Downtown office building project gets extension

Erin Neff

Wednesday, Jan. 19, 2000 | 11:08 a.m.

A planned office building downtown was granted an extension to an exclusive development contract Tuesday in hopes that the once-scrapped project can compete with another building sweetened by city subsidies.

The Trenton Group won hesitant approval from the City Centre Development Corp. to extend its exclusive rights for another 90 days to develop a parcel at Clark Avenue and Las Vegas Boulevard.

Board members Ken Templeton and Peter Thomas approved the agreement, while George Kunz voted against the extension. President Jodi Goodheart and board member Nick Niarchos both abstained because of conflicts of interest.

"We are paying cash for our land and our parking structure," Trenton Group representative Kevin Buckley said while requesting the extension.

His comments were a less-than-veiled reference to the Pauls Corp.'s plans for an office tower at Fourth Street and Lewis Avenue. That Colorado-based company's project comes before the city's Redevelopment Agency today amid concerns that it is receiving an unfair amount of city help.

The Trenton Group announced last month that its anchor tenant law firm had decided to move to a building outside downtown. With the loss of its prime tenant, developers told the City Centre board they didn't think a 72,000-square-foot office building could be totally pre-leased.

At the time, board members told the Trenton Group it still had until Jan. 20 to make sure all of its options were exhausted before throwing in the towel.

But on Tuesday, when the Trenton Group announced it had intended leases for 45 percent of the building and a potential tenant for another 25 percent, the board was suddenly less accommodating.

"There's at least one other interested party at that site," Thomas said.

That developer, which was not named, reportedly has the ability to pre-lease the entire building. City Centre officials said they did not want to approve an office project simply on speculation.

The Trenton Group said an extension would allow them to secure pre-leasing for about 75 percent of the space.

"I still have some concern that who you're going after is the same people the others are going after," Thomas said, referring to the Pauls Corp.'s leasing efforts.

Thomas even asked Pauls Corp.'s regional leasing director to discuss the impact the Trenton Group's plans would have on his efforts.

"Obviously any time you're going after a very small market like we are downtown, it's difficult," said John McKeown of Pauls Corp. "We're always concerned about more competition."

The city has almost $12 million in subsidies in the Pauls Corp. project -- an amount some believe competitor Opus West felt was unfairly tipping the scales toward Pauls. Opus pulled out of a planned office project on the Union Pacific Railroad site in December.

The proposed agreement between the city and Pauls calls for the city to construct and operate a 580-space parking garage on the site. Revenue from the garage would be the city's, but the parking garage is estimated to cost between $6 million and $7 million.

The city will also get less money for the land than originally proposed under terms of the agreement. Pauls would pay $1.1 million of the original $1.5 million amount.

The city purchased the site for $6.4 million and spent another $700,000 preparing it when the Sun Plaza was proposed. That office tower, planned by American Nevada Corp. and Nevada State Bank, fell through in March 1999.

American Nevada Corp. is owned by the Greenspun family, which owns the Las Vegas Sun.

Templeton said he wanted to give the Trenton Group as much of a chance as possible. He downplayed other board members' concerns about overbuilding downtown by referencing a market study conducted last year. That study, by Keyser Marston and Associates Inc., suggested downtown could support 360,000 square feet of new office space.

"I think it's fair to give them an opportunity to try to get it built," Templeton said.

Kunz objected to the extension because he said it sets a precedent.

"It's a little bigger issue that just one building," he said. "It's about how we treat all developers downtown."

The Trenton Group will now have until mid-April to pre-lease its building. The Trenton Group would purchase the land from the city for $900,000 and build a 216-space parking garage at the site, per the preliminary agreement.