Diamond Resorts plans Strip timeshare project

David Strow and Richard N. Velotta

Friday, Feb. 15, 2002 | 11:12 a.m.

Timeshare developer Diamond Resorts International announced plans Thursday to build a 30-story, $240 million themed timeshare resort on the south end of the Las Vegas Strip.

Construction on "the Chateau," a four-tower, 850-unit complex, should begin sometime in 2004, with completion of the first tower in 2005, company President Stephen Cloobeck said.

The French-themed timeshare will be built north of Polo Towers, a 10-year-old complex located between Harmon and Tropicana avenues on the Las Vegas Strip. Like Polo Towers and the Jockey Club, the company's other timeshare development, the Chateau will not have gaming.

The third and final tower in the Polo Towers complex opened in 2000, and about 45 percent of the units in that tower have been sold.

"We've already met with our lenders, and they've given us no indication financing will be a problem when the time comes," Cloobeck said.

Despite a Las Vegas-wide slowdown following Sept. 11, Cloobeck said business at the company's Las Vegas holdings is recovering, giving him confidence to proceed.

"I don't think (business) is back to where we were a year ago," Cloobeck said. "Our efficiencies are better, our tour flow is still a little off. But in our business, we do uniquely well during recessionary times, because it's a vacation hedge for the consumer. This is a long-term investment for people."

The president of the American Resort Development Association said he expects there will be demand for the project.

Howard Nusbaum, president and chief executive officer of Washington-based ARDA, said today that even after the economic downturn of 2001 and the terrorist attacks, the timeshare industry nationwide is growing at a 6 percent clip. In the 1990s, the industry had year-over-year growth of 12-15 percent.

"It's a very site-specific industry and timeshare has been very popular in Las Vegas," Nusbaum said. "There are a number of operators with product in that market and Diamond Resorts International has a good reputation with its previous projects."

Timeshare as an industry has grown in the last 10 years because the products have become more diverse, Nusbaum said.

Timeshare units are being marketed to customers in a broad range of incomes, with Las Vegas properties being offered from middle-income to high-end buyers.

Nusbaum said timeshare ownership has grown because developers aren't just selling specific weeks anymore.

"Timeshare today is a highly flexible product," Nusbaum said. "You can often buy floating time and trade it for properties around the world."

The industry also has grown as the result of the credibility of brand-name hotel companies like Marriott and Ritz Carlton offering timeshare products, he said.

ARDA reported $4 billion in sales in 2001 and said there were 3 million timeshare owners in the United States and 5 million worldwide at the end of the year.

A Las Vegas Strip location would be very appealing to buyers, Nusbaum said, because the it's such an attractive place to vacation and Californians lead the nation in timeshare ownership with about 300,000 units purchased.

Over the past five years, about 30 percent of Las Vegas' visitors have come from California, the Las Vegas Convention and Visitors Authority said.

Cloobeck's project will be designed by Las Vegas architecture firm Bergman Walls, designer of Paris Las Vegas.

"I'm in love with the south of France, and Chateau means home away from home," Cloobeck said. "We're very confident and comfortable with our plans, and we're very excited."