In the ultimate city of one-upmanship, who are the original upmen?

Michael Kornick argues that Las Vegas hotels were not on the cutting edge of food and beverage nightlife until the Palms Casino Resort opened in 2001 and, with it, a buzz surrounding its ghostbar, Rain Nightclub, and N9NE Steakhouse. A successful food and beverage blueprint was created, and many other hotels in Las Vegas followed suit.

“Our first venue flipped the city on its head,” says Kornick, consulting chef and partner, N9NE Group. “All the big hotels have added destination nightclubs now. Before, there were basically just Studio 54, House of Blues, and Rum Jungle.”

“I’m a pretty humble guy, but I can say that when we opened Rain, it led to a huge marketplace for massive nightclubs,” says Michael Morton, co-owner, N9NE Group. “We did a lot of groundbreaking things, and I think we’re still the model because we have a different game plan.”

At the core of that game plan is a unique partnership between Morton’s N9NE Group, which operates the venues, and George Maloof, owner of the Palms Casino Resort. It’s one that goes beyond the common hotel and third-party food and beverage scenario of landlord and tenant.

“It’s a 50/50 partnership. If we have a bad month, everybody has a bad month. From the hotel’s perspective, we’re much more than a landlord. We want to see it succeed and take part in that success through the bottom line profits,” Maloof says.

“We add value to the Palms because they’re our 50 percent partner. If the guest has a $350 room rate, then they go to one of our restaurants for dinner, we’ve got them for another $100 a head before they go to sleep,” Kornick says.

The N9NE Group currently runs seven food and beverage outlets at the Palms, but their partnership with Maloof started at a single freestanding N9NE Group venue in the late ‘90s.

MEETING OF M &M
Before moving into the Las Vegas market, Morton (son of Arnie Morton, famous for Morton’s Steakhouses and the original Playboy Clubs) and his N9NE Group business partner Scott DeGraff opened a successful Chicago nightspot called Drink in 1992. Morton and DeGraff opened another Drink in Las Vegas in 1995, and one of its regular customers was George Maloof.

“We were basically the only nightclub in town, and all the hotels wanted nightclubs when they saw there was a real market there [at Drink],” Morton says.

“When I was planning for the Palms, I wanted to open a nightclub, and I thought of Michael and Scott first,” says Maloof. “That’s how it started.”

Morton was about to open a freestanding N9NE Steakhouse with ghostbar above it on Chicago’s trendy West Randolph Street. Maloof decided that was the concept he wanted to replicate at the Palms—only modified to take advantage of his property’s strengths.

Ghostbar was built on the 55th floor of the Palms Tower, giving customers some of the best views of the city because of its location off the strip. It also features an outdoor patio with a glass floor where guests can look several stories down at the pool.

“It immediately became a destination. Not only because of the design, but also the positioning of where it is located. Everybody talked about it, and it helped us create an identity,” Maloof says.

On the ground floor of the Palms Tower, N9NE Steakhouse opened to rave reviews, giving diners a high-end option in-house, and the 25,000-square-foot Rain Nightclub helped establish the Palms as a premier nightspot in Las Vegas.

KEEPING DOLLARS IN-HOUSE
In 2006, the Palms opened its $600 million, 53-floor Fantasy Tower, and at the top were three more N9NE Group food and beverage outlets: Nove Italiano restaurant, the Playboy Club, and Moon nightclub.

Because the 50/50 partnership between N9NE Group and Maloof means they share in the food and beverage profits, it’s in everyone’s interest to keep the outlets full of people. As a result, the Palms Tower was specifically designed so guests could spend an entire evening of dining and nightlife without leaving the property.

“The synergy you get between multiple venues is really amazing. To get a multi-venue deal is very difficult, but that’s the difference between being a dependent in a hotel and being a partner with a hotel,” Morton says.

In the Fantasy Tower, customers can eat dinner at Nove Italiano on the 51st floor, take an escalator up to the 52nd floor to the Playboy Club, then go up to the 53rd floor for late-night clubbing at Moon.

“In our three new places, all your needs are met in those three floors. Although we’re in the hotel, we can really maintain our space and our identity. It’s a city within a city,” Morton says.

THIRD-PARTY PERKS
The N9NE Group enjoys all the traditional advantages of being a third-party food and beverage operation in a large hotel: a “big brother” supplying the infrastructure and maintenance; large unit discounts from vendors on food, beverages, and supplies; centrally located loading docks and storage areas; insurance and other benefits for employees; the latest point-of-sale technology; and in-house promotion and marketing.

Many of those perks are magnified by the 50/50 partnership with the Palms. For example, if maintenance is needed in one of the restaurants, the Palms makes it a priority because waiting could directly affect their bottom line.

“If we need a wall painted, they’ve got a painter there overnight. We have really sophisticated resources. We currently have 105,000 square feet under management indoors, plus the pool, and we couldn’t do anything close to this scope if we didn’t have the infrastructure of a hotel,” Kornick says.

THE COST OF DOING BUSINESS IN THE SKY
Of course, when multiple outlets operate more than 50 floors high, there are logistical challenges most ground-dwelling food and beverage venues don’t have.

“Any time you need something, you’re basically at the top of the tower, so you have to go down to get it. Those things can be overcome, but it requires extra planning, preparation, and organization,” Morton says.

Everything a restaurant and nightclub might take for granted—easy garbage removal, window washing, bottle disposal, replenishing food and beverage supplies, maintaining inventory, and employees arriving for work on time—are all complicated by the reliance on service elevators going up and down 50 floors every time.

“We don’t run draft lines up there, so we are constantly bringing product up and constantly removing trash. But it’s the cost of doing business in the sky,” Kornick says.

He says the situation isn’t much different than being at a remote resort, where the staff is trained to work around the obstacles. The overall advantage of the location is that the guest will pay more to be there.

“Our cover charge might be a couple dollars more than somebody who has a less-dramatic setting, but the expectation is when you go to the sky, the drinks are a couple bucks more and people just get it,” Kornick says.

SEAMLESS STRATEGY
The Palms opened Pearl, a 2,600-seat concert venue, this past spring. It is funneling even more customers to the N9NE Group’s food and beverage outlets before and after shows.

The Pearl is not a N9NE Group venue, but it’s another example of something created to work seamlessly for the overall benefit of the hotel. There are no islands of entertainment at the Palms, no clash of concept and culture, and that’s one of the reasons every N9NE Group outlet remains unchanged since the day the doors opened in 2001.

“I think there’s an enhanced ability of working toward a common goal and owning our ideas together. It just focuses on success,” Morton says.

CHRISTIAN MARGESSON, TALKS ABOUT HOW WINE FITS WITH COCKTAILS
HOTEL F&B recently met with Christian Margesson, wine director for the N9NE Group, to talk about how wine fits into a cocktail atmosphere at the Palms and about using the excitement of Las Vegas to upsell the guest.

N9NE Group has two restaurants in the Palms: N9NE Steakhouse and Nove Italiano. What are the wine lists like?
N9NE Steakhouse has basically an international list with more than 900 selections. It includes multiple vintages of Bordeaux, going back to 1945, including 1953 Lafite and 1961 Margaux. Nove Italiano has about 500 selections. We represent the 20 regions of Italy, with the wealth of the list being from Tuscany and Piedmont.

Because guests are focused on having a good time in Las Vegas, do you find it easier to get them to spend more money and try the older vintages?
Yes. They’ll say, for example, “I’ve never had a ’97 Shafer or a vintage Bordeaux.” It’s exciting to see people try big wines. They want to dine in luxury in ways they wouldn’t in their hometowns.

Is it difficult to sell wine in the cocktail atmospheres of Moon, ghostbar, and Playboy?
No. Wine sales have increased across the board in every one of our venues here. The younger generation has taken up the wine glass as well as the cocktail, so we have bottle menus in the nightclubs. We do high-end Cabernets, first-growth Bordeaux, and a small selection of Champagne that consists of Krug and about seven different vintages of Cristal in rosé and brut. We also have two three-liter bottles of Cristal, which is quite rare. They make very few of them. It’s a nighttime atmosphere, so we sell a lot of Champagne. It’s a big part of the nightclub business.

How often do you have tastings for your staff?
We taste blind two or three times a week. We place three glasses in front of each server—it could be two whites, a red, two reds, a white—and they go through the full process blind. They enjoy learning because it helps them increase their sales.

Education is big for us. We use the hedonistic scale, which is basically letting our staff judge the wine based on how much they enjoy it. You can read as many reports and scores as you want, but if you don’t like it, you won’t sell it.

You also oversee N9NE’s cocktail program. How do you separate yourself from the competition?
Anyone can throw rum, Coke, and lime into a glass. We base our cocktails on seasonal fresh fruits and multi-dimensional flavors. We just came out with a cocktail called N9NEade, which is our version of lemonade with Ketel One vodka, caramelized ginger and lemons, soda water, muddled mint, and Grand Marnier. It’s kind of a throwback to the real days of mixology. It’s an art form, and that’s where we really try to stay fresh.—MC

THE PERFECT NIGHTCLUB MIX
The ingredients for a hip and edgy nightclub aren’t always about cocktails, lighting, and layout. “The ideal nightspot has 250 good-looking, young, single men and 251 beautiful girls,” says Michael Kornick, consulting chef and partner, N9NE Group.

Kornick might be kidding, but he knows what a successful nightclub in Las Vegas looks like. He trains the N9NE Group’s food and beverage staff at the Palms and helps oversee the hotel’s Playboy Club, ghostbar, Moon, and Rain Nightclub. Here he explains the solution to a common hotel nightspot dilemma.

“There is often an uneven mix, due to group bookings or college guys on spring break coming down with eight people sharing two rooms. They’re here to spend money, but it throws the balance off in a nightclub. So one of the things we always try to do is attract the local female population to consider themselves regulars and VIPs. That gets the energy started,” Kornick says. He says the next step is to make sure there is a balance of ages as well as genders.

“We can’t rely entirely on the tourists. The local population provides a natural mix. It’s important because when a club is too young, it doesn’t get real spenders. If a club is too old, it won’t get a really late night, fun crowd,” says Kornick.

Finally, the end result should be a place that has a buzz and makes people want to spend money.

“They walk in and say, ‘This place has a vibe, and I’m happy.’ We’re selling a specific piece of real estate in the sky, and we need a good percentage of the buyers to be able to spend upwards of $100 a person to make it work,” Kornick says.—MC

BRINGING BACK THE BUNNY
Of all the N9NE Group outlets at the Palms, the resurrection of the Playboy Club in October 2006 has perhaps drawn the most attention. The concept is a natural fit for the N9NE Group—Michael Morton’s father, Arnie, helped Hugh Hefner create and develop the original Playboy Clubs, the first of which opened in Chicago in 1960.

Nearly 16 years passed from the time the last Playboy Club closed in Manila in 1991 until the new one at the Palms opened, which is currently the only one in the world. It’s a balance of old and new, honoring the original concept of the Playboy Club, including bunny outfits for the cocktail waitresses, while modernizing it to fit the Palms’ edgy vibe.

“We created a very sexy space when we brought back the icon,” says George Maloof, owner, Palms Casino Resort. “Everybody has heard of the Playboy Club, but very few ever experienced it.”

The club couldn’t open exactly the way N9NE Group and the Palms envisioned it, however, until a unique operational hurdle was cleared.

“We actually had to get a law changed in Nevada. We were never allowed to charge people a cover to get into a space that had live gaming. It was always open to the public and free flowing. We lobbied to change that, and we think it’s going to be copied throughout the strip,” Maloof says.—MC