Florida real estate magnate R. Donahue Peebles plans to build a $2.5 billion hotel and mixed-use condominium project on 13 acres about a half-mile east of the Strip on Paradise Road.
Peebles' development, Las Palmas Hotel and Residences, would have four 55-story glass towers with 800 luxury hotel suites and 1,000 condos. The first phase of the five-star, nongaming hotel would include themed shops, upscale restaurants and designer boutiques.
Peebles, founder and chief executive officer of Coral Gables, Fla.-based The Peebles Corp., reportedly paid $65 million for the land, with Credit Suisse providing acquisition financing.
Development plans for the 4.5 million-square-foot project have been approved by the Clark County Planning Commission. The first building is expected to open in 2009.
Condominium prices will range from $600 a square foot to more than $1,000 a square foot. Hotel room rates will range from $400 a night to several thousand dollars for suites.
The project signals the strength of the Las Vegas real estate market, Peebles said. Other Strip projects include MGM Mirage's $7.5 billion CityCenter, Wynn Resorts Ltd.'s $1.7 billion Encore, Boyd Gaming Corp.'s $4 billion Echelon and Fontainebleau Resorts' $2.9 billion Fontainebleau.
"As Las Vegas continues to mature as a world-class destination, so do its travelers," Peebles said in a statement. "Paradise Road, recognized as the new and more exclusive Strip, is becoming the spot for the sophisticated Las Vegas traveler."
Las Palmas will be at 3550 Paradise Road where an apartment complex exists by the same name.
The site plan consists of four high-rise structures, three condo buildings and a hotel tower with residential units. The Federal Aviation Administration has said the 550-foot height of the towers won't interfere with air traffic.
The towers will sit on 10-story parking garages with restaurants and retail on the ground level. On the top level of the podiums will be a pool, exercise and recreation deck.
"(The property is intended for) higher-profile businesspeople, entertainers and celebrities who want to be in Vegas, but want more privacy and security when they go back to the place where they're staying," Peebles said.
The mixed-use project will include shopping, dining and entertainment along a wide boulevard that is open mostly to pedestrian traffic.
But there's at least one skeptic.
"How many times have I heard this?" Las Vegas real estate consultant John Restrepo asked. "He's never done anything close to $2.5 billion and all of his stuff is back East in Miami. I don't see any experience. Who knows what his role was in these other projects. He could be real or he could be the Miami version of Victor Altomare."
Australian developer Altomare once proposed to build the 60-story Ivana tower in Las Vegas, as well as Liberty Tower. Both projects were cancelled.
The architect for Peebles' project is Miami-based Arquitectonica, one of the architects for Las Ramblas. The $3 billion Las Ramblas project, a joint venture between Las Vegas-based Centra Properties and Florida-based Related Cos., was canceled. Other high-profile mixed-use condo projects that have failed in Las Vegas include W Hotel and The Curve.
The Miami Herald reported that Peebles "has taken a break from projects in Miami-Dade as the region's current development boom is digested."
His projects in Miami include The Lincoln, The Bath Club and Royal Palms Hotel. He also built a $112 million office building in Washington, D.C.
The 47-year-old Peebles is recognized as one of the country's most successful black real estate developers with a $4 billion portfolio.
Frank Nason, principal of Residential Resources, said it's apparent from his preliminary research that high-rise demand is much smaller than anticipated and a project's success seems to be driven primarily by location and who the developer is.
"Just as Del Webb can make a market, such as in Mesquite, by their name, in the high-rise it seems to take a Trump or a Turnberry or MGM (Mirage) to make these things fly," Nason said.
"I don't claim to fully understand vertical development. However, it appears the apparent success of Boca Raton and the one at Harmon and Dean Martin Drive (Panorama Towers) was more a matter of timing - that is, hitting the market when construction costs were manageable and demand was at a fever pitch," he added. "Making a mixed-use project work seems to take a pretty savvy developer."