Las Vegas Developer Closes $ 80 Million Strip Package Deal
After the coronavirus epidemic disrupted daily life, turning the Strip into a ghost town of closed casinos and closed buildings, Las Vegas developer Brett Torino said he had started talks to buy a site for another project in the hallway of the oddly quiet seaside resort.
A year later, Torino has now acquired a small piece of land at CityCenter for a huge sum with plans to build a shopping complex. And with the rollout of vaccines and the return to normalcy of daily life, Southern Nevada’s once-crushed tourism industry has started to quickly come back to life.
“You see this recovery happening very quickly in this market,” said Torino.
Torino and New York developer Flag Luxury Group have partnered on an agreement, announced April 26, to acquire 2 acres at the southwest corner of Las Vegas Boulevard and Harmon Avenue, adjacent to the boutiques of the luxury mall in Crystals , for about $ 80 million.
The sale – by MGM Resorts International and its partner in the sprawling CityCenter, the public holding company Dubai World – closed on June 8, property records show.
The site housed the now dismantled and structurally flawed Harmon Hotel tower and sits at the intersection of Harmon Corner, a three-story shopping complex that Torino and Flag Luxury developed about a decade ago.
Torino, owner of Torino Company, said in an interview on Tuesday that the new four-level project will span around 200,000 square feet and that it plans to open by September 2022.
He calls him Project63, claiming that he and Flag Luxury boss Paul Kanavos were both 63 when he appointed him, but noting that that could change.
Torino, who started working in the Las Vegas real estate business when he moved here in the early 1970s, spoke to the Review-Journal to discuss his new plans for the Strip.
The interview has been edited for length and clarity.
Does MGM have any restrictions on what you can do on the site?
In fact, we designed it hand in hand with all the folks at MGM and their partner, the Dubai group. CityCenter is a beautiful complex; they just wanted to be sure that what was on their doorstep complemented the rest of the facility. We bought it for that reason, and we completely respected it for that reason.
What else interested you about the site?
I’ve been doing business on the Strip for almost 30 years now. Once you’ve learned the craft there, it’s intriguing. It is one of the most competitive real estate markets in the world. You are dealing with people who are sharp as razors. When COVID hit – I’ve known Bill Hornbuckle (President and CEO of MGM) for 40 years now – I asked Bill if there was an opportunity to do something on your site? He put me in touch with their partner at Dubai World, and we started a discussion. I never thought MGM would sell it. I just thought it was part of the CityCenter complex, and I figured they would want to keep control of it.
Obviously, you didn’t get a discount on the offer; it was around $ 40 million an acre, which could be a record for a vacant property on the Strip. Talk about the purchase price and what it reflects.
Truth be told, there are not 2 usable acres on this site. However, the lag is that you have the entire CityCenter underworld below this property. So, yeah, a lot of money, yeah, you don’t get 2 usable acres, but you have a whole bunch of ground-level infrastructure – distribution facilities, waste facilities, parking, utilities. It’s part of a huge complex that we were hooking up to.
Listing broker Michael Parks told me that not only can you rent retail space on the site, but you can also sell advertising space outside the building, just like you do on the large LED display at Harmon Corner. Is this something you plan to do in this project?
The existing board at Harmon Corner is approximately 18,000 square feet. This board, at Project63, will be between 5,000 and 6,000 square feet in area. The vision was that we will have two spectacular LED displays, so that we have the opportunity to take advantage of our domestic customers and run parallel advertisements.
So you can sell space on both sides at the same time?
Can you tell us about the tenants you hope to get at Project63? Would they be luxury retailers, like at Crystals, or more affordable stores?
It will be a step forward from Harmon Corner and possibly a step back from Crystals. Harmon Corner is and has been very successful for the tenant base that we have there. Project63 is going to be an upgrade, but we don’t want to compete with Crystals. We’re over 50% of 63 pre-published already, but I can’t start getting into the names.
Long before the pandemic, brick-and-mortar retailing was struggling across the country, including Las Vegas. Why does the Strip look so different? Is it just because a lot of people are walking around every day?
It is an aspect. Retailers want flag opportunities on the Strip. They want this exposure; they are willing to pay for it. During COVID, if you went into Crystals and looked at luxury brands, there were lines of people waiting up to an hour, an hour and a half to enter stores to shop. The average Las Vegas customer is going to come here, they’re going to spend these retail dollars. It’s just nature. Las Vegas is not going to go away. COVID hasn’t changed anything.
He certainly stopped him for a while.
Of course. Absolutely. All of our tenants stayed open on the Strip, but of course we had to help them and we wanted to do whatever we could for them. But they are coming back in force. At the worst times, they were between one-third and one-half of their usual sales. Now their sales are back to 2019 levels.
Have you ever taken a walk or a drive along the Strip when everything was closed just to see what it looked like? What do you remember thinking about?
Hope we don’t see another one. It’s strange. In a very surreal sense, it is very beautiful, but as a businessman, it is not very beautiful. I cycled along the Strip; it’s just a very strange event.