Question of the Day - 28 January 2023

Sadly, there’s precious little to add to our previous recap of a couple of years ago.

The unfinished St. Regis tower remains a lingering challenge for new owner Vici Properties and new operator Apollo Management. Neither Vici and Apollo nor The Venetian's PR department responded to our queries about the St. Regis, opting for a deafening silence instead.

As originally planned way back in September 2008, a 43-story condo-hotel tower was supposed to go up in front of the Venetian/Palazzo complex, with a massive Walgreens at its base. The latter was a tradeoff with the proprietors of the Walgreens that had been displaced to make room for Palazzo. The Walgreens is doing fine, we understand, occupying some of the most enviable real estate on the Las Vegas Strip. The same can't be said for the St. Regis.

Las Vegas Sands — which recently washed its hands of the problem — had big dollar signs dancing in its eyes when the St. Regis was incepted more than 16 years ago. A $2 billion profit was envisioned on a $450 million construction investment, with the grand opening announced for March 2010. Sands began constructing the St. Regis in early 2007 and was sufficiently optimistic to begin to selling condos the following September.

These weren’t any old condos, either. Some were as large as 10,000 square feet, with luxe finishes and furnishings, private pools, and butler service. 

However, optimism and reality soon parted company. Not only did the budget escalate 33%, Sands was caught out by the stock-market crash and ensuing recession of 2008 and abruptly pulled the plug on construction. Worked stopped that November, never to resume.

All that remained of the company’s confidence in the Las Vegas condominium market (which collapsed even before Wall Street did) was an unsightly skeleton protruding its bony fingers into the sky. Sands President Michael Leven put up with it until 2010, when he had the brainstorm of cladding the cadaver with canvas flesh, in the form of an eye-fooling wrap, one that makes the half-done St. Regis seem finished.

Leven pondered finishing the St. Regis, but as he said at the time, “The numbers didn’t work out.”

Given the long slow recovery of Las Vegas from the Great Recession, Sands determined that completing the stump would be more costly than simply leaving it as an eyesore. In the end, Sands seemed only too happy to punt the St. Regis ball into Apollo’s court.

Which is where it remains. If Apollo wants to complete the tower, it will need permission from its landlord Vici, which would ultimately have the say-so on whether Venelazzo needs more hotel rooms or not. The condo ship, alas, has sailed.

As for Vici, it's battling major cost overruns on MSG Sphere on the other side of the Venetian and has just agreed to loan Fontainebleau $350 million to ensure that it's completed on schedule. So at the moment, it's fully engaged elsewhere.

In addition, Vici describes itself as "a passive real-estate landlord completely behind the scenes. Our operators run the businesses in the shape or form they do best. We don't get involved. We're a very efficient business model, because we collect the rent and let our operators succeed.”

Thus, with Vici's otherwise engagement and non-involvement stance, it appears that Apollo is on its own to complete the St(ump) Regis. 

Still, speaking of Fontainebleau, we say that if that much-hexed project can be brought to fruition, anything's possible for a partially finished hotel tower on the Strip.

Of course, completing the St. Regis would certainly be priced much higher than the $600 million it would have taken in 2008, so we strongly doubt Vici will tackle that particular task anytime soon. And what the hell. It's been sitting there exactly as is for 13 years.

Maybe someday. But not now.