Wednesday, Dec. 26, 2007 | 6:45 a.m.
After little more to show for two years of construction than a giant hole in the ground, the Strip's least-publicized resort now rises like a giant Erector Set that's more Manhattan than anything yet built in Las Vegas.
Though the Cosmopolitan's avant-garde look is unique among the new wave of ultramodern luxury resorts now under way on the Strip, it's a single number on paper that has designers buzzing.
That number, 18.25, is the resort's "floor area ratio" - a measure of a property's square footage divided by the size of the parcel it sits on.
It's a term common to architects and zoning experts in other major cities but isn't yet a factor in Las Vegas, where developers have had the space to build sprawling themed resorts that lure passers-by with grandiose entryways and sidewalk attractions. In cities where land is cost-prohibitive or unavailable, skyscrapers are designed to maximize moneymaking space.
Because of rising land and development costs, resorts may find themselves building up - way up - out of financial necessity rather than for aesthetic reasons.
For now, the Cosmopolitan, which won't be the most expensive or the most luxurious Strip resort in this new wave, can claim the distinction of being the most densely built property in town.
The project is sandwiched between the Bellagio and the CityCenter project at Harmon Avenue and Las Vegas Boulevard.
The Cosmopolitan's 7 million square feet, comparable to the size of other major casinos in town, sits on only 8.7 acres. That's less than half the size of many Strip resort parcels and closer to one-third of the typical site.
That makes the Cosmopolitan comparable to New York buildings but far surpasses anything in Las Vegas, even CityCenter's five high rises, which will be spread over 66 acres.
Shoehorning high rises onto small parcels is old hat to Cosmopolitan's developer, New Yorker Ian Bruce Eichner. A newcomer to Las Vegas, Eichner recently completed the Continuum, a condominium high rise at the southern tip of Miami's South Beach, featuring wraparound balconies, a four-story spa and a rooftop lap pool.
Building on such a compact site was a new task for contractor Perini Corp., which dug an 85-foot hole to accommodate a five-level underground parking garage. Engineers used tubes to pour concrete more than 100 feet into the earth, creating slurry walls that protected the hole from caving in on the parking structure during construction. They also installed a system to pump out naturally occurring water that accumulates below the water table. The structure cleared the hole in the ground a few weeks ago - silencing some skeptics who doubted Eichner's bold plan.
"For a long time people didn't know what was going on because they couldn't see it," Cosmopolitan Chief Operating Officer Audrey Oswell said.
Local zoning laws typically regulate building density. Unlike areas with stricter design requirements, Clark County has sidewalk setbacks, parking requirements and height restrictions because of the Strip's proximity to McCarran airport, but offers developers plenty of flexibility to construct more compact structures, which will become more commonplace in the future, designers say.
The Cosmopolitan is unique to the Strip for its 5-acre podium - a rooftop area atop five levels of retail space that take up nearly every square inch of available land, said John Koga, a vice president with Friedmutter Group, a Las Vegas design firm involved in the project. Ringing the property's two high-rise towers, the podium will feature outdoor and glass-enclosed indoor attractions such as nightclubs, restaurants and bars that take advantage of the Strip view. Similar to the jogging paths, rooftop gardens and other offerings topping luxury condo buildings in Manhattan, the podium will offer multiple pools with multilevel decks, cabanas and a boardwalk path. A not-yet described "adult-only playground" will help set the Cosmopolitan apart from its non-Vegas peers, developers say.
Resort executives say the property's avant-garde design and center-Strip location have helped propel sales of its condominium units amid a slowing housing market that has hurt high-rise condo sales as well as sales of single-family homes. Some of the more popular condos are 1,245-square-foot corner suites with wraparound balconies that, at 450 square feet, are the size of many older hotel rooms in Las Vegas.
The property will feature 700 hotel rooms and 2,200 condo units that owners will have the option of renting to the public. About 270 condo-hotel units are available for purchase.
"Foot traffic has died down, but we're still getting a high number" of purchases by those who visit the resort's nearby sales center, Oswell said.
Many buyers are seasoned condo owners from California, New York and Florida with multiple homes who may stay in their unit for only a few days out of every year, while others are interested in monthly visits. Some are locals seeking to rent out the units for most of the year but want to have Strip-front real estate for occasional entertaining, Oswell said.
Executives expect more interest from buyers now that the podium is under way and work will begin on each of the towers, which are at least 50 floors high, early next year. The resort is expected to be topped off this summer and will open by December 2009.
Though building density can't easily be advertised in slick brochures with photos of sexy interiors and leggy models, it's still a major convenience factor that appeals to buyers, Oswell said.
"To not have to hike to get to a restaurant ... and to have 7 million square feet of attractions in a space that feels more like a boutique hotel is a selling point," she said.
The winner of the latest installment of the reality TV show "The Apprentice," Stefanie Schaeffer, is facing a challenge that surpasses anything made for television.
Schaeffer, a former attorney, was recently installed as marketing director overseeing sales for Donald Trump's Vegas condo and hotel, set to soon open its first 64-story, 1,282-unit luxury tower - completewith a marble-filled lobby, plasma screens inside the bathroom mirrors, valets with white gloves and a golden glass exterior. But real estate agents and analysts here say the timing couldn't be worse.
High-rise luxury condo prices are way down in Las Vegas, reflecting local and national housing trends. The boom times of the past few years, when developers flamboyantly announced one high-rise project after another and talked of Las Vegas as the next Manhattan, ended with a thud this year. Local observers say that as Trump pushes to close on units, a reckoning may come for the still fairly new concept of luxury Vegas high-rises.
The answer will hinge on whether the people who put down $10,000 deposits during the boom years will now be able to come up with financing for the units, priced from $700,000 to $7 million. Tower I still has a few units available, and Trump is taking orders for the identical second tower, which hasn't broken ground. The company has received deposits for about one-third of the Tower II units since the project was announced on "The Apprentice" in May.
The fate of the high-profile Trump project is sure to reflect on the many expensive condo projects set to open around the Strip in the next few years, local agents and analysts say, as well as on a resale market that many fear has hit saturation.
"I'm worried about how many of those things are going to go up for sale, and are they going to linger out there, and are we going to get bad press," said Realtor Don Kuhl, owner of VegasVerticals.com. "Hopefully we don't have a huge number of people in there trying to flip units because we don't have a strong enough market for that at the moment."
Condo buyers aren't allowed to put their units up for sale until they close, and that can't happen until the building's opening, which is set for the spring but could happen as early as February. Kuhl and other local agents who deal in luxury condos report that an informal list of Trump reservers trying to unload units is already floating around - some estimate it reflects 30 percent of the tower. These agents believe many of the sellers won't be able to get the price they committed to paying for the unit and some may have to walk away from their deposits.
"They thought they were going to flip them, and they don't want to be paying mortgage payments," said Realtor Paul Murad, author of "Manhattanizing Las Vegas." "Some of these investors are not going to be able to close." Murad estimates that 20 percent of potential buyers citywide are walking away from luxury condo deposits these days.
Despite those concerns, Schaeffer maintains the air of confidence that made her a hit on TV. She says she's in constant contact with the reservers and that they have all assured her they can't wait to move in.
She echoed her boss's consistent assurances that the Trump brand is untouched by market forces.
"When you're at such a high end of the spectrum, you're much less affected by the market," Schaeffer said.
But even "The Donald" hasn't appeared completely immune to the recent nationwide downturn. In Tampa and Fort Lauderdale, Fla., projects being built by outside developers using Trump's name have been put on hold, while a Trump tower in Chicago has had slow sales, according to recent reports.
In interviews and statements, Trump has trumpeted Vegas as a bright spot, with $1 billion in presales and a project cost of $500 million. But locals say the market here could put his assumptions to the test.
According to a report released Friday by Restrepo Consulting, high- and midrise luxury condo sales through the first three quarters of 2007 were outpacing 2006 in the number of units sold, but median prices have fallen from about $1.03 million to $860,000, a drop of about 17 percent. Median hotel-condo unit prices were down in 2007 from $670,000 to $537,500, a nearly 20 percent drop. Most telling, John Restrepo said, was that over that same period, the overall housing market fell just 5 percent.
Restrepo Consulting also found that units were languishing for months on the resale market.
MGM's condo-hotel, for example, had 124 units - 10 percent of its inventory - on the market an average of 117 days, while the less expensive Turnberry Place had 22 percent of its units up for resale. Panorama Towers, a high-rise luxury condo project just west of the Strip, opened its second tower less than three months ago and is trying to resell about 10 percent of that, according to sales director Tony Preus. Five Panorama units are currently in foreclosure, according to RealtyTrac, each now worth several hundred thousand dollars less than what the owners paid for them.
"The luxury condo market is even weaker than the overall housing market in terms of percent drop in price," Restrepo said. "I think Trump will be affected. They do have the Trump name ... But many of these are second-home buyers and investors, and those are the folks that pull back most quickly in rough economic waters."
Realtors insist that anything purchased now will seem a steal in a few years. CityCenter, the Plaza, the Cosmopolitan and the Fontainebleau will open a flood of high-rise Strip condos within a few years.
According to a recent report by Applied Analysis, 13,000 luxury condos are in planning or under construction in the Las Vegas Valley, including 8,400 under construction on or around the Strip.
"Those future projects couldn't make a profit at today's prices because the construction and land costs are so much higher," Realtor Bruce Hiatt said. "Buyers are starting to realize that the good deals may start to go away."
Developers also report optimism, regardless of fluctuations at Trump or anywhere else.
"It's cyclical," said Preus, of the Panorama. "You can't panic. People who invest are pretty savvy, and they understand that things go up, they go back down, and they go back up again. What they have is a piece of property that is very, very valuable."