington, D.C. In the early years, up until about age ten I was raised by my grandmother because both parents worked. My grandmother was German. In the first four years I pretty much spoke only German until I entered school and started interacting with kids and learned to speak English. I still speak a little German. I can understand it. On an elevator I can always hear people speaking German. I can pick up words here and there. I haven't had anybody to speak German with in a long time so I am not fluent in it, but I can understand it a little bit. You tend to take after your parents or your guiding light when you are young, and my grandmother always bought things for me to make, like Tinker Toys, an Erector set, Legos, building blocks, and Lincoln Logs—things, like that. I had almost all of them. She took a picture of 2 me when I was about four years old and I was sitting there building an Erector set tower. She wrote on the back, "DeRuyter as architect." It kind of stuck. Through high school and even junior high school I had some friends and we used to design fictional houses, what could be. That became my interest. I took a drafting class in high school, and that sort of stuck, so that gave me a direction. Most kids, when they start school, they don't know what they want to do. I had that push from early on and I had all this background in designing things and making things out of components. With Legos, they are very complicated these days, but at the time they were very simple. You had to use creativity to make things like an airplane out of Legos that looked like a plane. That is what got me interested in architecture. When I graduated high school I went on a few expeditions by myself. I drove to Atlanta because I loved Peachtree Plaza and Hyatt Regency, which were well-known buildings designed by Portman [John C. Portman Jr.], and I went to New York. I did some colonial period research, and one of my papers in college was on Williamsburg, Virginia, which is Colonial architecture. It always intrigued me to see buildings and to watch buildings be built. I was always hanging around construction sites in my neighborhood when they were building houses. When you see things like that, and you are sort of handy, you make things. I did a lot of residential remodeling where I'd buy a house as a shell and convert it, finish it up, put in tile, do the electrical work, and all that stuff. It is like a whole way of life, you could say. S: Where did you go to school? Growing up in Washington, D.C., I went to the public school systems and graduated from Woodrow Wilson High School. From there I went on to Catholic University in Washington, D.C. I applied to several universities but I was accepted at Catholic U, and they offered me not only the tuition; they also offered me a student loan, so they were actually giving me more money than the cost of the tuition. I didn't have any money. My mother died when I was sixteen and I had three younger siblings: a sister two years younger, a sister seven years younger, and a brother sixteen years younger. When my mom died I sort of took over for 3 the family. I reduced my classes in school to only take two classes in high school. I had enough credits already to only take the two classes to finish. Then I was also working. I had up to three jobs at any given time just to keep the household going. I accepted the scholarship to Catholic University and I finished there in four years with a Bachelor of Science in Architecture. Then I had this challenge of finding a job. I have always been industrious and I had my younger siblings to take care of. You get to a point where you need a certain amount of money just to live and take care of basic things. While I was in college I worked the entire four years. I worked at the U.S. Post Office. The Post Office paid pretty good, plus they usually had pretty much unlimited overtime so I could always work late and make extra money. When I graduated college I wanted to go into my profession and there was this sticker shock. It sounds like a little bit of money now, but it was a lot of money then. I was probably making $22,000 a year working for the post office, including overtime. You can live on that. When I got into the field of architecture it was an unheard of amount for someone just out of school with no experience. I figured that I could survive on $7 per hour, which is $14,000 a year, so that was my goal. I had to find a job and virtually no one was paying that for someone right out of school. My grandfather told me he had heard that there were some openings in Philadelphia so I started looking around Philadelphia. I finally found an engineering company that was willing to hire me. I went for an interview. They asked me what I was looking to make and I said $7/hour. He said, "OK. I think we can do that." I rented an apartment in New Jersey, right across the river from Philadelphia and I moved to work in Philadelphia. I had purchased a house by that time in Maryland. I was 21. I bought the house when I was 20. I had the two younger siblings still living with me. By that time, the older sister had moved out and she went on her way. I had this dilemma of what do I do with two young kids. By that time they would have been sixteen and six. I made a deal with the older sister: “I will pay for the house and I will come home on weekends and do all the housework. I will cut the grass, do the groceries, and do the laundry. You live with 4 them during the week. You can have weekends free and I will come home every weekend and do all this stuff.” I lived in New Jersey during the week and worked and then came home on weekends to take care of the household. I did that for about three years. Driving, it was about a two-and-a-half-hour drive each way; it was kind of tough to have any kind of normal life. Eventually I bought a house in New Jersey and moved the two younger ones there with me. That is how they got to New Jersey. I got laid off after about four years. Architecture as a profession has its ups and downs, and it kind of flows with the economy. It was in 1982 that I got laid off in Philadelphia from the engineering company, and I was probably unemployed for about four months. I finally found a job working for the Golden Nugget in Atlantic City. That was an hour's drive each way, but it was okay. I took that job and I started as an entry-level draftsperson. C: At seven dollars per hour? By that time I had gotten raises over the four years at the engineering company and I started with the Golden Nugget at about $26,000 a year. It was only a temporary position. They had one project that they were trying to get done and they needed some help. They said it was a ninety-day position and we can give you a shot, but after that there is no promise. I said okay, and I took it. I started working for the Golden Nugget. At the time the architect in charge was Joel Bergman, who you may be aware has recently passed away. There is a service this Saturday for him. Joel Bergman and Paul Steelman were the two principle architects at what at the time was Atlandia Design, a subsidiary company of the Golden Nugget. I started working for them in 1982 at the Golden Nugget and gradually took on more and more projects and I guess demonstrated that I was intelligent enough to make me worth keeping. I hung in there and ultimately rose up to basically run the office. Joel was still the principle. Paul Steelman had left in 1987 because he wasn't still employed there when the Mirage opened in 1989. 5 I worked in Atlantic City for four years when Mr. Wynn decided to sell the Golden Nugget in Atlantic City and bought the land where the Silver Slipper and the Castaways was in Las Vegas and that was destined to become the Mirage. He purchased the land to build the Mirage and, basically because he sold the Golden Nugget in Atlantic City, he wanted to move the design team from Atlantic City to Las Vegas. That put me in an odd position. I had my brother and sister living with me in New Jersey in the house that I bought. My job was gone. I had to look for a new job or move to Vegas. I had already done some work in Vegas. I did a lot of the expansion of the original Golden Nugget in Las Vegas. The Golden Nugget was on one city block downtown. Mr. Wynn was able to get Bridger Street [Ed note: Wynn vacated Carson Avenue], vacated so we could expand, which we call Tower Three, the tall white tower that exists now. I was back and forth a little bit because that was my project in Las Vegas. Still under Joel's guidance overall as the architect of record, I was traveling back and forth to Vegas. I kind of liked Vegas; it was nice. Eventually they persuaded me to move out here, so in 1986 I moved to Vegas to build the Mirage. C: What about your brother and sister? By that time the sister had hit about eighteen and girls at eighteen, they kind of have their own ideas. "You are not my father. You can't tell me what time I have to be home." I said, "We will have to part ways because I have certain things that I believe in that you have to live by." She moved out at eighteen by herself. My brother was still with me at the time so I moved him with me to Vegas. S: So where did he go to school? He went to Valley High School. He lived with me for a few years in a condo I bought on the east side of town. When my mother died my father went to prison because he was involved with her death. The grandmother who raised me came to live with me to help with the kids because obviously I couldn't go to 6 school, work, and take care of kids, so she was living with me for a while. When I moved my brother to Vegas I moved the grandmother, too. It was a lot more complicated and I am trying to give you a big picture image. My grandmother moved back to Germany when I was ten. She lived in Germany for probably the next seven years until she moved back to the United States to help me take care of the younger two. When they moved to Vegas, it was my grandmother, myself, and my brother who lived in the condo. I was still working and trying to advance my career. Paul Steelman, who had been a principal, went out on his own. He started to work with Henry Conversano and they worked on the MGM Theme Park addition, Sun City in South Africa, Bally's, and Caesars. Paul has always been a friend of mine so I would help Paul at night. I would work for Golden Nugget (which became Mirage) during the day, and then I would work for Paul Steelman at night getting his office on the ground. He rented a place and he had one little office and a computer. I would come in at six or seven in the evening and I would work until twelve or one in the morning to help get him launched. C: What is it about architects; how do you guys work those hours? Everybody tells us about this. It is so strange because when you go through college the pressure you are under; your body evolves into not requiring much sleep. Once you get into that mode you can't get out of it. In your senior year you have a senior project to complete. They give you a time it is due by and you have to get it done one way or another. A part of the process is, when you design something, they have a critique where they take your project, whether it is a model or drawings, and they post it, and then the instructors and the other students critique the project. You are in front of the class and you can be assassinated for anything you might have done wrong or good or in between. Anyway, there was this one final project and I went to school on Tuesday morning after getting off work from the Post Office, and I didn't come home until Friday and I didn't sleep at all during that time, trying to get it done. In college you live on No-Doze and coffee. You get into that mode and even now I probably normally sleep only five hours a day and I wake up and think of all 7 the things I have to do that I haven't gotten done yet so I might as well get up. I usually get up at 4:00 a.m., but I wake up at 3:00 a.m. and start figuring out all the things I haven't gotten done yet. S: So you are helping Paul Steelman get his business off the ground and you are working at the Golden Nugget? I eventually had to stop helping Paul because someone saw my car there at his office at night. They called Joel and said, "One of your guys is moonlighting over at Steelman's office. Do you know about that?" So Joel called me in and asked me what I was doing there. I said, "I am helping Paul. He is a friend, and he needs the help, and he has a lot of work so I am helping him." He said, "Nope. You can't work here and work there. If you have talents and time you should expend them here. You can't work for outside entities." I said okay and I told Paul I couldn't work for him anymore. We have still been friends. I stayed on and eventually Joel left in 1993. It was right at the opening of Treasure Island. The Mirage opened in 1989 and Treasure Island opened in 1993 and Joel decided, at the opening of Treasure Island, he wanted to go out on his own. He had rented an office and started client solicitation. Initially I was just left there with a staff but no real direction. Okay, so who is in command? I know they were looking for an alternate, someone to come in and replace Joel as the head of the department. I was a licensed architect by that time, but I had had zero exposure to Mr. Wynn because Joel was very protective of working with Steve. It was like “his relationship” with Steve. We would do the work and he would review that with Steve and get approvals, but we weren't allowed to work directly with Steve. When Joel left I was like, "I have to go see Steve Wynn?" Steve's and my personality sort of complement each other. I am even tempered and he is a high energy person. When I come in with drawings and I start coloring for him and making sketches for him, he calms down and gets into it and we get along fine. That is when the relationship started to develop in 1993. There were a few projects. There was one we were working on in Malaysia that had started when Joel was here, 8 but it was in its infancy and I took over this project. I didn't know anything about it but we had consultants all working on things. I would gather up the drawings and go meet with Steve and present stuff. He liked some of the ideas and gradually Kenny Wynn, his brother, who was then in charge of Atlandia, said, "Why don't you move into Joel's office?" I said, "Well, nobody has told me to do anything." He said, "Go ahead, and move into his office." So I moved into his office and kept all the projects going. It was extremely busy then, but it is now even busier. It has only gotten worse; it has never gotten better. Some of the projects we were working on at the time were this Malaysia project and the usual Golden Nugget “Cap-X” [capital expenditures] remodels. Historically, we completely remodel the guest rooms every five years, the restaurants every five to seven years, and all the public areas and a lot of the back of house. Then we would also do the company expansion work. One thing that is unique about Mr. Wynn is that he has always valued having a team that understands the corporate culture of the company. There are design parameters, there are things that we do that we think no one else does. Some of that is because of the continuity of the staff that are here. I have worked now for Mr. Wynn, overall for the company, 34 years, specifically with him for 23 years of that. There are things where he can start an idea and I can finish it. Or I can start an idea and he can finish it. Similarly for my staff. I have a staff right now of about fifteen or sixteen people and most of them have been with me for at least ten years. I have one student who is at UNLV now and I have one who is a graduate from a couple of years ago and they both at are entry level positions but I bring them in and I encourage them to continue their studies, finish school, get their license. I am flexible with hours. If they want to work 32 hours this week. Or if they come to me and say I have finals next week can I have this week off. "Sure. No problem." I am very flexible with hours of students who are trying to make their way and supportive of them. It has actually paid off. One of my senior people is also a graduate of UNLV and I 9 did the same thing. He was a part-timer and he was in school and trying to get done and I was completely flexible with hours and today he is my super star. S: That is wonderful to hear. C: Did he have to put in those eighty hour weeks? There has never been a mandatory overtime requirement. Basically there are two types of people. There are the “nine to fivers” and there are the people who develop and want a career and whatever that takes. There is a place in the world for everybody, and I have both on my team, but this gentleman, Frank Moore, happened to be a guy who was very hard-working and dedicated. Today, I'll say "Frank, why don't you take this weekend off and spend the time with your wife and your daughters." I look at the sign-in log and he is still there on weekends. Finally I say, "Look Frank I'm going to have IT shut off your computer this weekend. Don't come here. You are not allowed here this weekend." S: Speaking of continuity, and I am thinking now of continuity of design or longevity of ideas, tell us about your filing system on the wall here. As I mentioned we have many, many projects. The size of the big projects like Wynn, Encore, Beau Rivage in Mississippi, and the three hotels we now have operating in China, those are major projects. But for each and every one of those we have a mountain of remodel projects, whether it is guest rooms, or expansion of a restaurant or a conversion of a ball room into something else, or retail. We do most of these projects in-house. Wynn Design is comprised of architecture, interiors, construction, admin, accounting and purchasing. We do most of the stuff in-house. For a major project we are not really staffed to do a huge project but we did do the original Wynn Las Vegas. We did that all in-house with an architectural staff of 27. After Wynn opened we were right away working on Encore as an expansion of Wynn, but we also had to maintain all the, what we call the “Cap-X Projects,” capital improvement type projects, in Wynn. So the 10 staff has to either keep growing or you have to pawn off some of the work to outside architectural firms, which is what we did with Encore. We used WATG [Wimberly Allison Tong & Goo] out of Los Angeles as the architect of record for Encore. We did the design; we always do the design. We do a complete design development package for all the projects in-house, and if the project is a major project, like Encore, or Wynn Macau, we farm out to an executive architect of record to prepare the construction documents. C: What happens to these when you finish with them? These probably hang here permanently because all of these things you see hanging on the wall, many of them have sticky tags. What I do is many, many proposals. For instance, I will give you an example. We recently opened Intrigue as a remodel of a nightclub. Prior to that it was Tryst. Well, previous to that it was originally designed as a restaurant Le Bett. The business climate evolves, the market evolves. You always have to respond to what the trend is in the marketplace. We think we are pretty much at the leading edge of ideas and development in the gaming industry. A lot of things we do is to try and stay ahead of the marketplace. We create things and design things but for everything that we do there are probably fifty versions of it in a drawer somewhere and I have to keep track of those. If you are familiar with Encore, we opened it with a beautiful porte-cochère on Las Vegas Boulevard. That was predicated on the anticipated walk-in traffic and a visual presence on Las Vegas Boulevard, and Echelon had announced a major project diagonally just to the northwest. At about the same time, another project to be called the Plaza was being designed for the Frontier. These were huge hotels. I think Echelon had 7,000 rooms and the Plaza had 3,000 to 4,000. We were responding to the neighborhood. During the economic downturn those projects evaporated and now we were faced with a porte-cochère that had less of a real purpose. It had no customer volume, but it was a beautifully designed structure. It had valet parking tunnels and a taxi queuing tunnel underneath. We concluded that as the market was evolving, the industry was trending toward daytime parties, so we were planning to build what we call the Encore Beach Club in 11 what was the driving range of the golf course. We decided that the porte-cochère wasn't necessary, and the north porte-cochère that faces Desert Inn could accommodate the volumes for Encore's entrance so we built the Encore Beach Club, replacing the original main porte-cochère. I think the project cost was a little over $70 million and it pretty much paid for itself in about two years. I don't know what the original porte-cochère cost, but I am sure it had to be a $20 to $30 million structure on the building that we knocked down and started over with the Beach Club. S: So that porte-cochère is somewhere out here? The porte-cochère and its drawings are all here and also the concepts of what it could become. We had conceived alternate ideas. We were talking to Bergdorf Goodman at the time to build a major mall in place of the porte-cochère. Yes, I have all those drawings. Ultimately it turned out that the beach club seemed to be the more advantageous use of the land so that is why it became that, but there were many versions prior to it becoming a beach club. C: Mr. Wynn, not very long ago, spoke at a conference and said something about nightclubs. It sounded like he wasn't that enthusiastic about night clubs. Are there plans for him to do something eventually with those nightclubs? Nightclubs are a very transient function in our buildings. Ten years ago they didn't even exist. Now they are a major, major component and they probably make, I don't know exactly the numbers, because I am not the numbers guy, but my guess is that they probably make as much as if not more than some of the casinos. It is an industry that has evolved very, very quickly. We think we are usually in the forefront of trending in Las Vegas and we built XS, which rapidly became probably the most profitable nightclub. I don't want to over speak, but I believe it is the most profitable nightclub in the United States, and possibly the world. If you look at the top ten nightclubs nationally, XS is usually number one. Numbers two and three oscillate between Cosmopolitan and Surrender, and the top four include the one at the Venetian. There is a top-ten 12 list of nightclubs and in that top-ten list for the US, six of them are in Las Vegas. Pure was on the list, but they are closed and remodeling. XS has consistently been the top-producing nightclub, and I think the annual revenue is about $70 million. After the success of XS, we built Surrender, which was the original porte-cochère lobby of Encore. The lobby portion became the night club Surrender, the indoor component, and the porte-cochère and driveway network became the beach club. The nightclub industry here has evolved so rapidly that it first started out as night clubs then it expanded to day clubs and then it was invaded by deejays. The deejays came about as a draw for the population. There is a following of a particular deejay and the deeyays learned that they could command horrendous sums of money, like a quarter of a million dollars for an event. It is unbelievable. What they use now as their band and entertainment source is a laptop. They show up with a laptop and they have everything on the laptop and then they push buttons and they dance or they have some dramatic outfit and have become in great demand. They have a following around the country and command a lot of money for that. It has pushed the industry into a whole other direction. It is hard to say where it is going next. You have to observe just what is going on around you to see what is becoming popular. We think that [the model of ] these deejays that dominate the nightclubs is going to play itself out at some point, because the deejays wind up making more money than the nightclub, which is providing all the service, all the risk, all the capital up front and they [the deejays] take all the profit. Something has to give. It evolves like everything else. They just recently opened Omnia just a year and a half to two years ago, which I think they spent $160 million dollars on. Hakkasan was about $150 million at MGM. Our original budget for XS was $30 million. If you make $70 million on $30 million that is a good deal. If you make $30 million on a $150 million it is not as good a deal. It is still profitable, but it is not great, and then if you have to hand over all your profits over to the deejays, it is sort of defeating. S: How do you keep ahead of this trend? Do you frequent the clubs and observe what is going on? 13 I don't. I used to go to clubs on occasion, but when you hang out at a nightclub it is hard to do anything the next day. As you get