City strikes deal for key parcel downtown

Erin Neff

Wednesday, June 28, 2000 | 10:53 a.m.

Las Vegas Mayor Oscar Goodman capped his first year in office Tuesday with the biggest news of the past 365 days.

The city announced it has reached a tentative agreement with Lehman Brothers Holdings Inc. to swap land at the city's technology park for Lehman's key 61-acre parcel downtown.

"In my opinion, it's the best piece of urban real estate in the world," Goodman said during a press conference to announce the deal. "It's the heart of the city, and it gives us the opportunity to realize dreams and concentrate our vision on making it a very special project.

Under the proposed land swap, Lehman will get 97 acres of Las Vegas Technology Center land at Smoke Ranch Road and Tenaya Way plus $2 million in cash in exchange for the downtown site.

The city-owned land was recently appraised by the city at $32.4 million. The Lehman site, which is between the Clark County Government Center and the Spaghetti Bowl, has been appraised at $48.3 million.

Under terms of the tentative agreement, both parties will now enter a period of due diligence to ensure each is getting a good deal and that no remaining environmental issues exist on a site once polluted and later cleaned by Union Pacific Railroad.

The City Council must still approve the agreement, and the deal will be forwarded to the City Centre Development Corp. board for its advisement. A final deal between the city and Lehman is expected Sept. 1.

Tuesday's announcement came almost six months after Goodman's inaugural State of the City address in which he named a downtown arena or performing arts center as an integral piece of his revitalization plans.

Goodman and other city council members gathered for the news conference didn't offer any specific plans for the downtown site.

"Our imaginations can run rampant at this time," Goodman said. "We can use whatever vision that we have to come up with what's best for the city.

"There's nothing planned for that property at this point in time. It's just ideas."

Those ideas can mean anything from an arena to a performing arts center to a casino, he said.

City Councilman Lawrence Weekly said he would prefer to steer away from a casino on the site.

"It would have to be really something different," Weekly said.

Lehman Brothers is a publicly traded global investment bank headquartered in New York. Its holdings division frequently invests in real estate, usually buying property in foreclosure and immediately selling it to developers.

Lehman purchased the downtown parcel in July 1998 after Texas entrepreneur Paul Tanner's plans for a domed stadium on the site fell through. It has held onto the land for an unusual two years at the request of city officials who have often viewed the parcel as an integral part of downtown's future success.

"It's a very good deal for the city," Goodman said. "Lehman is not in the real estate market, so we pressed."

Deputy City Manager Steve Houchens said the deal won't mean much more than a change in ownership for the Las Vegas Technology Center.

"Lehman's committed to continuing to develop the tech park," Houchens said.

The 97-acre center includes 71 undeveloped acres and several technology businesses.

The city's offer to UNLV of 12 acres for the university's development as a medical school still stands, Houchens said.

Tuesday's news also comes at a time when other downtown redevelopment efforts are picking up steam.

A pre-bid conference was held this morning for all contractors involved in the City Centre Place office tower and parking garage at Fourth Street and Lewis Avenue.

The $5.4 million parking garage is being built by the city as part of a private-public partnership. The Pauls Corp. of Aurora, Colo., is building an $8.3 million office tower.

Construction on the parking garage should begin this fall.

A new federal courthouse is nearly complete on Las Vegas Boulevard, and the new Regional Justice Center is under construction near Casino Center Boulevard and Clark Avenue.