Bennett seeks $65 million for key Strip parcel

David Strow

Friday, May 26, 2000 | 11:07 a.m.

A long-vacant 26-acre land parcel near the Sahara hotel-casino has been put back up for sale by Sahara owner Bill Bennett, as the casino legend tries to cash in on growing interest in the north end of the Strip.

Bennett is seeking $65 million for the land parcel, located at the southwest corner of the Strip and Sahara Avenue. Sahara officials say their top choice is to have a gaming resort developed next door.

"We want anything that will help create critical mass," said John McManus, general counsel for the Sahara. "It's better having a competitor down the street than 2 miles down the road."

CB Richard Ellis of Southern Nevada is the brokerage handling the marketing of the property.

John Knott, managing director for CB Richard Ellis of Southern Nevada, said the value of the land is being boosted by such projects as Steve Wynn's purchase of the Desert Inn, the recent purchase of the El Rancho by Turnberry Associates, the planned new resort at the site of the Frontier and financier Carl Icahn's expansion of the Stratosphere.

"The north end of the Strip is kind of evolving," Knott said. "Land prices on some parts of the Strip go for $10, $11 million an acre. So the north end of the Strip appears to be a pretty good value.

"I think you're starting to see some dollars invested in the north end of the Strip. As it moves forward, MGM and Harrah's and Park Place may want to take a stake in having a chance to participate in the north end of the Strip."

But CB Richard Ellis also plans to contact international companies as well, a move that could result in an entirely new operator setting up shop on the Strip, said Kevin Higgins, senior vice president of CB Richard Ellis.

The asking price for the property is $2.5 million per acre, compared to the $2.15 million per acre paid by Turnberry for the 21-acre El Rancho property.

However, Knott said, "this is a corner location. Sahara is one of the heavily traveled east-west corridors. El Rancho is more in the middle (of the north Strip).

"You have to drive past this property to get to the El Rancho."

The parcel was the home of the El Rancho Vegas, the Strip's first resort property, opened in 1941. The El Rancho Vegas was destroyed by fire in 1960.

Bennett acquired the land parcel in 1995 from Howard Hughes Corp., then quietly began trying to resell the property. He struck a deal in 1998 to sell the land to a group that included Beverly Hills developer Barry Schlesinger and Billy Bob Barnett, owner of the Cat's Meow restaurant in New Orleans. The group envisioned a 2,000 room hotel-casino at the site, with plans to incorporate a Billy Bob's Western nightclub into the complex.

But these plans fell apart late last year, after the group failed to secure financing. That led Bennett and the Sahara to take a more aggressive approach in selling the property.

"Everything's moving in our direction now," McManus said. "In our opinion, the market has improved, its value has gone up. Now is the time to get it out there (on the market), get a competitive bidding process.

"We'll look at what's going to be developed (on the site). We want something that complements the Sahara."

The Sahara's confidence in the increasing value of the Strip's north end is reflected in its increased price -- several years ago, the Sahara asked for about $55 million for the entire vacant parcel, which spans 39 acres.

But 13 acres of this land parcel is already under contract.

The largest block under contract so far is a 10-acre parcel located adjacent to Circus Circus, placed under contract by Hilton Hotels Corp.'s Hilton Grand Vacations. Though Hilton hasn't revealed its plans for the parcel, sources say the company plans a timeshare high-rise at the site.

Another three acres have been placed under contract by a separate company, but McManus declined to identify the buyer.