"We just recently closed on the property but the price was locked in one-and-a-half years ago, and we all know what's happened to land prices in Vegas, especially for gaming-entitled land," says Frank. "Aztar's property (on the Strip) went for $30-million an acre; I don't think it's a $30-million-per-acre property, but it's certainly worth a lot more than we paid for it."
The Weststate property, which sits north of Russell Road, is visible from I-15 and would have views of the Strip similar to Mandalay Bay. The site is zoned for casino-hotels and could hold as much as 10 million sf of built space.
The previous owner of the site, Weststate Land of Los Angeles, acquired 58 of the 63 acres in 1988 for $5.7 million, or just below $100,000 per acre. It added the remaining 4.2 acres in early 2004 for $8.3 million, or just under $2 million per acre.
The new ownership group, which tied up the property in 2005, paid $201 million for the property, or about $3.2 million per acre. Frank declined to speculate on the value of the land, but other local sources tell GlobeSt.com the property could fetch as much as $15 million per acre.
In addition to Edge, the ownership group includes a joint venture of David Edelstein's TriStar Capital and RFR Holding, a German investment firm led by Aby Rosen and business partner Michael Fuchs, and publicly held Starwood Hotels & Resorts Worldwide.
In May, through a representative, Edelstein told GlobeSt.com he planned to spend the next 12 to 36 months deciding what to develop. In part, he said the wait is due to the amount of development already going on in Vegas, which has demand for manpower outpacing supply and driving up construction rates. Edelstein could not be reached for comment last week to discuss the decision to sell rather than develop.
Frank tells GlobeSt.com that Edge is considering selling the property because it's focused on the 50 acres it now owns in the Harmon Avenue corridor--the 25-acre site on which it is developing W Las Vegas in partnership with Starwood, and the adjacent 25-acre site of the defunct Las Ramblas development, which it acquired in June for $202 million, or $8 million an acre.
"Everybody has been real excited about the Harmon Corridor and (this acquisition) gives us the ability to control the experience there," Frank told GlobeSt.com at the time of the acquisition. "We believe to create a great experience you really have to master plan whole area to give it an identity and a character while still having enough breadth of product to appeal to different segments of the market."
The plan is to complement W Las Vegas by developing the Las Ramblas site with a large central casino and retail hub surrounded by a number of different hotel brands that spill into the hub. In addition, Frank says the master plan will include pedestrian connections between the two developments and possibly with the Hard Rock as well, which Peter Morton is on the process of selling to Morgan's Hotel Group. The project likely will get underway before W Las Vegas is complete, Frank said.
As for the Weststate land, the 10 million sf it could hold will likely translate to one or more casino-hotels plus residential towers, a large retail component and significant convention/meeting space. Its potential has been likened to MGM Mirage's planned $7 billion Project CityCenter and Echelon Place, a similar $4 billion development planned by Boyd Gaming Corp.
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