South Strip auction rolls snake eyes

June 04, 2002 2:30 PM
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            So much for a South Strip boomlet. A 65-acre parcel at Warm Springs and Las Vegas Boulevard went unsold on the auction block Monday.

            The property, appraised at $42 million, had no takers, despite a packed house at the Las Vegas Country Club. When auctioneer Robert Deiro dropped the asking price to $26 million, he announced to the silent crowd that the property owner would not accept any bid lower than $25.65 million. When the audience was unmoved, Deiro halted the sale and pronounced the proceedings over.

            Tom Lindstrom, owner of Imperial International Realty, confirmed that his company would not accept anything less than $25.65 million for its land.

            “There’s a profit to be made,’’ he told GamingToday. “By subdividing the property, it’s easily worth $45 million. And that’s what I plan to do.’’

            Before the auction, Richard Lee of First American Title talked up the location, noting that it has nearly a full mile of frontage along both Las Vegas Boulevard and I-15.

            He predicted that some 8,000 new rooms will be built along the Strip within the next 18 months. Almost half of those are ticketed for Mandalay Bay, which is just a mile or so north of the Warm Springs location.

            “This section, the beginning of the South Strip, could soon be called timeshare row,’’ Lee said.

            But Imperial’s rectangular tract hasn’t lived up to expectations. Earlier plans for a 3,000-room hotel-casino never got off the ground. And prospective bidders are leery about the 10- to 15-story height restrictions imposed on the site by the airport.

            Though small corner lots in the area have sold for as much as $30 a foot, brokers said Imperial’s $14.9-per-foot appraised price was just too steep.

            Real estate mogul Shawn Scott paid $17.8 million for the nearby Vacation Village last year. The 315-room hotel-casino, now shuttered, sits on 25 acres.

            “It’s sort of in between in terms of location,’’ Scott Gragson of Colliers International said of the Warm Springs tract. Disconnected from current Strip properties, it sits across from the Belz Outlet Mall.

            Meantime, Coast Casino’s Michael Gaughan is betting that there will be more action farther south. He purchased 60 acres across from Southern Highlands for just $5 per foot, and plans to build South Coast Casino there within the next three years.

            Deiro said there was still an outside chance that a buyer will come forward with a written offer. But as of press time, no one had matched the minimum bid requirement.

            “It’s unfortunate that no one wanted to pull their checkbooks out,’’ Lindstrom shrugged.