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Developers Seeking City Approvals for a 61-story, 2,500-room hotel
 in Downtown, Las Vegas; Financing for the Project Unknown

By Benjamin Spillman, Las Vegas Review-JournalMcClatchy-Tribune Regional News

Apr. 24, 2008 - Developers want city approval for a hotel in downtown Las Vegas that would be as big as anything Steve Wynn or Sheldon Adelson owns on the Strip, but they haven't yet said who would pay for the resort.

The Las Vegas Planning Commission today will consider a request for a 61-story, 2,500-room hotel on the northeast corner of Charleston Boulevard and Grand Central Parkway.

The proposal, referred to in one listing as the Grand Central Hotel, includes nearly as much building space as the 2 million-square-foot Las Vegas Convention Center. It would draw customers from the World Market Center and other projects taking shape in the master-planned Union Park development to the north.

"It is interesting because it has been somewhat stealth," said Scott Adams, director of the city's Office of Business Development. "It looks like a really good project."

Adams said he was impressed by the people pitching the project and that the city planning staff is recommending approval of all four agenda items related to the proposal.

The development group includes the Merrill Group of Cos., a development and management firm with projects in Elko, Pahrump, Mesquite and Vernal, Utah. It also includes Craig Katchen, who in 2006 was part of another project across from the Grand Central site.

That project never materialized and drew criticism from Mayor Oscar Goodman, who questioned the participation of a former state official.

Adams said the Grand Central group, referred to as Grand Central South Partners in city documents, seems credible and ready to proceed.

"It really appears to have some strong backing behind it," he said.

Katchen, whose signature appeared on documents in support of the proposal, had little to say about the plan.

"It is real early, we are just going through our entitlement," he said. "Until we get our entitlements, there is not a lot to say."

If approved, the developers would have permission for 11,100 square feet of retail and a 260,000-square-foot convention center in addition to the 61-story, 2,500-room hotel. By comparison, the $1.9 billion Palazzo resort on the Strip is 50 stories with about 3,000 rooms. The $2.7 billion Wynn Las Vegas is 50 stories with about 2,700 rooms.

Once the developers get the local government's approval -- or entitlements -- for a project site covering things such as land use and building heights, they can use entitlements as a springboard to obtain financing for their project.

But it takes more than a city's endorsement to bring a project to fruition, especially lately.

The national economy is in recession, Las Vegas visitation is in a slump, credit markets are tight and one Strip project under construction has already faced foreclosure.

The site is also the location of the failed Sandhurst project, a proposed high-rise condo building that evaporated in early 2006.

Michael Mirolla, a former Sandhurst executive, said he thinks the site has potential despite the failed condo plan.

"It is a very different product. It is a very different time," said Mirolla, who isn't involved in the Grand Central Hotel proposal. "I think that area is a very strong area."

Adams said a hotel on the site is more likely to succeed than condos, a commodity that lost value in the recent real estate market meltdown.

"That seems to be the use that continues to sustain itself in this market," he said.


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