Vegas Inc reported last week that investor/developer Howard Bulloch is selling the 38-acre south Strip parcel where he’d been planning to build SkyVue. Don’t remember that project? Don’t feel bad. A lot is happening on the Strip, and it’s tough to keep up.
You know those two towering concrete columns just hanging out across from Mandalay Bay? That was supposed to be SkyVue, a 500-foot-tall observation-wheel attraction intended to be surrounded by retail and restaurants. It’s not going to happen, and it always seemed like a long shot—especially since Caesars Entertainment’s taller High Roller wheel at the Linq Promenade came along quicker.
It’s the second high-profile Strip site to get listed in recent weeks. To the north on Las Vegas Boulevard, the never-occupied, towering Fontainebleau resort building—bought out of bankruptcy by billionaire Carl Icahn in 2010—is available for $650 million. Considering the hotel tower and casino space are about 70 percent finished, it appears to be a much more valuable property than the SkyVue site.
Also impactful is Fontainebleau’s location. Even though SLS—the first new casino to open on the northern portion of the Strip in seven years—has struggled mightily since its arrival last year, the perception remains that the north end is where it’s at. There’s opportunity and action there. Genting Group’s Resorts World Las Vegas and Crown Resorts’ Alon are both in the early stages of construction on the west side of the Boulevard between Fashion Show Mall and Circus Circus. One new ground-up megaresort is enough to shift the Strip’s momentum; we have two coming. Add in the impending destruction of the Riviera, set to become the hub of the LVCVA’s Global Business District—more convention and exhibition space—and it’s easy to understand the northern buzz.
“There is a lot going on, but I think what precipitated all of this was MGM,” says Steve Sisolak, who, as chairman of the Clark County Commission, is essentially the mayor of the Strip. “With Alon and Resorts World, it’s definitely a couple of years from that first shovel to actually booking a room night. A place like Fontainebleau is very interesting, if someone wants to put up the money to finish that one, depending how anxious someone is to get into the market ... But I think when MGM announced it was building its arena a year and a half ago, that got everybody re-energized. It showed a lot of confidence in the Strip and helped bring more [investment].”
The 20,000-seat Las Vegas Arena, a partnership between MGM Resorts and AEG that could be renamed by a corporate sponsor by the time it opens for events in the spring of 2016, is located between New York-New York and I-15. It will be fixed at the western end of the Park, an outdoor, pedestrian drag of restaurants, bars, shops and entertainment options branching off the Strip, similar to the Linq.
“Casinos are always nice but we’ve got quite a few. We don’t have an arena of that magnitude,” says Sisolak. “It’s unique, and if it does generate a [major league] hockey or basketball team one day, that would be really exciting for us.”
It remains to be seen if a unique development like the arena, on the south end, will create a rising-tide effect that could benefit a property like SLS, on the north end. But it’s clear the Strip’s future is based on a blend of alternative, non-gaming attractions—like the arena, the Park, the Linq and outdoor festival-event venues—with traditional Vegas-style resort development.
It seems natural someone will finish the Fontainebleau into their own new casino and hotel, something to compete with Alon and Resorts World. The SkyVue site, basically between the Tropicana and MGM’s Las Vegas Festival Grounds, is a blank canvas. Whatever happens there will have to contend with a serious lack of tourist foot traffic, the same essential problem for SLS. Look for something other than a casino to develop there.
