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
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It's telling that, in only a few years, Turnberry Place has integrated itself into the deepest levels of the Las Vegas community in a way that hotels never could. On the front steps of the Stirling Club one afternoon last December, Las Vegas headliner Clint Holmes waited for his car. Inside, rival boxing impresarios Bob Arum and Don King were holed up in a meeting room, attempting to hammer out the details of a coming bout between fighters they control. Spread across 15 acres, Turnberry Place's vastness extends both out and up. "There's no way you could build something like this now, with real estate prices what they are," says Soffer.
Yet that's exactly what the most ambitious of the developers are trying to do, albeit usually on far less land. The Cosmopolitan is scheduled to be built beside the Bellagio on the stretch of the Strip that is swiftly becoming the Boardwalk and Park Place of Las Vegas. Besides enlisting Bernardo Fort-Brescia of the renowned Miami architectural and design firm Arquetectonica, Eichner has managed to convince Hyatt to brand the development's hotel component. Not only will that give Hyatt its first-ever presence on the Strip, but along with the condos will create 3,000 rooms of instant clientele for the Cosmopolitan's restaurants, shops, entertainment venues and casino.
It's a level of audacity that seems to match Las Ramblas, but Eichner-a New York developer and former district attorney-bristles at the comparison. "There's smoking dope in the middle of the street, and then there's reality," he says. By the time the Cosmopolitan begins construction later this year, Eichner insists he'll have $1.8 billion in the bank from deposits and bank loans. The development is scheduled to open in mid-2008.
Inside his office at the Bellagio, MGM Mirage CEO Terry Lanni pulls out a Life magazine cover that reads "Las Vegas-Is Boom Overextended?" Inside, the magazine asks if Las Vegas has finally "pushed its luck too far." The date of that article? June 20, 1955. "They've been asking that question ever since," Lanni says.
Lanni's competing vision has Las Vegas continuing to boom as an aging generation of affluent Californians tire of the traffic, the loss of services and a seemingly inevitable increase in taxes in their home state. "Many people I know from there have bought homes here," says Lanni, who has recently invested in his own Las Vegas condo in the nearly completed Panorama building. "But they've always been limited to single-family homes a 20-minute drive from the Strip because that's all there was. That's not the case anymore."
Signature at MGM, which is being built by Turnberry for MGM Mirage, appeals to just that demographic. The average price of a unit is $675,000, which buys a 525-square-foot studio. "People don't need big," says director of sales Dan Riordan, who runs the project for MGM. "They need location, amenities, turnkey and rentable." It must be true; Signature has racked up its $1 billion in sales in less than two years. "People want to say, 'I've got a place at the MGM Grand,' or 'I've got a place at the Bellagio,'" Soffer explains. "There's a mystique to that."
There's an ancillary benefit to the hotels beyond adding hundreds of rentable suites. If it all works as it's supposed to, condo/hotels such as Signature at MGM will also create consumer loyalty, which in Las Vegas translates into more of the ridiculously profitable casino traffic.
For three decades, casinos have been doing everything they can to get heavy gamblers to stay loyal to their property, offering comped drinks, meals and even high-end accommodation to keep them in the building. This scheme might be the greatest inducement of all: get them to invest in the company. "I mean, it's genius," says Dan Riordan. "These people are spending $500,000 to over $2.5 million, and now they own a piece of the MGM. So where will they go to eat, drink and gamble? The MGM!"
Beyond the three towers of Signature, MGM Mirage is halfway through a 20-month pre-production period for a $5 billion, 66-acre development called CityCenter, which if built will be the most expensive private construction project in the history of the United States. CityCenter is so big that a veritable all-star team of architects (including Rafael Vinoly, James Cheng, Norman Foster and Cesar Pelli) has been enlisted to design various parts of it. It is so big that both Mandarin Oriental and the Light Group will build high-end hotels without gaming to serve as gateways to the 60-story, Pelli-designed, 4,000-room hotel/casino tower. It is so big that 1,640 condominium units-far more than exist on the Strip today-will be included; so big that the complex isn't scheduled to open until mid-2008. "The problem with these kinds of things is, you can't just decide on Monday that you want it on Friday," Lanni says.
By 2009, though, who knows how Las Vegas will look? Lanni was getting his hair cut at the Bellagio recently when his stylist confided that she, too, has made a down payment on a Strip-side condo. "She said, 'I'll rent it out and keep it as an investment,'" he says. "'I think it can only go up in value.'" If that sounds frighteningly similar to the famous story of Joseph Kennedy getting a stock tip by his shoeshine boy on the eve of the 1929 stock market crash, an incident he correctly interpreted as a harbinger of disaster, Lanni chooses to interpret it as evidence of the universal appeal of the condo phenomenon.
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