Ritz-Carlton, Mountain Spa cancel hotel deal

David Strow

Wednesday, April 5, 2000 | 11 a.m.

After three years of talks, one of the world's best-known luxury hotel chains has called off plans to develop a resort in northwest Las Vegas.

In 1996, Mountain Spa Resort Development announced Ritz-Carlton would develop a non-gaming hotel at the upscale resort development. Both companies now say those plans were recently scrapped, though neither side is saying why.

"Both parties have mutually and amicably agreed to separate at this time," said Dawn Christensen, spokeswoman for Mountain Spa. "(The companies) pretty much just came to the conclusion that they would mutually part and go their separate ways."

Shelby Taylor, spokeswoman for Ritz-Carlton, confirmed that the hotelier will not be building at Mountain Spa -- but added it was only a matter of time before a Ritz-Carlton comes to Las Vegas.

"Las Vegas is certainly a market we'd love to be a part of, and we're exploring other opportunities in that market," Taylor said. "We're actively looking at other areas in Las Vegas, and look forward to at some point in the future becoming a part of the Las Vegas area."

Nor will the end of the Ritz-Carlton plans mean the end of development at Mountain Spa, Christensen said.

"They're going to focus on the development of the home sites," Christensen said. "They'll be focusing on the golf course as well. So that's their first priority.

"The separation does not close the door on another resort property establishing a presence at Mountain Spa."

The Mountain Spa's principal owner is Jack Sommer, developer of the Aladdin hotel-casino on the Strip. But Christensen said the Ritz-Carlton pullout had "absolutely nothing to do with the Aladdin."

A local developer said Ritz-Carlton recently looked at a land parcel at the northwest corner of Harmon Avenue and Koval Lane, just east of the Strip.

"(Ritz-Carlton) has looked at a lot of different parcels in town," said Jim Shadlaus, partner in Richard Tam Enterprises, the owner of the 11.5-acre land parcel. "They stopped by to see us, but there was definitely nothing definitive signed. I would like to say it's definitive, but nothing's been formalized at all.

"There have been some discussions regarding this site, and hopefully they're still interested in that."

Though the land has been zoned for gaming, Shadlaus said Ritz-Carlton's interest is in a non-gaming development.

Tam had spoken to a number of companies, including Playboy Enterprises Inc., about using the land for a joint venture development. But following Tam's death last year, the focus has turned to selling the land outright.

"We're more interested in getting some cash realized out of the property," Shadlaus said.

Ritz-Carlton's 35 hotels are known for a level of luxury that exceeds all but one Las Vegas hotel. Hotels in its chain have been designated the best hotels in the United States, Mexico, the Caribbean and Australia by Travel & Leisure magazine. Twelve of 60 North American hotels designated "Five Diamond" hotels by the American Automobile Association are Ritz-Carltons.

All of Ritz-Carlton's remaining properties hold "Four Diamond" designations from AAA, a level matched by the Mirage, Treasure Island, the Bellagio, the Golden Nugget, the Desert Inn, Caesars Palace and the Las Vegas Hilton.

Opening a hotel in Las Vegas would allow Ritz-Carlton to counter moves made last year by two of its biggest competitors in the luxury hotel market -- The Four Seasons hotel chain and Regent International Hotels.

Four Seasons was the first to enter the Las Vegas market, opening a non-gaming property next to Mandalay Bay in 1999. To date, this is the only Las Vegas hotel to receive a "Five Diamond" designation from AAA.

Regent International quickly followed when Swiss Casinos of America opened the Resort at Summerlin last summer. Now called the Regent Las Vegas, the Regent name is on license from Regent International.

The termination of talks with Mountain Spa marks the second time plans to develop a Las Vegas Ritz-Carlton have been called off.

In 1996, MGM Grand Inc. began negotiations to place a non-gaming, 500-room Ritz-Carlton next to its flagship resort as part of its strategy to attract high-rollers to the MGM Grand. One year later, Marriott International Inc., parent company of Ritz-Carlton, struck a deal to develop a 1,500-room Marriott Marquis hotel on MGM Grand's property, while negotiations to build a Ritz-Carlton continued.

But the Marriott Marquis plans fell through early last year on concerns that the Las Vegas hotel market was becoming saturated.