Tuesday, Jan. 10, 2006 | 8:05 a.m.
Jeff German's column appears Sunday, Tuesday, Thursday and Friday in the Sun. Reach him at [email protected] or (702) 259-4067.
From the day the Sapphire topless club opened its doors in December 2002, its two main investors have had trouble agreeing on anything.
For most of the time, Los Angeles businessman D. Michael Talla and longtime Las Vegas strip club operator Pete Eliades have been locked in a bitter legal battle over control of the mammoth Sapphire.
But last month Talla and Eliades, each of whom has a 50 percent interest in Sapphire, did agree on one thing -- to put the club, all 70,000 square feet of it, up for public auction.
The agreement could very well spell the end of Sapphire's brief presence on the adult nightclub scene -- and make both men a little richer.
"The way Vegas is growing you're not going to see that topless club there much longer," one Strip real estate insider tells me.
Experts say that whoever buys Sapphire, which sits on 6.1 acres directly behind the Stardust, would likely want to redevelop the property into a high-rise condominium project. That could eventually result in tearing down the club.
The bidding will start at $35 million at a Jan. 23 auction in the courtroom of District Judge Elizabeth Gonzalez.
The auction is the key to moving forward with a confidential out-of-court settlement between Talla and Eliades.
Both sides have been reluctant to talk about the settlement. So has longtime Las Vegas accountant George Swarts, who was appointed by Gonzalez to oversee the auction.
Swarts, however, did say that registration opens on Monday for anyone interested in bidding on the South Industrial Road property.
Bidders will have to put up a refundable $1.5 million deposit to show that they're serious, Swarts explains.
Newspaper ads have been directing potential buyers to a Web site that provides details on the property and the auction.
Eliades, who owns the Olympic Garden topless club, says he might make a bid, and he suspects Talla might, too.
But it won't be the end of the world to both business partners if neither man ends up with Sapphire.
A minimum $35 million bid would more than double the investment Talla and Eliades made in late 2001 to convert the property from a well-known athletic club to a topless joint.
Eliades says the sale price then was $14.5 million.
A lot, however, has transpired in the real estate world since then, including a high-rise condominium craze on the Strip corridor.
And last week, Boyd Gaming Corp. announced that it planned to tear down the Stardust at the end of the year and replace it with an ambitious $4 billion megaresort development.
Boyd, which once tried to buy the Sapphire property, would seem to be a logical bidder at the Jan. 23 auction.
But Boyd spokesman Rob Stillwell tersely says, "We're not interested."
Veteran Strip real estate man David Atwell, however, says he has a client who wants to purchase the property and develop a high-rise condominium project there.
"This is ideally suited for a high-rise project," says Atwell, who declines to identify his client. "It has an unlimited Strip view, and it is very close to the Strip."
Atwell speaks from experience.
He has brokered several high-rise development deals in the past couple of years, including Marriott's Grand Chateau, which now sits on the site of the old Jubilation nightclub on Harmon Avenue near the Strip.
Atwell, who plans to be on hand for the auction, says the Sapphire property is also attractive because of its overall mixed-use potential.
And that's attractive enough for the owners of the property to settle their differences.
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