By Ken Ward / Las Vegas Business Press /
November 15, 1999
Clark County has approved plans for 8,000 hotel rooms and 1,000 timeshare units along a one-mile stretch of Koval
Lane as developers target the densely populated corridor just east of the Strip for Vegas-style redevelopment.
But the dreams of towering casinos and tourist-oriented accommodations remain stuck on paper. None of the projects-
some approved more than a year ago-have turned a spade of dirt.
That could change next month when Fairfield Communities expects to break ground on a 1.3-million-square-foot timeshare
near Koval and Harmon Avenue. The Orlando-based company plans to build 600 condominium units just east of the Marie
Antoinette Apartments.
"We're looking at a January 2001 opening," said Dean Parker, vice president of sales and operations for
Fairfield Las Vegas.
With a $100 million line of credit and 32 timeshare resorts around the world, Fairfield advertises itself as the
largest vacation ownership company in the country. The firm paid $12 million cash for the seven-acre parcel fronting
Harmon Avenue, and Parker said Fairfield has lined up financing for its $120 million resort.
Other ventures aren't nearly so organized or financially endowed.
Fairfield's east side neighbor, Lake Tropicana, won county approval for a 554-unit timeshare development. But its
owner, Lake Trop LLC, has declined to provide any financial details about the project. Calls to Lake Trop's Southern
California offices were not returned.
According to documents filed with the county, Lake Tropicana would retain five existing condominium buildings and
construct two 13-story towers on the seven-acre site.
Equally sketchy and more grandiose are plans for the Caribbean hotel-casino near Koval and Flamingo Road. Approved
by the county in July 1998, this project calls for a 40-story, 3,076-room resort.
But except for the erection of the Caribbean sign, there has been no building on the lot owned by the Charles Heers
family. And now, project spokesman Robert Dietrich reports that the Caribbean theme is dead.
Dietrich said negotiations to buy out apartments on the property's eastern edge have stalled the project. Some
26 apartments have been purchased thus far, but another 12 remain.
Declining to divulge further details, Dietrich advises, "Just check back in a couple of weeks."
Harvey's had similarly grand plans for a 32-acre parcel at Koval and Harmon. The casino company obtained county
approval last year for a 33-story, 2,500-room resort spanning 2.6 million square feet.
But the company then backed away from the project.
Jim Rafferty, senior vice president of corporate marketing, said Harvey's wanted to see Las Vegas absorb its current
round of resort construction before moving forward. Harvey's acquisition by Colony Capital Inc., the Los Angeles
real estate investment trust, might have also complicated the equation.
The parcel, except for the corner lot occupied by the Drink nightclub, is owned by Grand Plaza LLC and is now back
on the market. The 660 vintage apartments along Harmon are rented on short-term leases by Realty Management Inc.,
whose owners control Grand Plaza.
Whatever the reason for Harvey's decision to bow out, Polo Towers owner Steve Cloobeck says starry-eyed developers
ought to take heed.
"This is not a simple market, but it continually attracts people who have delusions of grandeur," he
said. "They come in, put their plans out and get their 15 seconds of fame. In 20 years there have been more
fly-by-night outfits than I can count."
Cloobeck isn't exactly an unbiased observer, but he is conversant with the business. He is Las Vegas' biggest timeshare
developer, with 1,050 units at the Polo Towers and Jockey Club on the Strip. He's also adding to his holdings,
building a third Polo tower and now managing the Carriage House.
Patrick Donnelly, general manager at the upscale Marie Antoinette apartments, echoes Cloobeck's doubts about the
depth of the vacation rental market.
"How are all these timeshares going to work when hotels give you a room for free?" he asked.
Donnelly, though, said his millionaire tenants are anxious to see something positive happen in their neighborhood.
Vacant properties and aging apartments in the area have been magnets for vagrants.
Looking to protect their property rights, the owners of the Sunrise and Olympic Circle apartments at Koval and
Sands Avenue applied last year for a zoning change to allow gaming. And, once again, the county obliged by giving
preliminary approval for a 39-story, 2,500-room hotel-casino on the site.
Attorney Chris Yergensen, who represents Olympic Circle's out-of-town owners, said his clients sought the zone
change to maximize their options, as well as their potential land value.
"Gaming is double or triple the residential value," he said. At this point, there are no specific plans
to move forward with a casino venture, however.
The county has facilitated moves to upgrade zoning on a number of properties in the area. The Monterey Grand Manor
directly south of the Lake Tropicana project has received a resort zoning designation. Ultimately, that parcel
could be linked with adjacent land stretching down to Tropicana Avenue.
In granting zone changes for gaming and timeshare ventures, the county has routinely rubber-stamped variances on
setbacks, height restrictions and other code requirements.
Cloobeck, for one, objected to Lake Trop's request to reduce the number of required parking spaces from 656 to
476, complaining that it would set a bad precedent for future development. When combined with smaller setbacks
and high-rise towers, nearby residents noted that traffic problems in the heavily traveled area will worsen. The
objections were brushed aside and the waiver was issued.
Despite the blessings bestowed at the County Government Center, Cloobeck isn't surprised that the projects continue
to languish.
"There are tremendous barriers to entry in this market," he said. "When these marketers and promoters
go to the lenders they get slapped.''
For its part, Fairfield is bullish on the Koval corridor. The developer has formed a partnership with Harrah's
to cross-market its timeshare product. Daily shuttles and promotions will encourage owners at its Grand Desert
resort to make Harrah's their "home base" for gaming action, said Suzanne Trout, the casino's vice president
of marketing.
The average price for timeshares at Grand Desert will run from $10,500 for a studio to $18,000 for a three-bedroom
penthouse, and Fairfield executives don't expect any problems selling out the intervals valued at an aggregate
$500 million.
Meantime, if the proposed Strip monorail is built, other Koval land holders could benefit. The elevated line would
run a quarter-mile up the street to Sands Avenue, crossing the Sunrise-Olympic property. And under the terms of
the county's transit contract, any casino along the route has the right to tie into the monorail system.
Used with permission
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