|By Arnold M. Knightly, Las Vegas
Review-JournalMcClatchy-Tribune Regional News
May 12, 2007 - --The W Las Vegas mixed-use project slated for almost 50 acres along Harmon Avenue was canceled Friday after minority partner Starwood Hotels and Resorts Worldwide pulled out of the project.
In a brief e-mailed statement, the Edge Group said its partnership with Starwood is scheduled to end and the project "could not overcome numerous significant challenges."
W Las Vegas was first proposed in 2005 for 22 acres on the northeast corner of Harmon Avenue and Koval Lane. It was billed as a $2.5 billion mixed-use project with 3,000 hotel-condominium units, 10 restaurants and nightclubs, a 75,000-square-foot casino, 300,000 square feet of convention and meeting space, a Fred Segal fashion emporium and a spa. It was to open in 2008.
The Edge Group had bought the land from home builder D.R. Horton for $108 million. The W Las Vegas was to neighbor the 4,000-unit hotel-condominium project, Las Ramblas, tied to actor George Clooney and nightclub magnate Rande Gerber. But poor unit sales forced Las Ramblas' cancellation and it sold 25 acres and entitlements to the Edge Group for $202 million in June 2006.
A Starwood pullout had been rumored since late last year, but Edge officials maintained in the past few months that the project was proceeding and cited a $10 million investment by Starwood last year as proof.
Project Co-Chairman and Chief Executive Officer Reagan Silber said in December that the company had hired financial consulting firm Credit Suisse to seek a joint-venture partner to join Edge Resorts and Starwood on the project. He added that rising construction costs and the extra land required a third party.
Edge spokeswoman Maggie Feldman said company officials could not comment further now but added that the group is selling assets including the land.
John Knott, executive vice president of the Global Gaming Group for CB Richard Ellis, said the land might fetch $12 million an acre if sold whole, or $17 million to $20 million an acre if broken up. He added that the property will interest mixed-use, urban developers and gaming companies.
"It's just an absolutely prime piece of real estate," he said.
The e-mail statement from Edge also said all condominium reservation deposits have been returned to the buyers. The company had held reservation agreements, but no hard contracts, for 750 units.
Jeremy Aguero, a principal at Applied Analysis, a Las Vegas financial consulting firm, said it shouldn't be hard to find a buyer for the land. He added that the parcel's size represents a significant development opportunity.
"Nowadays you see there is a desire for those larger areas because we are really taking a master-plan approach to resort development," Aguero said. "There are not very many 50- acre sites and this represents one of the last major development opportunities available."
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