Las Vegas City Project Off for Developer
By Heidi Genoist -- Tradeshow Week, 1/2/2006
LAS VEGAS—the city of Las Vegas and the developers of the World Market Center have called off their collaboration on a 61-acre urban development project across the street from the center.
Announced before the home furnishings complex opened last spring, the deal would have allowed WMC backer Related Las Vegas to oversee the master plan for the plot of city-owned land. Related and Las Vegas Mayor Oscar Goodman together envisioned hotels, mixed-use residential space, office buildings, a stadium, an Alzheimer's disease clinic and a performing arts center. The city is continuing with its plans for the latter two.
"The complex nature of creating an energized 61-acre urban development on the former rail yard is an enormous challenge, and both parties have worked in good faith toward achieving that goal," Goodman said in a statement.
However, blaming a dramatically shifting real estate market, the two parties couldn't come to terms on a final agreement. "Skyrocketing construction costs, high land sale prices and more competition throughout the (Las Vegas) Valley created an environment in which Related and the city could not agree upon mutually acceptable development obligations and timeframes," stated World Market Center spokeswoman Dana Pretner.
Las Vegas-based advisory firm Applied Analysis reported that the median price for land in the Las Vegas Valley reached a record high of $708,000 per acre in the third quarter of 2005, nearly double the price of a year ago.
Local news outlets have found some other development projects to be in peril, with high-rise condominiums Ivana Las Vegas and Liberty Tower among those reportedly scrapped.
Pretner said the loss of the city contract would not affect the World Market Center's own master plan. This includes six buildings encompassing 12 million square feet of design, showroom and convention space to be completed by 2015.
The campus already has one building open with 1.3 million sq. ft. The second building, with 1.6 million sq. ft., is 90-percent leased according to the center, which began its sales campaign for the third building's 1.5 million sq. ft. this fall.
Martin Burger, president of Related Las Vegas, said the company is still "very bullish" on the viability of downtown and Las Vegas in general. "As the primary partner in World Market Center, we will continue to build a diverse new economic base for downtown," he added.
The center in July launched its semiannual Las Vegas Market. In addition to occupying the World Market Center's permanent space, the tradeshow fills 350,000 sq. ft. of pavilions in the parking lot and several hundred sq. ft. of exhibit space at local convention centers.
The next market is scheduled Jan. 30–Feb. 3. Only one of the 15 hotels blocked for the show, the Golden Nugget, is located downtown.
