Many out of luck if arena site heads south

By Joe Schoenmann (contact)

Wednesday, April 23, 2008 | 2 a.m.

Rita Martin certainly didn’t start spending money she didn’t have in her hands yet when she joined dozens of downtown Las Vegas property owners who signed an agreement last year to sell their property to a would-be arena developer.

But now that it appears doubtful there will ever be an arena where her store, Swim-In Pool Supply, stands at 1314 Main St. — at least not in the foreseeable future — she’s a little perturbed.

“So this place is practically doomed,” Martin said Tuesday, speaking of the area.

That gloomy prophesy is based on fact, because if a downtown arena gets built, there are growing signs it would be closer to the Stratosphere — and farther from Swim-In Pool Supply.

Under plans submitted to the city by REI Neon last summer, an arena was to be completed in 2011 on the southwest corner of Main Street and Charleston Boulevard. That’s about two blocks from Martin’s store.

Now it’s more likely to be built nearer to the Stratosphere, because REI’s new arena partner, The Cordish Co., has close ties to Goldman Sachs & Co., which purchased the casino last April.

Another factor in the shift of potential sites, officials close to the arena talks say, is that some downtown property owners were seeking sale prices two to three times their land’s value. By reaching for a big financial score, they may have overplayed their hand.

Clark County assessor records show that W2007 Stratosphere Propco LLC and Goldman Sachs own about 10 acres directly north of the towering casino on Main Street.

So although Martin’s store would have been in a prime location for REI Neon’s $10.5 billion condo, casino, retail and office space project, she’s about three-quarters of a mile from the Stratosphere.

And that means the check for her land is not in the mail.

Last week, Mayor Oscar Goodman said he planned to meet today with the project’s developers. He dismissed an April 17 deadline set in February by the City Council for arena developers to work out final details with the city, stressing that working out a deal was “not an easy situation.”

“We’re dealing with Goldman Sachs, we’re dealing with REI, we’re dealing with The Cordish Co.,” he said. “And we’re making some progress. These deadlines are pyrrhic deadlines, for all intents and purposes, because of the changing economic market.”

Robert Reel, the broker whose TR Las Vegas company persuaded many downtown parcel owners to sign land sale agreements if a buyer came through, could not be reached for comment Tuesday. Jon Weaver, REI Group president, also could not be reached for comment.

But Wes Myles, who optioned his properties directly to REI Neon, not TR Las Vegas, didn’t mince words about how he thinks landowners were convinced they would get much more money than their land was worth.

“If the property owners would lose the idea, because it’s not real, that God is going to buy the property for way over what it’s worth, and forget all the stuff they were told, then it could sell,” Myles said.

Asking prices for the downtown acreage were as high as $12 million per acre, Myles said. A more reasonable price, he said, would be $4.5 million to $5 million per acre.

“At that price, people would buy them very quickly,” he said. “But they’ve all been led to believe they can get so much more. I’m telling you, it’s going to be an eternity before that happens.”

Myles is so certain no landowner will be convinced of that soon that he’s putting together plans to turn one of his Main Street properties into an art-based “very cool bar.” That property is about a block from Martin’s pool supply store.

“I’m not really worried, one way or the other,” Martin said. “Whether there’s going to be anyone coming in to buy it, I’m not anxious for any of it. I just wish someone would get back to us and tell us what’s going on.”