|By Matthew Haggman, The Miami Herald
Knight Ridder/Tribune Business News
Jun. 6, 2006 - Miami developer Jorge Perez and actor George Clooney have pulled the plug on their proposed 11-tower hotel, condominium and casino complex in Las Vegas, ending months of speculation about its fate.
The Perez-led group sold the 25-acre parcel for $202 million -- more than doubling their money in a little over a year.
In March 2005, the group bought the site for roughly $90 million to build the Las Ramblas project, Perez said.
Edge Group, a Nevada-based developer building the W Las Vegas hotel on an adjacent parcel, bought the land in a deal that closed last week. The company said it's considering a hotel on the site.
"There is always disappointment when you don't build a project you announce," Perez said. "But is it better that we made a lot of money by selling the land rather than building and losing a lot of money? Of course it is better."
Clooney, nightclub operator Rande Gerber and developer James Stuart of Las Vegas-based Centra Properties were partners with Perez in the enormous $3 billion project that was to include 4,100 residential units, a 300-room hotel and a casino.
In a one-sentence statement Clooney said that since "our controlling partners wanted to sell the space, I'll donate my profits from the sale to the African Debt Relief Project -- and I guess I'll find someplace else to gamble."
Perez said construction costs doomed the project, coming in at more than twice estimates. Demand for condos has also softened there, he said -- though he insisted he's still a believer in the Las Vegas condo market. And Perez said the project needed a greater focus on the casino and hotel component for it to work.
"We are residential and mixed-use developers, we don't know about casinos," said Perez, chairman and CEO of The Related Group in Miami. "I felt very ill at ease with the gaming component."
The sale, while lucrative for Perez and his partners, marks another failed attempt by the Miami-based developer to build in Las Vegas. Perez, whose privately owned company was recently ranked by a builder trade publication as the biggest condo developer in the country, ventured out to Las Vegas in recent years aiming to replicate his South Florida success.
But earlier this year, again citing exorbitant construction costs, Perez pulled the plug on a two-tower project called ICON Las Vegas near the Las Vegas Strip.
The cancellation of Las Ramblas came after a heavy marketing campaign where Perez appeared with Clooney, Gerber and Stuart in full-page advertisements in newspapers across the country pictured as the second coming of the Rat Pack.
Nevertheless, Perez, who has projects in Florida, Atlanta and Latin America, said he would consider trying again in Las Vegas.
"We now understand some of the construction constraints there, we understand the importance of a brand name to a project in Las Vegas -- like MGM or Hard Rock," Perez said.
Copyright (c) 2006, The Miami Herald
Distributed by Knight Ridder/Tribune Business News. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.