Las Vegas Sun

October 18, 2018

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LV condos toppling before they start

You could call it the beginning of the end for Las Vegas high-rise pretenders.

Liberty Tower and Ivana Las Vegas will not be built, county and other land records indicate. And while these towers aren't the first condominium plans to bite the dust, experts say other failures will surely follow.

"It's the combination of rising construction costs, rising land prices and the fact that the mid- and high-rise condo market (in Las Vegas) is still in its infancy," said John Restrepo, principal of Restrepo Consulting Group.

He said the fever to build a condo tower in Las Vegas was equivalent to a gold rush. But getting a condo project off the ground is tougher than drawing up a rendering and having a slick marketing campaign.

"There's a certain segment that are more promoters than developers, more snake-oil salesmen," Restrepo said.

That said, many condo projects are striking gold. Experts said the towers destined to succeed are those being built by companies with solid track records, backed by investors who made shrewd evaluations of the Las Vegas market before plunging ahead.

"The true ones are the ones who have built in other cities; Bosa (Development), Turnberry (Associates), Related (Cos.)," Restrepo said. "There are other guys who have a Web site and a dream.

"If you ask if they've ever built a high rise, they look at their shoes."

The latest towers to fall out of the running, Liberty Tower and Ivana Las Vegas, were pitched by Australians Victor Altomare and Joseph Di Mauro, who some said talked a good talk, but couldn't back it up.

The land for Liberty Tower, a 21-story condo tower first announced in June 2004, was sold last week by Altomare to Nevada Limited Liability Company Stratorise South for $5.5 million, Clark County records show. Altomare purchased the 0.68-acre parcel at 1801 Las Vegas Blvd. South, across from the Stratosphere, for $900,000 in 2004, according to county records.

The land for Ivana Las Vegas also is up for sale for $49 million. That 2.17-acre parcel is at the site of the former Holy Cow! casino, at the northeast corner of Sahara Avenue and Las Vegas Boulevard.

Chris Sullivan, real estate attorney and broker who listed the Ivana property for Altomare, said he is able to sell the property because of a pre-existing agreement with the land owner, Rinkai America.

There have been at least 70 condo towers announced for development in the Las Vegas Valley in the past 18 months. The sheer volume of towers, along with the lack of development experience by many of those pitching projects, left some to speculate that most would never happen. Many in the industry believe as few as a third of the projects announced will ever get built. Regardless of sales pitch technique or background, completing a condo project is getting tougher for everyone, Restrepo said.

Nick Till, an associate in CB Richard Ellis' land services group, said financial groups also have become more cautious when it comes to lending developers money to build a high-rise condo tower.

"The financing and lending of these projects is not as aggressive as it used to be," he said. "All the lenders are taking a step back and waiting to see what the market does, what the interest rates do before they start dishing out more money."

Liberty Tower and Ivana Las Vegas are not the first projects to publicly fall apart.

Krystle Sands was the first to bite the dust in April, when the Florida developer sold out to Turnberry Associates, which owns adjacent land and the nearby Turnberry Towers.

Aqua Blue, by Chicago company Diversified Real Estate Concepts Inc., was scuttled in July, citing stiffening competition from a slew of condominium projects near the Strip.

As the condo market continues to shake itself out, Restrepo said, more projects will be scuttled or land sold off.

"You could make the argument, that after all the risks he (Altomare) could get a return of 500 percent of his money," Restrepo said. "I would do the same thing; unless you really are a developer, you develop because that's your core business."

Altomare's Las Vegas projects have garnered skepticism since they were first announced in 2004.

Ivana, originally called the Summit, was proposed to be one of the world's tallest residential towers when built to a height of 900 feet tall and would feature a $35 million penthouse dubbed the "cockpit." The project gained worldwide recognition this spring when Ivana Trump signed on to have her name attached to the project.

Liberty Tower was lower key, and while units were marketed and sold, it never got any further than site preparation.

Altomare did his best to pitch both projects to investors, buyers and real estate agents.

The sales office presentation for the Ivana was full of flashing lights, smoke machines and loud music more evocative of a nightclub.

At an April real estate event promoting condos, Altomare told the crowd that he and his partners have a "responsibility to make this project happen."

Sun sister publication In Business Las Vegas reported in November that neither project had a contractor. Whether or not the projects had financing was also a mystery, since Altomare at the time said he was not willing to discuss the issue.

Altomare could not be reached for comment Thursday. Sullivan, his lawyer handling the land sale, said Altomare is in Australia. Calls to the Ivana sales office were not answered.

A Los Angeles resident, who bought a unit in Liberty Tower, said he became skeptical when sales agents would not return his calls and when the title company, Lawyers Title of Nevada, said he could pull out of the project. The buyer, who asked that his name not be used, was told in a letter that the contract he signed was never signed by Altomare and never put on file with the title company.

The Los Angeles buyer said he pulled out his $10,000 deposit with interest from the escrow account.

"It was all very seductive; I was sucked into it," he said, adding that he was never told the property was for sale or had been sold.

Calls to Lawyers Title were not returned.

David Ezra, broker/owner of Ezra International Realty, said that based on what the Los Angeles buyer was told, Altomare sold units at Liberty Tower but never executed the contract.

"He (Altomare) left himself a backdoor," Ezra said.

Ezra, who specializes in high-rise properties and other luxury residences, said he and his agents steered clear of the Ivana and have pulled out all of their clients' money from Liberty Tower.

"They didn't execute on their promises," Ezra said. "They haven't built anything in the U.S. They've made a lot of big claims, and that itself makes me a little leery."

The lack of faith experts have in the likelihood of many projects becoming a reality doesn't mean that none will. Some are almost completed, and others are well under way.

Among them include:

Jennifer Shubinski can be reached at 259-8832 or at [email protected]