Starwood announces $1.7 billion LV project

By Liz Benston

Wednesday, Aug. 24, 2005 | 11:06 a.m.

Hotel giant Starwood Hotels will bring its first W hotel to Las Vegas as part of a $1.7 billion casino resort at the northeast corner of Harmon Avenue and Koval Lane.

The 3,000-room property will feature a mix of hotel, condo-hotel and residential units in addition to a 75,000 square-foot casino, retail space, 300,000 square feet of meeting space, a gym and a spa. The property will be Starwood's first W hotel with a casino.

Residences will include poolside cabanas, studios, one and two-bedroom condos and will start at $550,000. Sales are expected to begin in the fourth quarter of this year.

The project will be developed in partnership with Edge Resorts, a group of investors including Trevor Pearlman, Reagan Silber and Adam Frank. Edge Resorts will own 75 percent of the venture and Starwood will own the remainder and manage the hotel.

Silber and his partners first purchased the 2 acres of land under the Ice nightclub at the intersection of Harmon and Koval last year and recently picked up 19 surrounding acres from homebuilder D.R. Horton. The total cost of the 21 acres is $108.2 million, Starwood said.

D.R. Horton intends to build about 1,400 condos on roughly 14 acres of land it still owns behind the Starwood parcel.

About 100 condos per acre will be built on the site and the buildings will be 20 stories or less, confirmed Jim Frasure, D.R. Horton division president.

Prices have not yet been set. The project will complement the W's condominium development, Frasure said.

"We won't compete with them on a price basis," he said.

The Edge Resort partners have been working on a Las Vegas deal for several months. They formerly owned the Bourbon Street hotel and casino, which was sold to Harrah's Entertainment Inc. in March.

"We called (Starwood) when we owned the Bourbon Street and asked them to come take a look. We thought Vegas needed a W," Silber said. "They didn't love the Bourbon Street property. They said wasn't big enough and it just wasn't the right location."

Starwood instead set its sights on the Harmon corridor -- the site of several future condominium projects including a $1 billion condo-hotel development at the nearby Hard Rock hotel and casino.

"They saw what was happening on Harmon before we did," Silber said. "They liked us, liked the relationship ... and said they wanted to be on Harmon. We went back to them when we had the land."

The W brand is a perfect fit for Las Vegas, Silber said.

"It was very clear that the most exciting, biggest opportunity was for that broad space between the Palms and Hard Rock on the one hand and Bellagio and Wynn on the other hand," he said. "We believed there was a massive space the W could fill blending the young hip and cool with a luxury lifestyle."

The first W hotel opened in New York in December 1998. There are now five hotels in New York and 20 other hotels worldwide.

The project is the latest Las Vegas project for White Plains, N.Y.-based Starwood Hotels and Resorts Worldwide Inc. The company exited the gaming business years ago when it sold Caesars Palace and Desert Inn resorts in Las Vegas but has returned in recent years since Las Vegas has transformed itself into a luxury resort destination and has attracted several nongaming, luxury hotels. Starwood is managing the hotel at the Aladdin resort, which is soon to adopt the Planet Hollywood brand, and is looking at other sites in Las Vegas for development.

A Starwood spokeswoman said the company is still working on the hotel's design and could offer few other details about the resort.

"Las Vegas is like no other city in the world and has been on the top of W's development strategy for years," Ross Klein, Chief Marketing Officer for W hotels worldwide, said in a statement. "The W Las Vegas will offer guests extraordinary experiences at every turn through the brand's lifestyle elements -- provocative spaces, delightful indulgences and experiential surprises that will be unheard of even by Las Vegas' standards."