Las Vegas Sun

November 20, 2018

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Hold ‘em or Fold ‘em?

Forget Megabucks, forget Powerball. What if you were sitting - quite literally - on top of the payoff of a lifetime?

That's what it's like for the few remaining individuals who own land along the Strip, now selling for $2 million, $5 million - even a staggering $8 million - per acre.

The question is begged: sell out or hold out?

Some take the money and laugh all the way to the bank. Others stay put, either waiting for values to soar even higher, or content to turn a tidy profit each year. A few remain for reasons less tangible, more personal. Whatever their choices, all are already winners in the ultimate Las Vegas lottery.

The Sellouts

Small proprietors, some of whom bought their land for a song years ago, have grown accustomed to - even weary of - the offers dangled before their noses. They come from local casino magnates, national conglomerates, time-share operators, international developers from Hong Kong and the Middle East - all with their dreams of an Asian-themed food corridor, a frozen yogurt franchise, an "Adidas-town" to rival Nike's.

"There's a lot of interest," says Hugh Northington, who owns and manages the Olympus Inn at 3941 Las Vegas Blvd. South, with his wife, Michel. "We get dozens of calls a week."

But now, with motel occupancy rates dropping to a scant 68 percent, hefty fees for the Strip's "beautification" process and fears of overdevelopment on the rise, many of these proprietors are beginning to court these offers as coquettishly as Scarlett O'Hara.

Yvonne Parker, the owner of the Fez Motel and the adjacent Western Wear store at 4213 Las Vegas Blvd. South, reportedly wants around $3 million for her .67-acre plot. Linda Haromy, a European-based owner of the land the Olympus Inn is on, wants $40 million for her 6-acre stretch. And after more than 25 years running the Glass Pool Inn, a family-run business dating back to 1952, even Allen Rosoff and his wife, Susie, are flirting with the idea of cashing out their own 1.5 acre - including its landmark swimming pool. All seem to think the sky's the limit.

"What's left of the Strip is from Tropicana to Russell, these four blocks. So if you want to get on the Strip, you have to buy these small motels," Susie Rosoff explains, waving her hand out the front door at the land pinpointed by many as the Strip's last frontier - for now, at least.

Above her is the most tightly developed stretch of land in the city. Below her is the airport, cutting off zoning for high-rise megacasinos.

Susie Rosoff figures that for about $20 million, a developer could buy her entire block and have 1,000 feet of prime Strip frontage. "If they're willing to make a legitimate offer, they could package it easily," she notes. "They couldn't buy a better location."

But others say these proprietors' eyes are bigger than their stomaches.

"Everybody thinks it's a gold mine out there, and they don't want to sell and leave any money on the table," Rick Trusdell, a real estate broker and president of Cornerstone Co., says. "But there's been cases where it hasn't happened, and people are left sitting there."

Many developers seem to be taking a wait-and-see stance, with 20,000 rooms expected to be added in the next few years. And casino executives say that packaging that many small parcels together can be a daunting proposition - one holdout can shatter the deal.

Indeed, many of these proprietors admit that their land has been "on the market" for six months to a year, the only offers so far called "insultingly low."

"The ones that get to reasonable values wind up selling," Trusdell explains. "The ones that don't, if you talk to them, they want $2 million, $3 million an acre, if you talk to them tomorrow, they'll want another million. There has to be a willing seller - and some of these people aren't willing sellers."

Sammie Armstrong, for example, has received three written offers for his .9-acre plot of land at 3951 Las Vegas Blvd. South, including one for as high as $4 million - and that was before he had built a $1 million office building on the property. He still turned it down, waiting to reach the $5 million mark. And if it doesn't come? "I'll probably pass it on in my will," he says, laughing.

Northington defends the grandiose sale prices, quoting a famous real estate saying: "What's the land worth?" "It's worth," he declares, "what you can get for it."

And further down the Strip, some have gotten quite a bit.

After years of turning away would-be investors, the late Bernie Zeldin, owner of the 40-year-old Tam O'Shanter Motel across from Treasure Island, finally sold out to the Venetian for the tidy sum of $12.4 million for the 1.5-acre plot.

"(For years), my father wouldn't sell," hotel manager Leah Zeldin recalls. Her sister, Julie Pfieffer, tells of the time that hotel magnate Howard Hughes offered their father $3 million - cash - but didn't deliver it at the agreed-on time. Zeldin promptly told him it would now cost $6 million. Again, the delivery was late, and Zeldin called off further negotiations.

"This was his, he built it, envisioned it," explains Zeldin, who seems to have accepted her motel's future as rubble with a Zen-like calm, planning to donate the motel's sign to the city's Neon Museum. Shortly before his death two years ago, the elder Zeldin finally finalized the deal. "He wanted to take care of us," she says simply.

The Holdouts

The most famous hometown holdout may be time-share developer Mike Flores, who continues to defy Steve Wynn with his 1-acre plot wedged between the Mirage and the Treasure Island.

Then there is the LeWinter family, owners of the Rosewood Grille restaurant, the members of which have reportedly turned down offers in the millions from Las Vegas Sands Inc. for the 87-foot-wide property pushed up against the soon-to-open Venetian hotel-casino.

How do they resist taking the quick cash-out?

"It's like having a child," explains Alan LeWinter, whose father picked up the property in 1961 for only $285,000. "If someone said 'I'll make you an offer,' well, do you want to come up with a price for your child?

"If the right offer were there," he admits, "it would be difficult to turn down something economically for sentimental reasons. We're glad nothing like that has come along."

According to LeWinter, the Venetian's buyout offers haven't been as decadent as is rumored, but only for "a couple times earnings," giving his family no "economic justification" to consider the idea.

Also, LeWinter adds, "we still see the Strip as a great opportunity, and it's difficult to get back in after leaving - to sell means giving up any chance of ever having property on the Strip (again)."

Realtor Charles Ruthe, who has brokered deals up and down the Strip, explains that there are two main reasons property owners don't sell.

"They feel (the value) is going to continue to increase, or they are getting a good return on their present investment," he says. "If they're getting a 10 to 15 percent return and they sold it, they couldn't get that return from the bank. Once in awhile, you run into people (who hold on) for personal or family reasons - but that's the exception."

One of those exceptions is the Brooks family, whose daughters have preserved the land purchased by their father, Robert Brooks, including a 1.45-acre plot of land at 3735 Las Vegas Blvd. South. "I don't think she (Robyne Brooks) will ever sell that land," notes Joe Higgins of Westlodge Hospitality, a hotel operator who was leasing the land for Travelodge South and paying Brooks nearly a quarter of the gross revenues for the privilege.

Other longtime holdouts include the Colleli family, which has owned the White Sands Motel on the primo southeast corner of Tropicana Avenue for more than a decade.

One rumored holdout is Arco AM/PM gas station franchisee Chuck Theobald, assumed to have turned down a multi-million-dollar offer from the Excalibur for his tiny plot right on its doorstep. But Theobald denies it, saying that the land and the right to sell it is not his, but the company's.

At the time of the hotel's construction, there were negotiations between the two, Arco spokesman Scott Lowell concedes. "At the time, we thought it was worth keeping," he says. "There have been no negotiations in years."

The Excalibur was forced to encircle the station, with its easy access right off Las Vegas Boulevard. Still, Theobald chuckles at the defiant location, adding: "I'm sure the Excalibur would like to get rid of it."

Other recent buyers don't think it's ever too late to get in on a good thing.

Bob Cione, a general partner in Sierra Oil & Gas, which owns the SmartMart Texaco station at Las Vegas Boulevard and Diablo, points out that Strip value goes up 15 percent each year. The .75-acre plot he and his three partners bought for $750,000 in 1994 doubled its value in 18 months.

"Let's face it, you don't go into these ventures personally, you go in to turn a profit," says Cione, whose partnership invested $1.8 million in the project and has already turned down offers as high as $2.8 million to sell. Still, "everything has a price," Cione admits. The price for his corner plot? $5 million.

Other companies, such as Chetake Development, prefer the certain investment strategy of steady income over fast cash. "You sell a property, and you get hit with taxes," says Trusdell, who is managing and leasing Chetake's new multimillion-dollar shopping center, Akita Plaza, at 3999 Las Vegas Blvd. "They're looking to hold the property for many years to come."

But smaller proprietors say there is no way an individual can buy multimillion-dollar property and make a living anymore.

"People see the 'For Sale' sign and come in, thinking they might open a restaurant," Michel Northington of the Olympus Inn says. "They aren't going to do that on millions of dollars worth of property."

"As the land gets expensive, you can't make it as a single-story structure," LeWinter agrees. "Most of the small properties are getting picked up and incorporated by large companies. Pretty soon, we may be the last single-story structure on the Strip."

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