New firm in line for Union Park project

Dan Kulin

Friday, Dec. 16, 2005 | 9:47 a.m.

The future development of Las Vegas' 61 acres downtown is poised to make significant progress -- at least on paper -- at next Wednesday's City Council meeting.

The council will be asked to hire San Diego-based development company Newland Communities to oversee plans for Union Park, the working name for the proposed development on the western edge of downtown.

Part of the proposed contract would give the company the right to buy up to 7.6 acres of the 61 acres for appraised market value in return for starting construction on at least one building within three years.

The contract also states that if a professional sports team is not negotiating with the city for a new stadium on the 61 acres within a year, then the 18 acres set aside in the plan for a stadium would be made available for other development.

"We're either going to have serious talks with a baseball team or they can go to other land," Mayor Oscar Goodman said. He refused to say whether he has had recent discussions with any baseball officials.

The council also is expected to vote on measures to formally approve an agreement that will lead to construction of a performing arts center on the land; OK a plan for streets, utilities and parking on the 61 acres, and borrow the $40 million that those infrastructure improvements are expected to cost.

The Newland contract calls for Dan Van Epp, Newland's regional vice president and former president of the Howard Hughes Corp., to oversee his company's work on Union Park.

Van Epp has been one of a group of local business leaders advising Goodman on the development for more than a year. In October, Goodman said city leaders were trying to bring Van Epp into the fold as an official agent for the city.

The mayor said Van Epp and Newland are especially qualified for this role.

"They believe in the project, and Dan Van Epp has been by my side since the beginning," Goodman said.

In the proposed deal with Newland, the mayor would receive something he could not from The Related Cos., the firm once in the running to spearhead the project -- a commitment to start construction within several years.

Van Epp said his company would probably build 10- to 30-story high-rises with retail on the ground floor and condominiums or apartments above. He said it was still too early to say exactly what might be built first.

Related and city officials talked for roughly a year about the company becoming the master developer of Union Park, but parted ways in October when Related would not commit to starting construction within a specific time frame.

Goodman said that while he does not want to rush development on the 61 acres -- "This is the tortoise, not the hare," he said -- he does want some certainty that development will come.

Another part of the Newland contract would require that at least three privately owned buildings be finished, and five blocks of the 61 acres be in private hands within five years.

In return, Newland would be able to buy four centrally located blocks -- 7.6 acres in total -- at the appraised market value. The 7.6 acres is divided into four blocks of land, and the appraisals would occur when Newland purchased them. The purchases would be subject to new agreements that would tie the company to a construction timeline so the firm could not buy the land and let it sit idle indefinitely.

The company would be reimbursed, through discounts on the property it buys or money from other land sales, for expenses related to acting as Union Park's master developer.

Newland also would receive 4 percent commission from sales that it brokers.

If Newland fails to deliver on its requirements, the company would lose its exclusive right to the 7.6 acres and would not be allowed to extend its management contract past five years.

Next Wednesday, Goodman said, "will be the day we declare at least paper success" on the long-in-the-making 61 acres project. The next big hurdle, he said, will be "finding the space for all the people that want to come" to build on the 61 acres.

In addition to the Newland contract, the council is expected to vote on a development and operating agreement that would solidify the performing arts center's standing as a centerpiece of the 61 acres.

Plans for the proposed Fred W. and Mary B. Smith Center for the Performing Arts now are operating under a memorandum of understanding with the city.

Under the proposed agreement, the performing arts center would lease 4.25 acres from the city for $1 annually for 99 years, and the city would commit to paying up to $2.2 million to remove contaminants from the soil and groundwater.

The city also would be responsible for providing at least 1,400 parking spaces for the performing arts center.

"In many ways it's paperwork and finalizing a deal," said performing arts center foundation President Myron Martin. "But it is truly significant. The finalizing of the operation and lease agreement clears up any questions of what we're doing and how we're doing it."

The $150-million to $175-million center is being funded in part by a portion of the rental car tax.

A preliminary plan calls for putting a 2,100-space parking lot on the southern third of the property. Eventually, that land is planned to be home to an academic medical center and privately held buildings.

Under the proposed contract with Newland, if plans for an academic medical center do not come about within five years, a new idea for that property would be developed.

City Director of Business Development Scott Adams said the infrastructure work would be coordinated with building construction on the 61 acres.

"There's a possibility of getting something started in '06," Adams said.

In the meantime, the planned $50-million Lou Ruvo Alzheimer's Institute is expected to break ground next August.

"The important thing we're doing is we're still moving forward with the 61 acres," Adams said. "When we terminated negotiations with Related, there were some concerns about us going forward with the master plan. This says nothing's changed."

Dan Kulin can be reached at 259-8826 or at dan@lasvegassun.com.