Starwood in venture to build $1.7 billion LV project

Adam Goldman

Wednesday, Aug. 24, 2005 | 9:58 a.m.

LAS VEGAS -- Starwood Hotels & Resorts Worldwide Inc. intends to expand dramatically in Las Vegas, bringing its hip and urban W brand to one of the most competitive and coveted markets in the leisure industry.

Starwood is joining with Edge Resorts, a group of private investors, in a $1.7 billion project that will involve a mix of approximately 3,000 hotel and residential units and a 75,000-square-foot casino, along with 300,000 square feet of meeting space and additional shops. It's slated to open 2008.

Edge Resorts will control 75 percent of the project. Starwood, which is W's parent company, will own the remainder and manage the W Las Vegas hotel.

The project will sit on 21 acres located just east of the Las Vegas Strip, near the popular Hard Rock hotel-casino.

"The other properties will orbit around us," Ross Klein, senior vice president and chief marketing officer for W Hotels Worldwide, told The Associated Press in an interview Tuesday.

Klein said he has been trying to bring one of the sleek and modern hotels to Las Vegas since the launching of the first W in late 1998. Klein said W customers have wanted one in Las Vegas but he could never find the perfect location, partner, timing and scale.

"It was very important for us to go where our guests want to be," he said.

With Las Vegas gambling companies still churning out hefty profits, Klein said the market is "still red hot and white hot for innovation. W Las Vegas will definitely be a laboratory for a lot of what we are doing."

Klein said he expects the new resort to compete with the Hard Rock, Mandalay Bay, the Palms, Wynn Las Vegas and Four Seasons.

Deutsche Bank analyst Marc Falcone said it was important for W to finally land in Las Vegas.

"I think W needs exposure in Vegas given what the brand stands for," he said. "It's going to be a strong fit for Las Vegas. This is a very powerful location."

Edge Resorts investors Trevor Pearlman, Reagan Silber and Adam Frank said they weren't concerned about the glut of hotel-condo projects slated to be built in Las Vegas.

"The W brand is obviously one of the strongest names in the hospitality business," said Frank, Edge president. "The Vegas buyer of condos has become more savvy."

New York-based Starwood, one of the biggest hotel operators in the world, is also part of a group of investors that bought the Aladdin megaresort on the Strip. It also owns the Westin Casuarina in Las Vegas.