Building Nevada - October 2006

If time travelers familiar with Nevada’s rival resort cities in the 1950s or 1960s could visit Reno and Las Vegas now, the shock might be overwhelming. Fifty years ago, both cities had populations numbering about 50,000 people and were heading in different directions. The Reno area grew to 300,000 people and evolved into a community with industry that takes advantage of its low costs to manufacture and distribute products in the West.

The evolution of Las Vegas continues. Resort projects are becoming bigger and more ambitious. New lifestyle shopping centers are being developed and high-rise condominiums are giving the city a look rivaling Manhattan. Two gaming conglomerates, MGM Mirage and Boyd Gaming, are launching projects with new concepts for the Strip.

MGM is developing the $7 billion Project CityCenter on 66 acres between the Bellagio and the Monte Carlo, on the site of the old Boardwalk Hotel and Casino, which has been imploded. Scheduled for completion in late 2009, the project will include high-rise buildings with a contemporary urban design. Planned are 2,800 luxury condominium units, a 4,000-room hotel and casino, two 400-room non-gaming boutique hotels and more than 470,000 square feet of retail, dining and entertainment facilities. The convention center will contain half a million square feet of space.

The MGM project will be the largest privately-financed development in the United States, said MGM Senior Vice President Alan Feldman. It will be connected to the Bellagio and Monte Carlo resorts by a people-mover system.

MGM executives began exploring options for the prime Strip acreage six years ago and decided a new concept was needed. "We couldn’t justify building another hotel-casino out of the same mold," Feldman said. "That decision took us down a completely different road. We decided to create an incredible and dynamic gathering point for Las Vegas. We find ourselves in a unique moment in history in which we are primed to move from the most dynamic tourist destination in the world to becoming one of the most important centers of commerce and leisure in the United States."

Feldman compared Las Vegas to Chicago of 100 years ago, when it was transformed after the great fire into a dynamic industrial and commercial center. Las Vegas benefits from being a crossroads for people and also "one of the most sophisticated Internet information hubs of any place in the world," Feldman said.

The first phase of the CityCenter project will include a 4,000-room hotel and will be designed by Cesar Pelli, one of the world’s top architects. The center’s main resort, CityCenter Hotel and Casino, will have two towers (48 stories and 43 stories) and will include a convention center, 2,000-seat theater and two parking garages. A new Elvis/Cirque de Soleil show is scheduled to debut at the hotel when it opens in November 2009.Subsequent phases of the project will include two 400-unit condo towers, one condo-hotel tower with 300 units and another one with 1,500 units. Mandarin Oriental Hotel Group will manage a 37-story, 400-room luxury hotel in the center, which will open in the third phase, along with a shopping center featuring high-end retailers and another 400-room hotel.

Feldman said the project will have its own power plant and will be environmentally sensitive, with rooftop gardens and other features.

The Boyd Group is replacing the Stardust Resort & Casino, which first opened its doors in 1958, with the $4 billion Echelon Place. The 63-acre site will include a 140,000-square-foot casino, four hotels with a total of 5,300 rooms, 25 restaurants and bars, the 650,000-square-foot Las Vegas Expo Center and 1 million square feet of convention space. The Stardust will be open through the end of this year, and then will be demolished to make way for the new complex, which is scheduled to open in 2010.

Boyd plans to operate the 3,300-room Echelon Resort at its new property, which includes a tower with 2,600 rooms and one with 700 suites. Echelon will have a theater with stadium seating for 4,000 and another theater with 1,500 seats.

The company has reached an agreement with Shangri-La Hotels and Resorts, a leading operator of luxury hotels in Asia, to manage a 400-room hotel that will include a 20,000-square-foot spa.

Morgans Hotel Group and Boyd have entered into a joint venture to develop two projects within the Echelon Resort – the Delano and Mondrian – that are described as "lifestyle-boutique" hotels. The Delano will have 600 rooms and a nightclub and will be similar to a sister property in South Miami Beach, Fla. The Mondrian, with 1,000 rooms, will be patterned after the Hollywood hotel of the same name with facilities for business travelers and tourists, Boyd officials said. The master plan calls for a retail promenade with 350,000 square feet of space and covered parking for 8,000 cars.

Bob Boughner, a 30-year Boyd veteran, will leave his position as CEO at the Borgata Resort in Atlantic City to head the development team at Echelon Place. "There are two dynamics shaping the Las Vegas market – the upscaling of the product and the need for quality meeting room and convention space," said Rob Stillwell, vice president of corporate communications for the project.

Reno has a more modest resort industry, but its skyline is also changing. The Reno Hilton is being converted into the Grand Sierra Resort and Convention Center. The resort sits on 148 acres north of the Reno-Tahoe International Airport, about 10 minutes from downtown. The land was originally the site of the MGM Grand Hotel, one of a new generation of resorts that expanded in Reno during the late 1970s. Grand Sierra Resort Corp. purchased the property last year with plans to build two high-tech, indoor water parks as the centerpiece of the new resort.

The $1.8 billion conversion also includes plans for a 5-acre outdoor amphitheater and park, 10 new restaurants and bars and a four-story cabana-style golf driving range. The first phase will convert the top 11 stories of the existing 27-story building into 824 condo units.

The second phase will feature another tower with 1,200 condo units, and the third phase will include seven more residential towers along the Truckee River containing a total of 2,000 condo units.

From the previous owner, the Grand Sierra inherited 300,000 square feet of casino and convention space, nine restaurants, a shopping promenade, thrill rides, go-cart and jogging tracks, dinner theater and golf facilities.

The Navegante Group, which runs the Casino Fandango in Carson City, will operate the Grand Sierra Casino. Larry Woof, chief executive officer of Navegante and former CEO of the MGM Grand Hotel in Las Vegas, will be in charge of casino operations.

Plans call for the additions to the property to be completed in six years, said Tom Schrade, president of the investment group. Schrade said Reno has become an outstanding destination for people who want outdoor adventure, such as skiing, camping, hunting, fishing and other activities. The water park will give visitors another alternative with no "weather risk." He said the developers got the idea from the network of Dells Resorts water parks in Wisconsin. "I like to think of Reno as the healthy alternative to Las Vegas," he said. "It has a great climate with outdoor activities and is a wonderful place to be."

Grand Sierra and other casino developers say Reno is going to become a strong market for high-rise condos for tourists, young professionals, empty nesters and executives attracted by new industry. Small Reno properties such as the Comstock Hotel and the Sundown Casino have already been converted into condo projects. The Sundown is now Belevedere Towers and the Comstock has changed into the Residences at River Walk, with views of the Truckee River.

One of the most ambitious projects currently planned for Reno is the Palladio Luxury Condominiums, a 12-story tower being built by BCN Development at First and Sierra streets in downtown Reno. The 92 units in the complex, which features a fifth-floor pool, are scheduled to be completed sometime in 2007.

The Las Vegas market has suffered a downturn in single-family home sales, but its high-rise condo market is still hot, casino executives say. In addition to its Project CityCenter condos, MGM plans to build 1,344 units in a 520-foot tower called The Place at Mandalay at the corner of the Strip at Mandalay Bay Road. The company also expects to increase the number of condos behind the MGM Grand from the 1,700 already built or under construction to more than 2,800 units. No condos are planned at Echelon Place, but Boyd has set aside 33 acres for possible condo development.

In addition to huge new malls and continued expansion of upscale shopping at Las Vegas resorts, the city is seeing development of regional lifestyle centers with a variety of entertainment and retail shops.

The $750 million Town Square regional lifestyle center under development on Las Vegas Boulevard south of Mandalay Bay is one of the largest projects. The 117-acre center is under construction at the intersection of Interstate 15 and the I-215 Beltway, next to Fry’s Electronics.

The developers of the project, Turnberry Associates and Centra Properties, purchased Fry’s last year and made it an anchor tenant. Turnberry is a national company that has developed more than $7 billion in commercial and residential property; Centra is a Las Vegas company that has developed $3 billion in projects to date.

Town Square, which will have more than 150 retail shops and 12 restaurants, is scheduled to open in the fall of 2007. The center will be designed to give the feel of an old-fashioned American main street. "We will have a collage of architectures from the past 200 years," said Centra founding partner, Jim Stuart. "We want to create an emotional experience for people who visit," Stuart said. "I would be very disappointed if we built just another shopping center."

A 20-screen RAVE Motion Pictures complex will be included, along with a children’s play area with attractions inspired by entertainment companies such as Disney and Universal Studios. The center will have venues for concerts, art festivals and other special events.

The wide variety of retailers include Robb & Stucky, Abercrombie & Fitch, Victoria’s Secret, Eddie Bauer, White House/Black Market and Borders. The project will have a 24-Hour Fitness Center and several restaurants new to Las Vegas, such as Tommy Bahama’s, Tropical Café, Yardhouse and Texas de Brazil.

In addition to retail and dining, Town Square will also feature 400,000 feet of office space. A small boutique hotel was originally planned, but was scrapped in favor of more office space because of a surprisingly heavy demand from both large companies and smaller tenants, Stuart said.

The developers anticipate that the volume of traffic at the project site will increase 10-fold and they are building a $3 million flyover ramp that will take motorists traveling north on Las Vegas Boulevard directly into the center. There will also be an entrance from Las Vegas Boulevard with access to the center from both directions.

World Market Center, the first permanent trade show facility in Las Vegas, could be the forerunner of another non-gaming trend. The first phase of the facility, which hosts two major furniture shows a year, was completed in the summer of 2005. General Manager Dave Palmer said most locals probably will have no idea of the magnitude of the project until it is finished in the next few years.

The furniture showcase, which sits on a 57-acre parcel southeast of the I-15-U.S. Highway 95 interchange just west of downtown, has one 10-story, l.3-million-square-foot tower already open and another tower almost completed. Long-range plans call for eight buildings, connected by sky bridges, with a total of 12 million square feet. To put this in perspective, the Las Vegas metro area currently has 9.5 million square feet of convention space. The second tower, a 16-story building with 1.6 million square feet of exhibit space (300 showrooms) will open in January.

Palmer said the timetable for the project will depend on market conditions. Estimates of when the project will be completed vary from 2012 to 2015. The $3 billion project is being developed by World Market LLC and The Related Companies. Market founders and Los Angeles businessmen Jack Kashani and Shawn Sampson have worked for six years to create a complex that will surpass the industry’s historic showplaces in San Francisco and High Point, N.C. The market recently hosted its third show, with 42,000 attendees coming from all over the United States and 100 other countries.

The developers say that the project will have a major impact on downtown revitalization and will pump $200 million in non-gaming revenue into the economy and create 35,000 jobs, both directly and indirectly. "This (the World Market) is totally different than anything else in Las Vegas." Palmer said. "This is not gaming- or entertainment-related. Other cities like Atlanta and Chicago have merchandise marts, but this is the first merchandise mart for Las Vegas."

The new complex is next to a 61-acre parcel that the city of Las Vegas wants to make a showcase for the community’s redevelopment. Palmer said his project should have a synergy with whatever Las Vegas develops on its acreage. Plans are being considered for retail, commercial and cultural facilities.

The World Market stimulates strong economic activity in the weeks leading up to each show as people are hired locally to deal with 600 trailer-loads of merchandise and handle registration, security, food service and many other activities vital to the show, Palmer said, adding, "This will change the face of downtown Las Vegas."