North Strip set for ‘urban renewal’

May 8, 2007 8:03 AM

MGM Mirage acted quickly to buy major parcels of mostly raw real estate at the Strip’s north end near Sahara at an average price of about $17 million an acre. One of the reasons for buying now as opposed to later was to keep the land from developers or speculators.

Even the land on the west side of Las Vegas Boulevard between Sahara and the Stratosphere — once known as the "Naked City" area of Las Vegas — looks like it is in transition, from the old, ugly low-rise structures getting ready to give way to the big ideas and bankrolls of future development.

Maybe Whitehall (or even Kirk Kerkorian’s guys) is in the process of buying that property too. Someone is.

MGM Mirage CFO Jim Murren says, "People want to invest in Las Vegas real estate," adding that MGM has gotten an "overwhelming amount of interest" from groups or individuals proposing joint ventures.

There have been huge changes since Bob Stupak conceived of the Stratosphere as a means of drawing people north from the Sahara at what was then the edge of The Strip to his Vegas World. He was taken with what was then a new and very tall Sahara marquee, sitting there big enough to make it look like just a short walk from his casino.

Stupak decided to try his own version of the same thinking.

Perhaps the Whitehall-Icahn deal that includes the Stratosphere will heat up the reported interest in properties such as the Las Vegas Hilton and its 60 acres where well-connected but unrelated sources say there is a lot of interest.

There was a time when Penn National Chairman Peter Carlino was reluctant to see his company’s name linked in the same sentence with either Las Vegas or Atlantic City. The time was never right.

But everything has changed.

"A couple years ago, a year and a half ago," he says, "We looked around and we said, we’ve gotta go there, and indeed we do."

But having admitted this much, he points out the obvious: They are two very different markets.

"The thing about Las Vegas," he continues, "it does not need just another casino, it does not need Penn National."

Carlino added that companies need carefully thought out plans to strike it rich in Las Vegas.

Penn might have gotten there via its failed effort to acquire Harrah’s Entertainment, but that’s all history now. Creating something that is right for Las Vegas, Carlino says, requires very focused thinking.

"We have to approach (Las Vegas) with enormous caution," he says.

Atlantic City is another story.

"It can use maybe five or six dramatic (new) casinos," Carlino explains. "There, it is just a matter of finding the right piece of ground and getting the city to open to the opportunity."

Steve Wynn struck a similar tone in recent comments to the effect that Atlantic City needs an attitude that has been difficult to find at city hall.

"Imagine," Carlino says, "what Las Vegas would be like if it had taken the Atlantic City approach to encouraging development."

You’d have casinos on one little piece of ground in one part of the city and that would be that, he suggests.

"In Las Vegas, there is a whole different view about building."

But Carlino clearly has his mind on some bright East Coast possibilities. "There is no reason," he says, "Atlantic City can’t be the Las Vegas of the East."

Is Carlino considering a possible effort to open the (recently closed) Bader airfield to development?