Sun Plaza groundbreaking moved to January

Brian Seals

Monday, Dec. 7, 1998 | 11:30 a.m.

Groundbreaking for the 14-story Sun Plaza office building in downtown Las Vegas has been pushed back to January with the expected completion date now projected in the first quarter of 2000.

The project is a joint venture of American Nevada Corp. and Nevada State Bank. The city of Las Vegas contributed $6.4 million as a redevelopment incentive. Members of the Greenspun family control both the Las Vegas Sun and American Nevada, which is best known for residential and commercial development in Green Valley.

Groundbreaking for the $57 million downtown project was originally set to begin in April. That was later pushed to August with completion expected in late 1999.

Nevada State Bank President George Hofmann said construction is now expected to begin in January. He said the delays were generally due to the complexities of developing a large-scale project and modifying plans to meet city building codes.

"With a $57 million project, a month one way or another is inconsequential," Hofmann said.

Aside from the partners in the venture, the Harrison, Kemp and Jones law firm is the only tenant so far, having signed a 10-year lease for 16,000 square feet.

But Hofmann isn't overly concerned about leasing at this point.

"Non-leasing is always a concern," he said. "But as we researched the market we found Las Vegas is not a big pre-leasing market."

The lack of pre-leasing has increased the cost of financing the project and financing is still under negotiation, said American Nevada Corp. President Phil Peckman.

"It's a difficult transaction, but we're still moving ahead," Peckman said.

Hofmann expects tenants to come forward after construction begins. Randy Broadhead, first vice president with CB Richard Ellis, agrees. Broadhead said pre-leasing is difficult in the office market and prospective tenants tend to come forward when they see construction activity.

"It will fill up once it gets built," Broadhead said. "It may take 10 to 12 months to do it, but it will fill up."

When completed, the building will have 270,000 rentable square feet. Office suites will range from 200 to 20,000 square feet. Rents range from $2.30 to $2.50 per square feet. That compares with rents of $2 per square feet and less available in the Northwest and Green Valley areas.

That could pose problems in landing tenants that are willing to locate anywhere in the Las Vegas Valley, but tenants that want to be downtown have little other alternative, said Broadhead.

"Basically, downtown needs another building," he said.

In addition to office space, the building will feature retail space, limited food service and an 850-space parking garage.

Sun Plaza is one component of an overall downtown revitalization effort. Others are a $96 million federal courthouse on Las Vegas Boulevard now under construction, an $84 million regional justice center and the $99 million Neonopolis entertainment complex to be built near the Fremont Street Experience.