In the works since 2004, the most recent timeline was for the hotel-condo project to be underway by the end of this year and open in 2010, flying Hilton's Conrad and Waldorf Astoria luxury flags and being managed by Hilton. Then Hilton was acquired by Blackstone Group and things became less clear, Majestic Resorts CEO Lorenzo Doumani tells GlobeSt.com.
"I don't even think Hilton knows exactly what it's doing at this point. They are under contract (with regard to our project) but everybody I ever dealt with [at Hilton] is no longer there," Doumani tells GlobeSt.com. "It's hard dealing with a constant revolving door of executives because you have to re-educate them; it's a huge problem."
That being said, Doumani says he expects clarity before 2008. "We'll see what happens," he says. "Hopefully by the end of the year we will have resolved the contractual situation. They owe me a ton of money and we're trying to settle."
Going forward, Doumani's advantage over many other planned Strip projects is his cost basis in the land, which is virtually nothing. His grandfather acquired the 5.5-acre site 50 years ago for less than $100,000 an acre. Recent transactions suggest a current land value in excess of $35 million an acre, giving Doumani nearly $200 million of equity to work with.
"With a lot of these projects that were announced but never happened, the [players involved] never really owned the land," he says. "They have options and then see if they can do presales and, if not, they turn around and sell it entitled. Very rarely does someone have 100% equity in a property."
At last check, Doumani's project called for a 654-foot tower housing a 216-room Conrad Hotel topped by 696- Conrad-branded condo-hotel units starting topped by 76 Waldorf-Astoria-branded residences. Amenities include a large pool deck and a full-service spa. The project was designed by Paul Steelman.
Doumani's project is not the only one in limbo. Just down the road, Columbia-Sussex Corp. says the start of its 8,000-room addition to the 50-year-old Tropicana resort in the heart of the Strip has been delayed due to unstable credit markets (for that story, click here).
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