Las Vegas Sun

April 24, 2019

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Many stalled in race to the sky

On paper, downtown Las Vegas is on the verge of a building boom that would fill the skyline from the Spaghetti Bowl to the Stratosphere.

But even as one high rise prepares to open and two more under construction are jutting into the sky, most of the proposals are not expected to make the leap from paper to steel, concrete and glass.

During the last two years, proposals for 33 downtown buildings - all at least 10 stories high - have been pitched to City Hall.

And within the next few weeks, the first of the potential high-rise wave - Sam Cherry's 16-story Soho Lofts - will open.

For city leaders, the prospects of a downtown filled with condominium towers conjures up images of a revitalized urban corridor bustling with night life and businesses thriving, thanks to the new residents' generally higher incomes.

But Mayor Oscar Goodman concedes, and most analysts and developers agree, that most of the proposed high rises probably will never advance beyond the proposal stage.

"I've been told probably about 10 percent will be built," Goodman said. But even if that is all that downtown ends up with, the mayor adds, "it will be more than what we had - none."

There are many reasons that the proposed building boom may turn out to be, at least initially, more of a pop:

Sandhurst owner Michael Mirolla said he was ready to start building last July, but backed off when the construction contract came in 50 percent more expensive than expected.

The apparent demand for high-rise construction also upped contractors' prices. Mirolla said.

"Everyone and their brother had a picture and entitlements," he said.

But when many of the approved high rises did not move toward construction, lessening the demand for labor and materials, construction prices started cooling off.

Mirolla says he now has a less expensive construction price and hopes to buy building permits and start moving dirt within the next six weeks.

Overall construction costs have increased 40 percent to 50 percent during the last two years, developer Irwin Molasky said. That has left many would-be high-rise developers "overestimating the market and underestimating their costs," Molasky said.

The Southwest Regional Council of Carpenters has about 8,500 members locally, an estimated 5,000 of whom will be busy next summer with Strip projects such as MGM's CityCenter, Boyd Gaming's Echelon Place and new towers at the Wynn and Venetian, a union official said.

"Many of these projects were never there to begin with," Mirolla said. "Many were being opportunistic, getting the (approval) and then hoping to flip the property."

The residential high-rise construction craze is not confined to downtown. The downtown projects are among at least 70 condo towers that have been announced in the Las Vegas Valley over the past two years.

But city leaders have taken special interest in downtown's potential boom, which they believe could have a galvanizing effect on the city's core.

The seeds of the downtown high-rise craze were sown six years ago when the City Council loosened restrictions on building heights and setbacks.

Skyrocketing land prices throughout the valley in recent years also prompted those seeking better land deals to look downtown.

The residential high-rise proposals began streaming into City Hall in 2004, when the council approved six plans for downtown residential high rises. The council approved 12 more in 2005 and has given the green light to another six projects to date this year. (The other nine proposals from the past two years have not yet gone before the council for approval.)

But so far, only Sam Cherry's Soho Lofts at Hoover Avenue and Las Vegas Boulevard is close to completion. It is set to open its doors within a month.

Cherry's second project, Newport Lofts, is under construction just a couple blocks away, as is the first of two 41-story high rises that will make up the Allure project a few blocks south on Sahara Avenue.

Beyond those three developments, Streamline Tower at Las Vegas Boulevard and Ogden Avenue, just south of City Hall, is the only other residential high-rise project with a building permit. Its construction has just begun.

Elsewhere, the status of the proposed high-rises is difficult to evaluate.

Just north of where Third and Fourth streets run into Las Vegas Boulevard, property that now is occupied by a row of older businesses won council approval six months ago for a 50-story condo tower. But today, there are no outward signs that change is coming to the tuxedo and bridal dress shop and other businesses there.

Similarly, on the north end of the Premium Outlets mall, several signs tell drivers that the small parking lot there will someday become Grand Central Plaza, a project that includes three high rises. But Grand Central's owner says he plans to hold off on building the 32-story hotel, 16-story office building and 24-story residential tower that the council approved in September.

"I'd love it if every one was built," said City Councilman Lawrence Weekly, whose ward includes a sizable part of downtown. Every project helps improve and bring new life to the area, he said.

"It's all about revitalizing downtown," Weekly said.