Friday, Jan. 20, 2012 | 5:51 p.m.
- Siegel Group
Stephen Siegel yanks down a metal security shutter near the front entrance of what used to be Atrium Suites Hotel. Dust seeps from the opening as Siegel, whose company now owns the property, abruptly stops pulling.
“Why is this here?” he asks. “What is the point?”
The answer would seem to be to keep dangerous or unwanted individuals from crawling through that opening and accessing the front of the building. Problem is, each side of that opening is wide open to a walkway, which can be easily used by anyone who wants to wander to the doors of the hotel’s front lobby.
“This makes no sense,” Siegel says, shaking his head and chuckling. “It serves no purpose.”
So don’t fall in love with those metal shutters.
Siegel is founder and CEO of Las Vegas-headquartered the Siegel Group Nevada. You might know of the Siegel Group as the owners of 15 low-budget Siegel Suites residences in Las Vegas. Or, you might instead know the Siegel company for its recent interest in boutique hotels and resorts located in the heart of the city and in one of its most remote outposts.
Over the past couple of years, Siegel Group has opened Rumor across from the Hard Rock Hotel on Harmon Avenue (formerly the out-of-commission St. Tropez) and renovated Artisan, Gold Spike/Oasis and the Resort at Mount Charleston. Siegel began 2012 by finalizing the purchase of the old Atrium Suites, formerly Crowne Plaza, on Paradise Road just north of the Hard Rock Hotel.
The conclusion to draw from the way Siegel snaps up properties: You don’t want to play Monopoly against him. He turns Baltic into Boardwalk with a single traipse around the board. At the time of the purchase, Atrium Suites had deteriorated into a haven for homeless that was surrounded by unkempt botanic outgrowth and such human-created refuse as tossed-away Marlboro cartons, Taco Bell bags and Bud Light bottles.
Siegel’s company completed the purchase in December, paying $4.2 million for the building and 3.75-acre parcel. The 202-suite property, where all rooms are larger than 500 square feet, had once been valued at $66 million. When it was known as Crowne Plaza, the hotel closed in 2008 for upgrades but never did reopen as its financial lender, Lehman Brothers, filed for bankruptcy. LV Opportunity fund bought the property out of bankruptcy from Lehman Brothers, then sold it to an eager investment group led by Siegel’s company.
Is it a wise financial risk?
“I’ve already been offered double, more than that,” Siegel says during a walking tour of the gutted hotel with his company’s director of business affairs, Michael Crandall. “We’ve been offered double-digits, already, for this property.”
So Siegel could sell the hotel today, right now, as-is, and make at least $5 million.
But Siegel is not a financial gymnast in the “flipper” mold. The new hotel – which will not be named Atrium Suites, one of the great certainties in Las Vegas commercial real estate – is next door to the Hard Rock Hotel. Siegel has effectively bracketed the HRH with the new acquisition and Rumor, and those who stay at the upgraded resort can perform a couple of cartwheels and get their gamblin’ on at the Hard Rock.
The new property will supplant Rumor as Siegel’s “signature” resort. Between 200 and 350 people will be employed during the hotel renovation and when it does, finally, open for business. The target time for that reopening is in 18 months, or by the summer of 2013.
“It has great bones, it has great meeting space, which is something we don’t have at Rumor,” Siegel says, waving his hand toward a 700-square-foot expanse that will one day play host to meetings of dozens of conventioneers. “A lot of the work here has already been done, too.”
The company’s first order of business was to clean and illuminate the parking lot and perimeter of the property. That makes the neighbors happy, for starters. It also opens up the parcel and lets the stream of motorists passing each day that something positive is unfolding at the closed hotel.
Inside, Siegel is eager to develop the pool area, through which guests can spill into a circular bar space. Expect a few cabanas out there. The suites are stacked six floors high with walkways looking down to a wide-open atrium space. The rooms themselves offer a plenty of space, there is a plan for at least a few video poker machines (which Siegel says visitors to Vegas have grown to expect in the same way they expect vending machines on each floor).
There will be some form of open entertainment at the property, and a restaurant whose concept is yet determined.
The target demographic is anyone in town for business, or who wants to stay at a distinctive property close to the action. Siegel has been approached by hotel chains like Sheraton, Hilton and Starwood to partner in the hotel. He’s not certain which path he’ll pursue. A corporate partner is fine for financial security, but also presents restrictions on design and function he might not agree with.
“We’re keeping everything open right now,” he says. “But the people we’re talking to agree that this is a great building. A great building.”
Eventually, Siegel says he wants to continue his measured, calculated growth. He eyes properties that could be improved and is eager to test his model of buying at a low price, renovating in a big-bad hurry and unveiling something pretty chic.
“I look at places on the Strip, and that is my goal, to be there,” he says. “Places like Circus Circus, that type of property. But I know, it’s a lot of steps from a Gold Spike to a Circus Circus. We’re moving in that direction, one step, then another, then another.”
True. At the moment, Siegel is occupied with the step that requires buying furniture in bulk and assessing discarded equipment.
At the end of the tour, he and Crandall stop at a structure that looks a lot like a wheeled, mobile bar. That is, in fact, what it is.
“This is a good portable bar,” Siegel calls over to Crandall. “We need to keep this. It’s in perfectly good condition.”
The tour is over. Saved was the bar. Not so fortunate were those pointless shutters.