Friday, Aug. 27, 2004 | 5:09 a.m.
What started as a trickle of proposed high-rise projects has quickly turned into a flood as land owners and developers think of ways to cash in on the latest Las Vegas building boom.
There's plenty to buzz about with 50 high-rise projects, totaling 82 towers, announced or on the drawing boards:
With 50 high-rise projects planned, even a 50 percent success rate would represent a high-rise boom by Las Vegas standards. If all are built it would double the number of existing high-rise towers.
A combination of factors is driving the sudden interest in what is being called the Manhattanization of Las Vegas.
A shortage of available property has sent land prices soaring, forcing developers to maximize densities. Las Vegas also has become a more popular destination for tourists and is growing in popularity as a second-home site.
And a new urban class is demanding the convenience and amenities offered by condos such as Park Towers and Turnberry Place, which are near the Strip.
There might even be a market for moderately priced high-rise condos near the Strip to be occupied by thousands of casino workers who now commute from the suburbs.
Thomas Schoeman, president of JMA Architecture, said the unique makeup and growth of Las Vegas make it a prime candidate for high-rise living. JMA Architecture has been at the forefront of the high-rise boom, planning and designing several buildings for developers.
"We do have an urban center core -- downtown (Las Vegas) and the Strip -- and 60 percent of our employment base is in that core. It makes all the sense in the world to provide housing in that core," he said.
As Las Vegas becomes a "more mature and sophisticated community," people will want more choices in housing beyond single-family detached homes, he said.
And Las Vegas has become a desirable place to own a second home, Schoeman said.
Despite all the talk and plans, construction is under way on only a handful of time shares and hotels and just one condo. And it's unclear how many of the proposed high rises will actually be built.
This wouldn't be the first time luxury high-rise condominiums caused a buzz in Las Vegas, only to be quietly canceled after pre-sales didn't pan out.
Good examples are Versailles at Peccole Ranch (announced in 1998, but put on hold and now revived as the proposed Queensridge Towers), twin towers The Great Masters (announced in 1998, but later dropped), and a Donald Trump condo that was announced in 2002, but didn't pan out. Trump is now promoting a revised condo plan with local partner Phil Ruffin, owner of the New Frontier.
High-rise condo developers must have a certain level of commitment, often reflected in contracts for units, before lenders will fund the projects.
Development tracker Richard Lee, vice president/director of public relations at First American Title Co., believes all the projects are viable, but he said they will most likely be in phases.
"If everybody started on every project at the same time, there would not be enough contractors and there would be too many (condos) on the market at the same time," he said. "Some will start earlier, some down the road and all will watch each other on the velocity of sales."
Analyst Brian Gordon, a principal with Applied Analysis, wasn't as optimistic.
"From a market demand and financial feasibility standpoint, half will come online, half will be delayed or will be deferred forever," he said.
Developer Lorenzo Doumani said many of the projects announced won't ever break ground.
"A lot of them are b.s., with no real plans or anything," he said. "It's amazing all that's been announced, but nothing has happened."
While the recent rush to build up is unprecedented in the Las Vegas Valley, the area has some experience with buildings more than 12 stories, considered the high-rise threshold.
Just four years ago, there were about 75 high rises in the Las Vegas Valley, including:
There are also some 10-story apartment and condo buildings that opened in the 1970s near Flamingo Road and Swenson Street, including the 10-story Wimbledon Tennis Club condo tower and the 10-story Vegas Towers apartments. And there are several office buildings eight to 11 stories around town.
Two high-rise luxury condominium projects set the stage for the current potential boom. Park Towers opened in 2001, and Turnberry Place opened the first of its towers the same year.
Park Towers has two 19-story, 84-unit towers at Howard Hughes Parkway and Flamingo Road. It was built by Irwin Molasky, who also built the valley's first high-rise office building, Bank of America Plaza, downtown.
Molasky hasn't built a high rise since Park Towers, but he said the future is in high-rise buildings.
"We believe the future is in vertical living, and we are looking into residential opportunities at this time," Molasky said.
Many credit Turnberry Place, developed by Florida-based Turnberry Associates, with showing the real estate and development industry that there is a market for such a product in Las Vegas.
Turnberry Associates, which recently completed its third 40-story Turnberry Place tower at Paradise Road near Sahara Avenue, is working on a fourth tower there.
"Turnberry started this whole trend, and suddenly it became very popular," said Chris Bentley, principal/broker of the Bentley Group, which focuses on multifamily development.
Since the opening of those two projects, a few high rises have opened:
And since then the 50 residential and commercial projects have been proposed throughout the Las Vegas Valley, and more are announced almost every week.
Estimates of the number of residential units in high rises in different planning stages range from 11,000 to 15,000.
"We're talking to experienced people from Chicago, New York and London. They look at this market and say it is just ripe, it is perfect, and it is next," Lee said.
A condo-hotel unit is different from a time-share unit because of the way it is owned. A condo-hotel unit is purchased by a single owner, who can use the condo at any time. When the owner is not using the unit, he or she can put it into a rental pool, and it will be rented out by the night, like a hotel room. Some condo-hotels limit the amount of time owners can use the units.
Some of the high-rise condo and condo-hotel towers that are most promising, based on the developers' track records here and in other markets, include:
Krystle Sands is being developed by Florida-based developer F.W. "Freddie" Schinz, who has been developing residential properties -- everything from high-rise towers to town houses -- for 30 years in Florida. He currently has one of four high-rise towers under construction in Orlando, about a mile from Walt Disney World, as part of Schinz's Blue Heron Beach Resort.
The sales center is expected to open by mid-September and construction is scheduled to begin in January, Lorenzo Doumani said. Existing buildings will be demolished in the next two weeks, he said.
The tower will be built in conjunction with a luxury resort property that includes a Conrad hotel by Hilton.
The tower is planned by Nevada Development Partners, a partnership of Aaron Yashouafar, chief executive of Milbank Real Estate Services Inc., a Los Angeles-based real estate company, and David Pourbaba and Neil Kadisha, both developers from Southern California.
Following the success of Turnberry Place, that company is working on two future Las Vegas projects. Turnberry's The Residences at MGM Grand is a condo-hotel behind MGM Grand that recently sold out its first tower and will eventually have three towers with the possibility of more. Construction on the first 38-story tower is expected to begin this month.
It is also moving forward on its Madison Towers condominiums at the northeast corner of Karen Avenue and Paradise Road, postponed after Sept. 11, 2001. The company plans to open a sales office at the 11-acre site later this year, with construction starting in the spring.
Plans currently call for two 40-story towers and more affordable prices than the nearby Turnberry Place.
Prices have not been set, but they will most likely start at $300,000, said John Riordan, vice president of sales.
"We think there's a big market for that, for people who work on the Strip," he said.
While numerous midrise condominium projects have been built since Molasky finished his two towers in 2001, and as Turnberry continues to build, no other developer has built a high-rise condo tower in the Strip area since -- although dozens have been approved. Only one, Metropolis, is under construction. Others are in preliminary construction stages.
But with increasing land prices -- recent sales for residential land ranged from $154,500 an acre in the northwest valley to $1.5 million an acre at Lake Las Vegas -- and a push toward more urbanized living, the high-rise condo-tower trend appears to be for real.
"Land pricing is going to make it more financially feasible. With people looking to get the highest densities possible, you can spread the costs across more units," Gordon said. "Second is land availability. Finding large enough contiguous parcels to develop single-family homes is more difficult."
The flurry of potential high-rise development has prompted Clark County to work on a policy on what heights are appropriate in different areas of the valley and what types -- and how much -- of different commercial uses should be mixed in with residential properties.
"We will be looking at what is the appropriate building height for mixed-use developments, different locations and what constraints there may be," Clark County Planning Manager Rod Allison said.
County commissioners agreed Aug. 18 that project applications already in the pipeline or approved should not be delayed or governed by the policy that emerges from the review of high-rise issues.
A committee will prepare an ordinance based on its research, and will present it for feedback to area town boards, the county's steering committee and growth task force, and the Regional Planning Coalition, Allison said.
The ordinance will be presented to the County Commission by December, he said.
One issue sure to come up during the county review is whether high rises should be limited to the Strip area or allowed in the fast-growing suburbs.
Citizens already have voiced concerns about suburban high rises, although projects proposed for downtown aren't expected to face opposition.
Schoeman has designed three 18-story towers and one 14-story tower for Queensridge Towers for Peccole Nevada Corp. and Executive Home Builders Inc., to be built at the southwest corner of Alta Drive and Rampart Boulevard, across from the Suncoast. The 381-unit complex will be built in two phases.
Schoeman said there is demand from people who want luxury condo living, but don't want to live near the Strip.
"There is a real desire in these planned communities to stay within the planned community, but to get out of single-family housing and the obligations of maintaining a single-family home," Schoeman said.
In the southwest, near Durango Drive and the Las Vegas Beltway, two 270-foot tall towers of the Paramount Professional Plaza were recently approved by the County Planning Commission. Developers originally envisioned two 300-foot towers, but after a public outcry the height was reduced. The residential towers are part of an "urban village" that would include commercial uses.
But some in the development community are opposed to such suburban high rises.
"I would hate to see high-rise product be built in the suburbs. I don't think it's consistent with the skyline out there," said Rich Worthington, Molasky Group president. "High-rise product by its nature is urban product and belongs in an urban environment."
His one exception is Summerlin, which has always planned a dense urban core, with mid- and high-rise buildings, for its Summerlin Centre.
Plans for Summerlin Centre, east of the beltway between Charleston Boulevard and Sahara Avenue, include Red Rock Station Casino now in the preliminary stages of construction, a planned 1 million-square-foot mall, offices and a residential component. The recent announcement that General Growth Properties Inc., a large developer and owner of malls, will purchase Rouse could change those plans.
Many developers have built, or plan to build, midrise condos, rather than high-rise ones in the outlying areas. Many said these satisfy the public demand for condo living and the developers' desire to build the highest densities possible, while providing prices that many locals can afford.
Park Avenue, a midrise condo complex of 20 three- and four-story buildings totaling 642 units at the southeast corner of Las Vegas Boulevard South and Agate Avenue in the far south valley, has been extremely successful, local real estate experts said. Park Avenue base prices range from $179,900 to $461,500.
Literally in Park Avenue's back yard is the Manhattan Condominiums, developed by Gemstone Development. Preparation of the land recently began. Plans call for nine four-story buildings totaling 692 units.
"The buyers have been mostly locals, and that's what we're aiming for," developer Alex Edelstein said. "We are building houses for people who want to live here."
Prices range from $150,000 to $400,000, he said.
The Strip and newer developments are not the only areas experiencing a surge in planned condos.
Las Vegas is pushing a renaissance in downtown viability by supporting midrise and high-rise living.
Las Vegas officials have made it clear they want dense urban living and will push such projects quickly through the permitting process.
"Height, bulk, setback and parking are all negotiable," said Steven Ressler van Gorp, redevelopment officer for theOffice of Business Development. "The council tells us, 'the taller the better.' "
And the developers have answered.
Australians Victor Altomare and Joseph Di Mauro recently announced plans for a 940-foot-tall tower, just shy of the Stratosphere's 1,149-foot structure. The tower is planned for the northeast corner of Sahara and the Strip, north of the Sahara Hotel.
"Three years ago we were only getting affordable projects downtown. Then we got the wave of high-end condos," Ressler van Gorp said. "The next wave to be built will be family units, courtyard units but at a price we can afford, comparable to suburban home prices. But the first wave is $300,000 to $1 million condos."
One of the best-known downtown projects is SoHo Lofts, a planned 120-unit, 15-story tower at the southwest corner of Hoover Avenue and the Strip.
Although construction has yet to begin (the site is currently being prepared), the project's developer, Sam Cherry, is so bullish on downtown he has begun plans for two other towers -- the Newport Lofts at the northeast corner of Casino Center and Hoover, and the Stanhi Building near the SoHo Lofts. Plans for the Newport Lofts, which call for a 17-story, 131-unit tower, will be presented to the Planning Commission in September, Cherry said.
Las Vegas officials have even solicited for high-rise residential projects to be built on city-owned land and are in negotiations with a development company that is planning a complex of buildings 11 floors or less.
Doug Lein, economic development manager the Office of Business Development, said the under-construction World Market Center is also fueling area residential towers.
The World Market will be a massive 10-story, 1.3-million-square-foot furniture show room at Grand Central Parkway and Bonneville Avenue.
Lein said for every 1,000 square feet of showroom space, the companies need a full-time staff member during the twice-yearly industry trade show. He said in the long run it makes more sense for these companies to purchase corporate condos than rent blocks of hotel rooms for long lengths of time.
"That's what is fueling a lot of the residential downtown," Lein said.
Some of the 36 million visitors to Las Vegas every year stay in time shares, and the ones who don't are ripe for the pitch.
A time-share unit is owned by multiple people, who each use the unit for a certain length of time during the year.
There are 21 time-share properties in Las Vegas -- including several high rises -- amounting to 4,253 rooms, according to the Las Vegas Convention and Visitors Authority.
The growth, both in sheer volume and in height, of time shares can be attributed to the growth of the industry and of the Las Vegas market, said Bob Woods, professor and chairman of the hotel management department at the William F. Harrah College of Hotel Administration at the University of Nevada, Las Vegas.
"Las Vegas and Orlando have about the same number of visitors per year," he said. "In Orlando, they have about 120 time-share properties, so they (time-share developers) think, 'Why can't we have about 120 here?' "
As the time-share industry begins to again gain popularity among travelers, some developers are looking to Las Vegas and planning to build up.
Fairfield Resorts is building another tower near its two high rises at Harmon Road and Koval Avenue, and Hilton Grand Vacations Co. plans three more towers at its location on the Strip near Sahara.
"Las Vegas for us has been one of the fastest-growing markets of our many resorts, and we have over 70 resorts across the country," Adam Schwartz, Fairfield spokesman, said. "Las Vegas has quickly blossomed into one of the largest-volume sites and fastest-growing locations.
"We are very bullish on Las Vegas and have moved up construction on our third tower by six months."
Other time-share owners are planning expansions, many of them midrise, and cited the cost of land and increased demand as reasons for the boom.
Woods expects the time-share growth in Las Vegas to continue at its present rate and said the buildings will continue to get taller.
"Land is getting a bit more scarce, and time shares are concentrated near the Strip" and the area south of the beltway, he said. "You build taller things to buy less land."
While residential and tourist-driven projects are going up, most office buildings are staying grounded, local experts said.
But having a tall upscale building often adds cache to an office complex.
Crescent Real Estate Equities plans to build up to a 14-story-tall, 275,000-square-foot building at the Hughes Center at Paradise and Flamingo roads. The office park is already home to the 17-story Wells Fargo tower. Yet another planned office building there would be about 10 stories tall.
Crescent officials stressed that the plans have not yet been approved.
Observers say the boom in residential high rises is not likely to spread to the office sector because of economic differences.
Developers can recover their costs immediately by selling units in residential high rises. But with office projects, they face greater risks and must wait longer to recover their costs because the space is leased rather than sold.
Also, with plenty of land available in desirable office locations, there's little reason for Las Vegas developers to make the extra investment required for the more expensive high-rise structures.