Rain, rain ...
The red carpet leading from the Cosmopolitan's sales center to two tents in the back—where dignitaries, politicians and VIPs mingled, nibbled hors d'ouevres, sipped froufrou drinks and dodged occasional torrents cascading from the roofs—was soaked. Fifteen minutes past the press conference's 10:30 a.m. start time—kind of hard to do a groundbreaking when the ground's wet—a voice on the PA system directed attendees to the sales center, where curtains shrouded a scale model of the $1.8 billion resort-casino. (As a folks headed in, the construction worker who was to scoop the first pile of earth for the Cosmopolitan began hamming it up for a photographer, levitating the backhoe's crane up and down).
Once inside, there were the expected ooohs and ahhs over the model—an 8.5-acre project anchored by two shimmery, 600-foot aqua-blue condominium towers. A replicated slice of South Beach right on the Strip.
"I hope this represents an evolution of Las Vegas," broadcasted Ian Bruce Eichner, chairman and chief executive officer of the property's developer, 3700 Associates. He ran down all the ways the Cosmopolitan is different from anything else in town.
No traditional theming ...
Front door is at the sidewalk ...
Transparent, "like a glass ballroom facing the Strip" ...
Decks at the top will have a pool, club ...
"Have you seen anything quite as funky?"
Well, this is Vegas.
3700 Associates President David Friedman, former right-hand man to Las Vegas Sands Corp. chief Sheldon Adelson, promised a knock-your-socks-off lineup of retail stores and restaurants. "You've heard about all the projects, but this will be best mixed-use project on the Strip."
"We've been trying to get a Strip location for decades," added Thomas Pritzker, chairman and CEO of Global Hyatt. "I think this will be the greatest project on the Strip."
Big words, considering MGM Mirage's mammoth Project CityCenter, $5 billion worth of casino, condo, hotel, retail and entertainment space.
The team is certainly in place to back up the boasts: Friedman's impeccable gaming credentials; design from Miami-based Arquitectonica (whose laundry list of projects include the Miami City Ballet, New York City High School of Architecture and Urban Planning and the Regent South Beach); the Friedmutter Group's architectural chops; Hyatt running the hotel. The Cosmo is scheduled to open in mid-2008.
The money's there, too, Eichner says all 1,344 rooms in the first tower have been sold. "These are hard contracts." Translation: The loot, some $100 million, is already in hand.
If only all the gazillion luxury condo projects were so lucky.
After failing to sell enough units to secure financing, developers of the Krystal Sands high-rise sold the land to veteran condo developer Turnberry Associates, angering investors. The carnage fits with a Deutsche Bank study earlier this year that predicted only 30 percent and 40 percent of the nearly 37,000 proposed condo and hotel-condo units planned through 2010 will get built—about 9,000 to 13,000. Some analysts worry whether there's enough demand for the supply of luxury units, many of which are priced outside the means of most Valley residents.
Which brings us to Miami.
Our sister city in outsize capitalism and overt hedonism is experiencing a bit of Vegas-ization. A Miami New Times headline has dubbed it "the Great Hotel War of 2006."
Where Vegas' condo boom has analysts jittery, Miami has a glut of luxury hotel rooms either open or coming online. "Boutique hotels are now less a niche than the city's norm," Brett Sokol writes in New Times. "Which raises a troubling question: Are there enough wealthy travelers to fill all of those high-priced rooms? Or is there an impending bubble of luxury hotels?"
David Kelsey, president of the South Beach Hotel & Restaurant Business Association, told the paper, "This is a fickle market."
According to the article, Kelsey says an economic downturn would "winnow the glut of operators now concentrating exclusively on the swanky 'carriage trade'."
Sounds eerily similar to the Deutsche Bank report: "Other risks include general economic weakness affecting casino visitation to the Strip, terrorism, increased competition in the high-end hotel segment and volatility of high-end table play."
Which brings us back to Vegas and Miami and the concern both cities should share: Be the place to be.
As Kelsey told Miami New Times: "The younger ones with money, the ones that are here because this is a trendy place to party hard—they're going to be happy until the trend moves somewhere else."