Office tower encounters neighbors’ resistance

Jennifer Shubinski

Wednesday, Oct. 27, 2004 | 10:45 a.m.

Crescent Real Estate Equities, the new owner of the upscale Hughes Center office park, has run into problems for future development plans, but this time it's not the cost of land or development -- it's the neighbors.

Fort Worth, Texas-based Crescent has been public about its evolving plans for two high-rise office towers since it bought Hughes Center, at Flamingo and Paradise roads, last year from the Rouse Co.

The Hughes Center is known as the premier office park in Las Vegas and is anchored by the 18-story, 259,000-square-foot Wells Fargo tower at 3800 Howard Hughes Parkway.

It also is home to Park Towers, two 20-story condo towers, with a total of 84 luxury condominiums that are first and second homes to area doctors, developers and casino owners.

But homeowners said Crescent's plans are too much for the seven-acre site and will only add to congestion in the area. They also said the new owners should stick to the master plan and honor the Howard Hughes Corp.'s previously approved plans that call for much smaller buildings. Howard Hughes is an affiliate of Rouse.

Crescent's original plans called for the first phase to include a 13-story, 290,000-square-foot building with a restaurant with live entertainment on the top floor, and a seven-story parking garage. The second phase is a proposed 11-story, 275,000-square-foot building and eight-story parking garage.

If built, the new buildings would increase the size of the existing 1.1 million-square-foot office park -- spread out on almost 100 acres -- by more than 50 percent.

"It's a question of equity for some. For some that look at this, it's like fitting 10 pounds into a 5 pound bag," said Richard Worthington, Park Towers homeowner association secretary. "I'm pro-development, but this is way too much density and intensity of development."

Worthington also is president of the Molasky Group of Cos., a long-time local developer of offices and apartments as well as Park Towers.

Worthington said residents spent millions of dollars for condos based on the original Hughes Center master plan. He said the original plan was for two, seven-story buildings each about 175,000 square feet.

Permits for those office buildings were pulled by Howard Hughes in April 2001, Worthington said. Park Towers had its grand opening in June 2001.

"People did their due diligence and spent millions (on a condo). When is a plan a plan?" Worthington said.

In response to homeowner concerns raised at a meeting hosted by Crescent, the company as said it will alter its plans for the first phase, lowering the building by a floor, lowering the parking garage to six stories, and eliminating the restaurant and entertainment.

The size of the building dropped from 290,000 square feet to 274,000 square feet, said Jane Page, senior vice president, asset management and leasing in Crescent's Houston region, which includes Las Vegas.

Phase two remained relatively untouched, but the second parking garage was lowered to six floors as well, Page said.

Crescent also detailed plans for more greenery and trees between the parking garage and Park Towers. The company would have to ask the county for a variance to allow for lower parking ratios, she said.

Page said Crescent also hired a company to study the neighborhood's traffic, which is compounded by the Strip just blocks to the west and the Las Vegas Convention Center to the north.

"At our first meeting, we introduced who we were, a little about our projects around the country, let them get comfortable that we are a long-term holder of real estate," she said. "We told them what our philosophy is, presented the project, and listened specifically to their concerns."

The company again met with Park Towers' residents to explain the changes to the building and the site.

"I think some of the residents were very positive about the changes we made," she said. "But at the end of the meeting Richard Worthington said they were not happy with anything other than what Howard Hughes (Corp.) had been given in their permit."

Page said it doesn't make economic sense for Crescent to go back to Howard Hughes' shorter buildings.

"We feel like what we're doing, it makes good business sense, good sense for the Hughes Center, and it makes good sense that Las Vegas meets the needs of existing customers and the needs of new customers coming in," she said.

Worthington, who said he was nominated to speak on behalf of the homeowners, said it comes down to plans that were never on the drawing board and should not be allowed. He also said, as a developer, the company's rationale that it wouldn't make sense to build smaller buildings doesn't add up.

"What they're saying is they're valuing the land, that it doesn't pay to use such an expensive piece of dirt," Worthington said.

The total price of the Hughes Center was $223 million -- $126 million in cash and $97 million in assumed debt. Crescent also acquired the undeveloped land within Hughes Center from Rouse for an additional $10 million.

Worthington said while the office buildings are attractive, they are too massive for the area.

"It needs to be on scale, for (the parking garage) to be eight stories and then to lob one story off, it's still twice the size of everything in the neighborhood," Worthington said. "It's a vast departure of what was approved for that site."

He also stressed that traffic has become an increasing problem on Howard Hughes Parkway, which splits the office park and connects Flamingo and Paradise. People are using the road, which has two lanes per side, as a cut-through to avoid traffic. Page said Crescent will comply with whatever requirements a county traffic study requires.

Worthington said congestion will only get worse as new Strip casinos open and if Crescent is allowed to proceed with its buildings as planned.

Page said despite continued homeowner concerns, the company has attempted to work with residents, and will appear before the Paradise Town Board Nov. 9, after postponing an appearance three times. It will then go before the Clark County Planning Commission on Nov. 18, followed by the Clark County Commission for final approval.

She said because of the delay Crescent doesn't expect to finish with phase one of the expansion until the fourth quarter of 2006.

Page said Hughes Center is 98 percent leased and that the expansion is needed to continue the vitality of the office park. She said the company already has customers on a waiting list for the new buildings.

"I hope that the business community can see that this is very positive for the city," she said. "To continue to keep pace with population growth and services and needs, the business community will see that this is necessary to keep pace."

This is not the first high-rise development project Park Towers residents have opposed.

Last year, the condo's homeowner association opposed a 185-foot condo tower at Koval Lane and Albert Avenue. Plans for the tower were approved, but several Park Towers homeowners filed suit against the developer and that case is ongoing, Worthington said.

He said Park Towers residents have hired an attorney to represent the group and voice its concerns.