BusinessReport.com

It’s busy at Louisiana Lagniappe, but owner Kevin Ortego muses it would be nice if he could put a couple of blackjack tables in his restaurant to make sure it stays that way.

With East Baton Rouge voters recently rolling the dice in favor of Pinnacle Entertainment’s $250 million Riviere casino resort, Ortego and others wonder who will be the winner in what’s becoming a high-stakes game.

Ortego says many area restaurants are probably a little concerned about competing with the resort that could be running in two to three years, but he’s banking on loyal customers for their future.

“When you make all your money gambling and still can afford to give away food, that’s a big concern,” Ortego says. “Anyone going in there thinking they’ll come out with more money than what they went in there with is fooling themselves.” Ortego’s brother, General Manager Brandon LaCroix, anticipates Riviere will draw more visitors to the area, as well as more customers to his family’s restaurant on Perkins Road just east of Bluebonnet Boulevard.

With approval from the Planning and Zoning Commission and Metro Council, the first phase of Riviere will be built on a 550-acre site along the Mississippi River in south Baton Rouge. The project would include a “riverboat” casino with about 1,500 slot machines and 50 table games, a 1,000-seat entertainment theater along with restaurants and a 100-room boutique hotel.

Future plans could include a mixed-use development, more hotel rooms, a full-service spa and health club, tennis club, equestrian center and riding trails and a championship golf course.

Calling it “a new generation casino,” Pinnacle spokeswoman Pauline Yoshihashi says they tailor their resorts to complement the market.

“You don’t swat a fly with a Buick,” Yoshihashi says.

This is also why each property is uniquely named rather than all bearing the name Pinnacle. In Baton Rouge, locals indicated in a Pinnacle survey they wanted headline entertainment, so that will be a focus for Riviere. The market needs a luxury hotel, so she says they’re working on getting one of the caliber of a Four Seasons or Ritz-Carlton.

“One of the things we look for is a sophisticated and energized approach to bringing business in, and that’s something we find very attractive to Baton Rouge,” Yoshihashi says. “From a gaming perspective, it’s an underutilized market. It is somewhere that a resort would do very well. Baton Rouge people are much better traveled and more sophisticated customers than 20 years ago, and that’s why we’re ready to come there.”

In the meantime, Baton Rouge also is stepping up the market in areas strategically aligned with Riviere.

The possibility exists that the Holiday Inn Select on Constitution Avenue will be rebranded as a Crowne Plaza, a boutique hotel is planned as part of developer Tommy Spinosa’s Perkins Rowe and developer R.W. Day plans to build a Staybridge Suites as part of its Southgate project south of LSU.

In addition, New Orleans restaurateur Dickie Brennan will be part of developer Mike Wampold’s Marriott Renaissance Hotel on Bluebonnet Boulevard south of Interstate 10, and New Orleans’ legendary Acme Oyster House has been linked to a site on Perkins Road just west of Acadian Thruway.

“It’s a snowball running downhill,” Tom Cook, owner of Cook, Moore and Associates, a Baton Rouge commercial real estate appraisal firm, says of concerns about competing with Riviere. “It won’t detract from all the cool stuff happening. It’ll just become part of the choices.”

Although Yoshihashi could not yet project how many visitors Riviere would draw, she did say Pinnacle’s L’Auberge du Lac helped create a “halo effect” for Lake Charles.

Liz Deville, administrator for the Southwest Louisiana Economic Development Alliance, says the casinos are boosting their economy with visitors, and their restaurants are doing well. They also have helped attract new hotels, a new mall and new chains [such as Starbucks Coffee].

“They give back to the community,” Deville says. “We’ve seen good things from it. The taxes are put back into the community, parish and region.”

However, a possible loser in a three-way gambling pie could be one of Baton Rouge’s two existing riverboat casinos—Hollywood Casino or Belle of Baton Rouge—along the Mississippi River in downtown, according to economist Loren Scott’s study. “Baton Rouge is a two-boat town,” he says, and Riviere, with its additional slots and game tables, would be the likely winner. As to who goes, he says, “It kind of depends on who blinks first.” If that happens, he believes the jobs potentially lost should be subtracted from Riviere’s proposed 1,070 jobs to accurately portray its economic benefit.

Paul Arrigo, president and CEO of the Baton Rouge Area Convention & Visitors Bureau, says losing a casino would not be good because they’ve helped attract events to the area like the U.S. Bowling Congress. Otherwise, Arrigo doesn’t see any negatives if Riviere draws visitors and provides more entertainment options.

Cook agrees Baton Rouge stands to be a big winner with the resort.

“This isn’t just new growth, collectively, it’s bringing a new city,” he says. Riviere will become part of a dynamic push to change Baton Rouge, bringing to fruition efforts by groups like the Baton Rouge Area Chamber and A6 toward making the city more attractive to younger people.

“If city officials want to draw new people, the city has to provide entertainment. It’ll bring another dimension to our city and the boats we have aren’t big enough to do that. Also, we have 30,000 to 50,000 new people having a dramatic effect on business, and it’s pushed a lot of them to think outside the box.”

That’s what the Mall of Louisiana is doing. A $100 million “re-merchandizing” expansion is under way with new lifestyle [the Boulevard] and power centers—turning the 10-year-old complex into possibly the nation’s first regional mall with a “lifestyle/enclosed mix” on the same site to appeal to the luxury market. In coming months, the doors will open to new trendy retailers and restaurants, including BJ’s Restaurant & Brewhouse and Bravo! Cucina Italiana Restaurant.

General Manager Todd Denton says Riviere will compete for mall dollars, but that’s part of the free market.

“We are kind of in favor of all development that’s done in a positive, first-class manner,” Denton says. “If you bring more positive venues of any sort to this whole area, it’ll be a plus for everybody.”

Whether Baton Rouge’s resort promises a zero-sum game or improves the pie relies on several factors, says Kelley Pace, director of LSU Real Estate Research Institute. While people are already coming to Baton Rouge, Riviere could get them to stay longer and spend more money.

“People who gamble get comps

to restaurants and hotels, and it could make it more attractive for them to stay there and that could pose some competition, but the vast majority of hotels are serving a well-defined clientele and Pinnacle’s hotel could help with LSU games,” Pace says. “Also, I don’t think they’re going to necessarily compete that much with well-known, stand-alone restaurants.”

Dottie Tarleton, vice president of Stirling Properties’ commercial investment division, says Riviere will just become part of the equation to attract affluent travelers.

“Obviously, I think it will create competition in the hotel industry,” Tarleton says. “But it will also add a new dimension to the entertainment industry by bringing in popular artists and performers that we typically do not see here in Baton Rouge. As far as the restaurant industry is concerned, the restaurant needs to be really good because that is what people are going to expect—both travelers and locals.”