Bennett pulls prime Strip property off the market

Thursday, Oct. 17, 2002 | 11:20 a.m.

Investors who might have been interested in buying one of the last major parcels of vacant land on the Las Vegas Strip may have to wait -- at least for now.

Bill Bennett, owner of the Sahara Hotel and Casino in Las Vegas, has taken a long-vacant 26-acre parcel he owns across from the Sahara off the market.

Potential revitalization of the Strip's north end -- including Steve Wynn's $2.4 billion Le Reve as well as other projects on the drawing board -- will likely push land prices upward, a representative for Bennett said Wednesday.

The parcel is a "premier piece of vacant land on the Strip," said Matt McCaughey, general counsel for the Sahara hotel-casino. "It's only going to go up in value."

Bennett will still consider "reasonable" offers for the property but won't actively market it to investors, McCaughey said.

"We think Mr. Bennett is wise to remove the property from the market at this time," said Carlton Geer, director of CB Richard Ellis' Global Gaming Group in Las Vegas. Commercial broker CB Richard Ellis had been marketing the land for Bennett for several years.

"CB Richard Ellis has always had complete confidence in this as a terrific gaming site for a number of reasons, including the fact that it's one of the last remaining parcels for potential casino sites on the Strip," Geer said.

"We've always felt the property was an extraordinary value at $65 million and we think the dynamics of the north Las Vegas Strip are going to change significantly" over the next several years, he said.

Le Reve, as well as several projects planned at the site of the New Frontier hotel-casino, will boost the region's outlook, he said.

Lack of financing is also stalling real estate deals, said Jack Carr, a managing director for the hotel division of Insignia ESG, a commercial broker that does business in Las Vegas.

"It's difficult to get anything financed in Las Vegas right now, regardless of whether the project makes sense," he said. "The timing's just not right" for new casino projects, he added.

Analysts and other market observers appear to be divided on how successful Wynn's company will be in obtaining financing. Some cite the resort pioneer's string of past successes, while others say difficult capital markets are making it hard for everyone to obtain reasonable interest rates. Wynn kicked off an investor roadshow this month to promote an initial public stock offering to help finance the casino. A Wynn Resorts subsidiary will also offer mortgage bonds and obtain bank credit.

Bennett had set a price of $65 million, or roughly $2.5 million per acre, for the parcel more than two years ago.

The land has been marketed on and off over the years as various potential buyers have surfaced and then backed off.

He struck a deal in 1998 to sell the land to a group that included Beverly Hills developer Barry Schlesinger and New Orleans restaurant owner Billy Bob Barnett. The duo envisioned a 2,000-room hotel-casino and Western-theme nightclub at the site, but plans fell apart in 1999 after they failed to secure financing.

In 1996, agents claiming to represent the Sultan of Brunei -- then considered the richest man in the world -- presented an offer to Bennett to purchase the land. The supposed intermediaries apparently acted without the Sultan's knowledge, prompting the ruler of the tiny, oil-rich nation to cancel the transaction.

Bennett's Gordon Gaming Corp. bought the roughly 40-acre parcel from the Howard Hughes Corp. in 1995 -- the same year Bennett bought the Sahara. He then canceled a lease on the parcel by St. Andrews Golf Co., which planned to build a high-tech golf driving range and baseball park, and began to sell it. In 2000, Hilton Hotels Corp. bought up a portion of the land to build a timeshare complex that is now under construction.