Both the absence of the gaming entitlement and the recent, four-alarm conflagration will be doing quite a number on the Key Largo’s asking price. It had already been discounted from $79 million to $48 million, although listing agent Mike Mixer, who handles the Key Largo for Colliers International, notes, "We had reduced [the price] long before the fire." Now that the Clark County Department of Buildings has ordered that the remnants be razed by their Florida-based owners, $5.9 million an acre is quite a bit to be asking for empty land on Flamingo Road.
"The developers planned to build something else [condos]," continues Mixer, by way of explaining why the Key Largo’s grandfathered gaming entitlement (it opened in 1973) wasn’t preserved the way that of the Castaways, for instance, is. He estimates that the underlying gaming-enabled status lapsed in 2008. Therefore, a casino could reopen on the site but would have to comply with newer criteria, passed in 1992, which include 200 or more hotel rooms, a 24-hour kitchen, and 2,000 square feet of public space.
At eight acres, the "footprint" of the Key Largo is small enough to discourage the kind of development that is expected of a new Vegas casino. That becomes even more of an issue when one considers the extent to which the casino, amenities and hotel rooms would have to be spread out: As you mention, the ex-Key Largo lies beneath a McCarran International Airport flight path, limiting vertical construction to 450 feet, and providing another disincentive for redevelopment.
Whatever the price, it’s awfully steep. The Echelon site on the Strip recently changed hands for about $4 million an acre, has less of a height restriction, is gaming-enabled, and is in a high-traffic location. The Key Largo’s only casino neighbors are low-roller joint Terrible’s, across the street, and the Hard Rock Hotel & Casino, a block to the south. Siegel Group’s nearby "Atrium" project is at a standstill.
