Tuesday, April 12, 2005 | 11:08 a.m.
The world's largest privately held time-share company plans to build a 52-story time-share tower at the Aladdin, the company announced.
Orlando, Fla.-based Westgate Resorts will begin construction of the $400 million, 800-unit development later this year with completion of the first suites targeted for New Year's Eve 2007.
Westgate officials say it will be the first time-share development directly tied to a major hotel-casino.
Dean Parker, western regional vice president of Westgate, said the property's "50-yard-line position on the Las Vegas Strip" across the street from the site of MGM Mirage's Project CityCenter would be superior to the company's scuttled time-share development between the Showcase mall and the MGM Grand.
Last year, Westgate dropped a lawsuit against Clark County over a vote by county commissioners that blocked development of the 43-story, 688-unit development after they had tentatively approved it.
"It's a much larger project, one that has great synergies that no other time-share development will have," Parker said.
It will be Westgate's second time-share property in Las Vegas. The company already operates the 208-unit Westgate Flamingo Bay on Flamingo Road west of the Strip.
Westgate will bolster itself in a time-share market that includes hotel giants Hilton Hotels Corp. and Marriott International. Other players in the Las Vegas market include Pacific Monarch Resorts Inc., Consolidated Resorts Inc., and Fairfield Resorts Inc.
The time-share tower is planned on 4 1/2 acres on Harmon Avenue, east of the main entrance of the Aladdin.
The Aladdin, which plans a $120 million transformation to become the Planet Hollywood Resort & Casino, will use unsold time-share residences to supplement the resort's hotel room inventory. The 800 two-, three- and four-bedroom time-share suites will boost room inventory to more than 4,700 at the hotel.
"I am excited that we have been able to partner with Westgate Resorts, one of the largest and most successful vacation ownership companies in the world, on a deal that will dramatically increase guest traffic, room inventory and the overall Planet Hollywood Resort and Casino experience," Robert Earl, founder and chief executive of Planet Hollywood International Inc., said in a statement issued with the announcement.
A group led by Earl acquired the Aladdin out of bankruptcy for $635 million in June 2003. Earl is partnering with financier Bar Harbour Management LLC and hotel operator Starwood Hotels & Resorts Worldwide Inc., to transform the Aladdin into Planet Hollywood, a project scheduled for completion in the second half of 2006.
The firm hired by Earl's partners to turn the Aladdin into the Planet Hollywood -- Las Vegas-based Klai Juba Architects -- has been hired to design the time-share tower. The 52-story blue glass tower has been designed to complement the theme of the Aladdin makeover.
In an interview today, Earl said the time-share project is exciting for Planet Hollywood because the structure will be built in advance of selling it. In most time-share projects, developers build as the units are sold.
"What we're doing is building the foundation for Planet Hollywood to be a worthy competitor on the Strip," Earl said. "By the time we open, the bars, nightclubs, rooms and entertainment will be set, and people can look at the project and determine if we are worthy competitors."
Earl said that Westgate is financing the entire time-share project, but the units will be managed by Starwood.
Parker said the project is being developed in one phase and that the top two floors would include 16 5,000-foot penthouses that would sell for $5 million each.
Traditional time-share ownership is a real estate transaction in which the buyer acquires use of a unit for an increment of time, usually one-week periods. Owners frequently trade their times and locations with other time-share owners through an exchange company.
Westgate, which has a 15,000-square-foot sales office at the Showcase mall, plans a 14,000-square-foot sales gallery on the mezzanine level of the hotel to market and sell the project.
Parker said unit pricing details haven't been completed, but that the company expects to get $25,000 per one-week increment for small units and that the sell-out would generate $1.3 billion when it is completed in eight to 10 years.
He said many of the company's 360,000 time-share members have expressed interest in Strip time-share ownership. The off-Strip Flamingo Bay property, which is expected to generate $165 million in sales, is 80 percent sold after opening in 2000.
Parker said having locations on and off the Strip would be advantageous in the company's efforts to market its Las Vegas resorts because some prefer staying in the midst of the exciting environment, while others prefer a less-trafficked area.
Westgate, the third-largest time-share company in the world, is a subsidiary of Central Florida Investments Inc. and has 24 resorts nationwide, including nine in the Orlando area, two each in the Miami area and Branson, Mo., and properties in Mesa, Ariz.; Tunica, Miss.; Gatlinburg, Tenn.; Park City, Utah; and Williamsburg, Va. The company has 8,000 employees nationwide.
Parker said the deal with Earl has been in the works since his partners bought the Aladdin out of bankruptcy.
Earl and Westgate founder and Chief Executive David Siegel have been neighbors in Orlando for a decade. Earl and Siegel first talked about a timeshare deal when Westgate entered the market in 2000 and those talks heated up when Earl's group took over the Aladdin. Parker said details were hammered out over the past 16 months.