The developer is Robert Zarnegin, president of Heritage-Nevada and Probity International Corp., a Beverly Hills, CA-based development firm. His exclusive negotiating agreement called for him to have accumulated letters of intent to acquire 25% of the planned 800,000 sf of commercial condominium space in a 60-story tower that would anchor the development.
The project's day-to-day manager, Bill Boyajian, a former president of the Gemological Institute of America, tells GlobeSt.com that 97 diamond and jewelry-related companies from 15 different countries have signed LOIs for approximately 32% of the tower. "We had very aggressive pricing for the first 10 companies and then we have obviously created a lot of publicity and have ratcheted up the price slowly and consistently such that the price is now $800 per sf and will stay that way for a while," Boyajian says. "The phone is not ringing off the hook, but interest has been very consistent."
Per the negotiating agreement, Boyajian says Zarnegin has submitted a draft disposition and development agreement and that the city is now reviewing. "We have submitted what we need to and now there will be some back and forth over the coming few months," he says. "A vote of the City Council to allow us to purchase the land is slated for January 2."
The development site is located near South Grand Central Parkway, W. Charleston Boulevard and Interstate 15. Current plans call for the commercial condominium space in the 60-story tower to be topped by approximately 80 luxury residential condominiums. Adjacent to the base of the tower would be a three-level, 125,000-sf public retail center filled with retail jewelry shops, a gem museum and a café.
In April, Boyajian told GlobeSt.com he expects a high conversion rate. "The hard part is getting people in the industry—[people] who usually make commitments via verbal agreements and handshake--to sign on the dotted line, even a non-binding letter of intent," he said. "The good news is that while it is harder on the front end, it should result in a higher conversion rate than is normal. I'm hoping [to convert] 80% not 50%."
The project was first announced in October with 10 companies having signed LOIs. By April, after an international presentation tour, that number of companies interested had grown to 60. To keep the LOIs flowing in, Boyajian has been presenting at industry trade shows and other industry events both in the US and abroad. One of the draws is the fact that World Jewelry Center would be a Foreign Trade Zone, which means jewelry companies will be able to avoid customs fees on all imported goods until they enter the commerce of the US.
The tentative development timeline calls for site work to begin in 2008. Project completion is slated for mid-2010.
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