By Richard N. Velotta and Eli Segall | Originally published in Las Vegas Review-Journal | March 9, 2023
After the high-priced sale of a north Strip lot fell through, two developers are set to buy it for an even bigger amount.
Las Vegas developer Brett Torino and New York’s Paul Kanavos, who built retail projects on the Strip together, have teamed up to buy a 10-acre parcel just south of Fontainebleau Las Vegas for $125 million from the Las Vegas Convention and Visitors Authority.
The LVCVA board is scheduled to consider the sale Tuesday. The property, at the southeast corner of Las Vegas and Elvis Presley boulevards, occupies part of the footprint where the Riviera stood.
Proceeds from the sale would help finance a $600 million Las Vegas Convention Center renovation project scheduled to start in April.
The buyers declined to comment Thursday.
The LVCVA voted in fall 2021 to initially sell the 10-acre plot to Chilean developer Claudio Fischer for $120 million. But the sale failed to close last year, and the LVCVA kept a $7 million nonrefundable deposit and put the parcel back up for sale.
The latest sales attempt would put the property in the hands of developers with a track record of building projects on the Strip. It would also mark another lucrative real estate sale in Las Vegas’ famed casino corridor, which has had a surge of property transactions over the past few years and rising land prices.
Torino, owner of Torino Companies, and Kanavos, chairman and CEO of Flag Luxury Group, teamed up more than a decade ago to develop a three-story retail complex at the northeast corner of Las Vegas Boulevard and Harmon Avenue.
The project, called Harmon Corner, features tenants such as Bubba Gump Shrimp Co. and Sugar Factory.
More recently, they built a four-story retail project called 63 at the southwest corner of the same intersection, next to luxury mall The Shops at Crystals at the multi-tower CityCenter complex.
The new project is slated to feature such tenants as Ocean Prime, whose operators said they’d invest nearly $20 million in the seafood and steakhouse restaurant set to open this spring.
Terms of the deal
As part of the land sale, the 14-member LVCVA board is slated to consider spending $2 million on closing costs and other contractual requirements.
The clock on a 90-day due diligence period begins upon approval of the deal. If the purchase and sale agreement gets the green light, the buyers have five days to make a $3 million initial deposit. By the end of the due diligence period, an additional $2 million will be required from the buyers.
The sale must be completed by Sept. 11, according to the tourism agency’s meeting agenda.
As part of the agreement, the LVCVA carved out two time frames to license the parcel for $1: in late October and early November for the Specialty Equipment Market Association automotive trade show and in December and January for the tech megashow CES 2024.
Similar to its agreement with Fischer, Torino and Kanavos will be required to begin construction within 10 years, meaning the latest construction could begin is 2033.
Should the new buyers decide to sell the property, the LVCVA would have the first crack at buying it back.
Stretch of the Strip
A decade or so ago, after Las Vegas’ once-supercharged real estate market imploded, the north Strip featured halted megaresort projects, big land tracts where massive developments never materialized and minimal foot traffic.
The area still gets less foot traffic than other parts of the Strip, and there are still big parcels of land with an uncertain future. But the north Strip has gained momentum.
The 67-story Fontainebleau, reacquired two years ago by original developer Jeffrey Soffer, is under construction and scheduled to open in the fourth quarter this year.
Resorts World Las Vegas, a $4.3 billion project with 3,500 rooms, debuted in June 2021 to a crowd of at least 20,000 people on its opening night. The Las Vegas Convention Center’s new $1 billion West Hall opened the same month.
The LVCVA bought the Riviera hotel-casino in 2015 for $182.5 million, acquiring the 26-acre site for Convention Center expansion space. It imploded the resort.
Authority officials have talked about selling the corner plot — now eyed by Torino and Kanavos — since at least February 2019, when President and CEO Steve Hill told a breakfast meeting of NAIOP, a commercial real estate association, members that the agency would look to sell about 10 acres of the former Riviera site.
At the time, Hill did not offer an estimate on how much the parcel could be worth, though he thought it would fetch top dollar.
“It may be the most valuable piece of property that a government agency has ever sold,” Hill told the Review-Journal.
In March 2019, the LVCVA hired brokerage firm CBRE Group to sell the property. No asking price was given.
Contact Richard N. Velotta at [email protected] or 702-477-3893. Follow @RickVelotta on Twitter. Contact Eli Segall at [email protected] or 702-383-0342. Follow @eli_segall on Twitter.
