|By Eric Eyre, The Charleston Gazette,
W.Va.McClatchy-Tribune Regional News
May 11, 2010--CHARLESTON, W.Va. -- Construction costs for The Greenbrier's new underground casino have escalated to $80 million -- four times initial project estimates, the resort's owner said Monday.
Jim Justice, who spent $20.1 million to buy the historic White Sulphur Springs hotel in May 2009, said the casino is expected to open July 2, three weeks before The Greenbrier hosts a PGA Tour golf tournament.
Justice said casino construction expenses skyrocketed because the size of the facility was expanded from 50,000 square feet to 102,000 square feet. Additional shops and restaurants also are being built.
Last year, Justice announced that the casino would cost $20 million, then later raised the estimate to $25 million when winter storms delayed construction. The casino was initially scheduled to open April 1.
"It's gotten bigger substantially," Justice said Monday. "It's going to be spectacular."
Justice also announced that The Greenbrier currently has 400 job openings -- everything from housekeepers to restaurant workers to groundskeepers. Justice said the number of resort employees would increase from 1,600 to 2,000 by the time the casino opens -- more workers than at any time in recent years.
Last week, Justice got a large infusion of cash by selling part of his holdings in Russian mining giant Mechel OAO.
Justice and two relatives sold 30.5 million Mechel securities for $228.75 million, Mechel announced. The underwriters on the deal have an option for another 4.5 million securities, worth another $33.75 million.
Justice said he first tried to sell the Mechel shares last Thursday -- the day the Dow Jones industrial average dropped nearly 1,000 points -- but the transaction "fell to pieces." Justice subsequently completed the securities sale Friday.
"It wasn't an easy thing," he said. "It took a lot of work."
Justice said the cash would be used by his company, Justice Family Group, and its 47 affiliated companies, including The Greenbrier.
"The deals we make are for insurance to keep doing things and move forward," Justice said. "It's about growing our business. We try to do positive things."
Justice also plans to build a $40 million "entertainment theater" at The Greenbrier that would host nationally known entertainers. Justice hasn't set a timeline for that project.
"My whole purpose is to see people have jobs and do good in West Virginia," he said.
Justice said room reservation calls were up 500 percent compared to the same time last year. Large-group bookings are up 400 percent, he said.
"There's a real buzz," Justice said. "It's really coming. It's just hopping."
Justice said The Greenbrier Classic golf tournament -- scheduled for July 26 to Aug. 1 -- would provide a significant boost to the resort. Rooms are already sold out for the PGA event. The Greenbrier has an agreement with the PGA to host the tournament through 2015.
"It will be a chance for millions of people to see how great West Virginians are," Justice said.
Reach Eric Eyre at email@example.com or 304-348-4869.
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