Nothing is planned for the area, the central nine acres of which--the Metroflag mall--are owned by Spectrum Group Management but managed by Chicago-based Urban Retail Properties. The latter seems quite content with its 83-store retail mall, which anchors the block, home to Hawaiian Village (a.k.a. The Hawaiian Marketplace). While tenants such as Walgreens do not share their revenue-per-square-foot data with LVA, it stands to reason that, in such a high-traffic area at the heart of the Strip, Metroflag and its retailers are doing quite well for themselves and lack an incentive to close up shop.
While Metroflag controls most of the 10 parcels between Harmon Avenue, others -- primarily Showcase Mall -- would have to be consolidated into the overall package in order to create the kind of megaresort you envision. The development would also have to wrap around the front of Polo Towers, a timeshare … much as The Cosmopolitan of Las Vegas had to do when confronted with the same situation by the Jockey Club: Buy out literally hundreds of condo owners, or build around them. Showcase Mall's new owners, Unilev Capital Corp. and Eli Grandi, don't appear to be going anywhere, either. In December, LVA reported that "an exterior facelift and some new stores" were planned for the attraction.
Not only would the long, relatively shallow strip of land constrain the kind of resort that could be built, much as The Cosmopolitan's "stacked" layout was a function of necessity, but financing could be similarly straitened. Both Alon and the (much smaller) Lucky Dragon resorts have encountered difficulty obtaining bank financing, and the same problem appears to be dogging the notoriously slow-moving Resorts World Las Vegas megaresort.
There is also the vexing question of who would want to embark upon such a massive undertaking. Both the former New Frontier and Stardust sites lay fallow for years before finding a buyer, and Carl Icahn is having great difficulty locating someone to take the half-finished Fontainebleau off his hands, at least at the current $650 million asking price. (The fact that it will take at least $1.5 billion more to finish the skyscraper – it it’s even structurally sound anymore -- could have something to do with it; demolition would be considerably cheaper, but lands the buyer back at square one.)
As for the major players in the industry, there's not much stomach for new Strip development at the moment. MGM Resorts International, whose MGM Grand is next door to Showcase Mall, is looking toward new markets, not the Strip. Caesars Entertainment is overwhelmingly burdened with debt and is concentrating on upgrading its existing Strip properties. Wynn Resorts just unveiled plans for Wynn Paradise Park, a hotel-casino with a manmade lake, where the Wynn golf course sits, and Boyd Gaming has quit the Strip, seemingly for good. Donald Trump, in partnership with Phil Ruffin, is planning a casino but it would be a low-budget ($100 million) affair, on land next to Trump International hotel that Trump and Ruffin already own.
"We have a lot of ideas and a lot of capital. We intend to clean it up and explore every option to upgrade it," Spectrum Managing Partner Jeffrey Schaeffer told the Las Vegas Review-Journal when Spectrum – a consortium of four investment firms – took over the site in 2011. Judging by your opinion of the area, Spectrum hasn't done a very good job. "We are experienced real estate investors and we intend to create value over time," Schaeffer predicted, so perhaps patience is in order.
Most of the acreage, between Harmon and Park was to have been the site of a high-end, Elvis Presley-themed resort that Robert F.X. Sillerman was hoping to build where Smith & Wollensky's now stands. That project not only never got off the ground, Sillerman’s acreage went into receivership and was taken over by Spectrum. Sillerman had envisioned a 4,000-room, 500-condo megaresort and had acquired the rights to Presley's likeness. One of his top priorities was to crack down on Elvis impersonators, which gives you some idea of the lunacy of his concept. After Sillerman's company plunged into bankruptcy, Spectrum gained for a "substantial discount" land that cost Sillerman $566 million to obtain.
Roughly a year ago, Spectrum was fishing for investors in what it described as "Project Jackpot," a casino development that would take the place of the Spectrum-owned/Metroflag-managed commercial properties, which the owners described as "a hodgepodge of shopping, parking lots, chain restaurants and a motel." The site had been written down to $220 million in 2008 and is probably even cheaper now, given the deflation of land prices on the Strip. However, "Project Jackpot" hasn't found any takers to date and -- with three other Strip casino projects in various stages of abeyance -- we don't expect activity on the Harmon/Park front anytime soon. Asked about the future of Metroflag and the status of Project Jackpot, Spectrum's Matt Grodin said, "We can't comment on that."
