Living in the Dream
Once a weekend haunt of stags and conventioneers, Las Vegas has morphed into a second-home and retirement capital for baby boomers
From the Print Edition:
Vegas, Mar/Apr 2006
The Las Ramblas development currently exists as a claustrophobic sales office up an outdoor stairway on a nondescript stretch of Las Vegas's Convention Center Drive. Its black-and-white advertising campaign-featuring modern-day Rat Packers (including actor George Clooney, an investor in the project) with ties undone and drinks in hand-seems designed to evoke a simpler Las Vegas during a simpler time.
But the concept of Clooney's Las Ramblas is even more ambitious than Ocean's Eleven. Visualize an 11-building city-within-a-city just off the Strip, with more than 4,000 apartment units spread across 25 acres. A pedestrian thoroughfare includes a casino, fitness centers, a hotel, and a dozen restaurants and nightclubs, all of it designed by the hip south Florida firm Arquitectonica. To make it happen, construction costs will total as much as $43 billion.
Las Ramblas is just one of an estimated 80 to 110 Las Vegas condominium or condo/hotel projects in some state of development. Most have been announced, with great fanfare and often a celebrity presence, within the past year. Throughout the city in makeshift offices, sales executives armed with a dream and a floor plan are busy pitching potential buyers.
A few of the buildings are filled with residents already. Another three or four are punctuating the Las Vegas skyline with skeleton towers and towering cranes. If current skepticism holds, many of the rest may never be anything more than a scale model and a gleam in a developer's eye. "It's the perception of the marketplace that there is going to be a substantial difference between the number of projects that have been proposed, and the number of projects that ultimately get done," says Ian Bruce Eichner, the chief executive officer of 3700 Associates LLC, the developer of a proposed mixed-use tower complex on the Strip called the Cosmopolitan Resort & Casino.
Recent news supports Eichner's opinion. The Related Companies, the creators of New York's TimeWarner Center, and perhaps the largest condominium developer in Florida-as well as Clooney's big-money partners on Las Ramblas-recently pulled the plug on their twin Icon towers, though deposits already had been placed on most units. Even Las Ramblas itself appeared to be shutting down its hard-driving media campaign late last year amid rising construction cost estimates, though Related executives affirmed their intention to soldier on. "Construction of phase one of the project is nine months out," insisted Marty Burger, the president of Related Las Vegas, in late December.
By dint of its scope and aggressive marketing, Las Ramblas has come to symbolize the audacity of the new developments. Its difficulties are being seen in many quarters, including the local newspapers, as evidence that the condo phenomenon in Las Vegas has been overhyped. And yet, merely the projects that are completed, under construction or about to break ground will alter the dynamic of a destination that runs on transient spending. In that sense, whether the short-term tally is 10 buildings or as many as 30, Las Vegas will have succeeded in reinventing itself yet again.
What was once a weekend haunt of stags, frat boys and conventioneers has morphed in recent years into a full-service adult vacation destination. Now it's being pitched as the second-home and retirement capital of the baby boomers-and a surprising number of empty nesters and successful businessmen with multiple residences have responded by snatching up high-rise units. "There's so much energy and so much money in this town, and so many marketing geniuses, it just doesn't stop," says George Maloof, whose family owns the Palms casino. In January, Maloof broke ground on a Palms-branded condo tower of his own, called Palms Place.
Adds Burger, "This place evolves faster than any other place. It changes every month. There's just so much money here. A $200 million project used to be big. Now a $1 billion project is nothing."
As you might expect from Las Vegas, none of these proposed developments are garden-variety complexes. Many have fanciful names, such as Allure, Panorama, Sky, Streamline, Nouveau, Sandhurst and Vegas 888. Most contain entertainment components, spas, trendy boutiques, even full-scale casinos. Donald Trump is participating, with yet another Trump Tower. (Other ventures, however, have sputtered. Ivana Trump had a sales office and brochures for her own branded building, until that project lost steam. Michael Jordan's proposed building, AquaBlue, has also come and gone.)
Still, the construction boom shows no signs of abating. Existing Las Vegas brands such as the Palms are in on the frenzy, branding or building condo hotels in which turnkey units are purchased by individual investors, then added to a nightly rental pool when not in use. The Venetian has a residential tower going up. The MGM Grand has three. The Hard Rock is talking about one. Starwood is involved in a W condo/hotel project. Hyatt is putting a 1,000-room hotel, one of the largest in its chain, beside 2,000 residential units inside the Cosmopolitan. Even the collapse of various projects such as Icon, high-profile failures that might halt momentum in a less resilient market, hasn't seemed to slow the momentum of the developments perceived as successful.
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