Friday, April 9, 1999 | 10:25 a.m.
Bob Stupak may find raising the real Titanic easier than raising the money for a faux ocean liner near downtown Las Vegas.
Skepticism voiced by a Wall Street analyst and a rejection by the Las Vegas Planning Commission Thursday night may loom as icebergs.
The flamboyant gambler said at a Thursday news conference that he plans to finance an oversized 1,200-room replica of the Titanic by selling time shares in the project. Purchasers could stay a week each year at the hotel.
Stupak said he'll offer "interval ownerships" for 800 of the hotel's rooms at a price of $28,000 to $29,000 each. A complete sellout to 40,000 buyers would raise more than $1.2 billion, he said.
But first he would need approvals from the city, which, given his experience Thursday night before the Las Vegas Planning Commission, may be tough.
In a 5-0 vote, commissioners rejected Stupak's proposal to a change the zoning on his proposed site from limited commercial use to general commercial use, which allows for hotels.
The resort is proposed to be built on 10 acres on the east side of Las Vegas Boulevard South at Park Paseo Street, just a bit south of Charleston Boulevard. The existing Thunderbird Hotel -- owned by Stupak -- and the Talk of the Town topless club would have to be razed to make room for the project. Stupak already operates a wing of the low-rent Thunderbird as the "Titanic Resort."
Commissioner Leni Skaar told Stupak Thursday night that the requested zoning change would allow for more aggressive development, which is inappropriate considering the proximity of residential areas.
"This kind of development should be kept away from low- and medium-density residential areas and is often used as a buffer between commercial and industrial zones," Skaar said.
A number of residents, including Mary Hausch, attended the meeting to complain about traffic, the possible lowering of residential property values, and the Titanic's size, which would cut off views.
"These 280-foot towers are going to drop a shadow on the homes to the east," Hausch said. "These are some of the oldest homes in Las Vegas and a lot of people have put in a lot of work to restore them and build a nice neighborhood. This project is out of place here."
Commission Vice Chairman Craig Galati also said it was hard for him to grant the zoning change without first seeing a site plan to determine if what is planned is appropriate next to a residential area.
Stupak and his lawyers opened their presentation with a slick video showing the sunken Titanic rising from its resting place in the Atlantic Ocean. The video then showed a shot of the proposed resort, complete with iceberg shopping mall, while singer Robert Goulet provided the narration.
Commissioner Hank Gordon tried to remind the commission, speakers from the neighborhood and Stupak that the proposed resort wasn't the issue Thursday night.
"At issue is a zoning change, not wether a 15-story boat or anything else should be built," Gordon said. "It's really not appropriate for people to comment on whether they want the boat or not, and I'm sorry that the applicant came with a video of his boat tonight, because that's not really appropriate either."
The City Council will next review the zoning request at its May 10 meeting.
Stupak said he did not have any immediate plans for gaming at the resort.
"We need to get rid of the adult bookstores, topless bars and other problem areas that are in the gateway to Las Vegas," Stupak said. "My own Thunderbird is a haven for abuses, including prostitution.
"The whole area has to be cleaned up, and we need a gateway from the Strip to downtown or the city of Las Vegas will be leaving everything to Clark County."
While that may be true, a Wall Street analyst cast doubt on whether this particular proposal is the answer.
"The time-share business is heavily dependent on bank financing," said Ladenburg Thalmann & Co. gaming and leisure analyst Andrew Zarnett.
"Typically, 90 percent of the units in a new time share are financed sales, with a 10 percent down payment. Against that sale, the developer usually pays the sales people a 10 to 15 percent commission and finances the remainder of the project.
"This is a business that uses cash, it doesn't generate cash," Zarnett said.
The analyst was also less than bullish about the proposed time-share prices and location for the Titanic.
"The nicest time shares being sold in Las Vegas now are at the Polo Towers, and they're selling for $13,000," Zarnett said. The Polo Towers are on the Strip amidst a group of upscale hotel-casinos including the MGM Grand, the Monte Carlo and the new Aladdin.
And Zarnett noted that properties further north along the Strip haven't fared well recently.
"Given Stratosphere's lack of success, which was blamed on location, it would be difficult to finance any new (project) north of that project," Zarnett said.
Stupak was the inspiration behind construction of the Stratosphere and its 1,149-foot tower, but left the parent company as chairman in a dispute with its former majority owner Grand Casinos Inc. Billionaire Carl Icahn gained control of Stratosphere when the resort went into bankruptcy.
Stupak came up with the time-share concept after New York investment bankers turned cold shoulders on his Titanic proposal last summer. And Wall Streeters weren't the only ones with a somewhat skeptical view of the plans.
"I listened to those numbers and they were intriguing," joked entertainer Robert Goulet, who performed at Thursday's press conference. "After all, he's promised me points in the deal. But if I had my choice, I'd take my $10 million right now and go home."
As he explained his plans, Stupak acknowledged there would be cynicism. "But," he said, quoting Titanic designer Thomas Andrews, "it's not what you think, it's not what you feel, it's what you do that counts."
And what Stupak wants to do, he explained in an extemporaneous speech dotted with touches of his trademark hyperbole, is build a larger-than-life version of the ill-fated ocean liner and the iceberg that doomed it.
The 400-foot high resort would straddle Las Vegas Boulevard, with a seven-story parking garage on one side and a 100,000-square-foot "iceberg" containing a shopping area next to the replica of the ship.
Stupak strode on stage sporting a bright yellow slicker worn on a 1994 Titanic exploration and lent to him by an expedition member. "I feel like I'm wearing a piece of history," he said modestly.
"Las Vegas needs a shot in the arm, something special that draws people into the downtown area," he said. "This plan will give people an opportunity to buy a piece of the Las Vegas Strip and the Titanic.
"But they're buying more than that," he said. "They're buying a cruise to history that'll last forever.
"In the near future, we'll have a spinoff or a merger with a real public company, like Microsoft," he said. "And all the shareholders will have a right to buy their interval ownership in the Titanic. After that, and then and only then, will the public be able to buy."
The time-share sales will raise about $1.2 billion, Stupak said. "Promotions will cut down on the amount, but we'll still have enough to build it. And we're already looking at a piece of land in Atlantic City for a Titanic New Jersey and possibly a Titanic in Mississippi."
After the press conference, a towering security guard escorted Allen Rubin, the angry chief executive officer of Los Angeles-based Titanic Resort, from the area as he complained about copyright infringements.
Also complaining about copyright issues was another businessman, Andrew Marocco. He established a web site called hoteltitanic.com and presented designs to various Las Vegans last year, including someone who showed the plans to Stupak. "He said we could sue him," Marocco said Thursday.
Stupak recently bought a small stake in RMS Titanic Inc., a publicly held company that exhibits artifacts from the sunken ship and is salvor-in-possession of the wreckage giving it salvage rights as long as it maintains a presence at the Atlantic Ocean site.
Stupak scoffed at questions about potential trademark or copyright conflicts.
"I've owned a place called the Titanic Resort behind the Thunderbird for a while," Stupak said. "That should resolve the trademark issue."
Said a Stupak associate: "Bob's motto is that 'It's better to ask foregiveness than ask permission.' "
SUN REPORTER Erin Neff contributed to this story.