New motto for Las Vegas Sands: Let no space go to waste

By Liz Benston (contact)

Friday, March 14, 2008 | 2 a.m.

In New York, developers commonly shoehorn buildings into odd places, erecting them atop or in front of existing structures.

Las Vegas is cultivating its own shoehorn specialist in Las Vegas Sands, which continues building its casino empire on the Strip even though it has only a few acres of land.

The company’s connected Venetian and Palazzo resorts already constitute the world’s largest casino resort and convention complex. Now the tightly packed southeast corner of Sands Avenue and Las Vegas Boulevard is getting yet another addition. Four hundred luxury condo units are under construction above a building that is to contain a Walgreens and other stores.

The structure, which will be integrated into the Palazzo, is to open next year on less than an acre between the Venetian and the Palazzo.

That land is the former home of the Rosewood Grille, a restaurant that has been a sore point for Venetian executives over the years. They wanted to buy it but the owners, who planned to build a shopping center on the site, were unwilling to part with it. Las Vegas Sands and the landowners have reached an airspace agreement so the condo and the shopping center can be built above separate ground-floor tenants.

Air rights are common in New York and other dense cities. But they are new to Las Vegas. The county has approved the Walgreens and the condo, but few details have emerged.

Las Vegas Sands executives couldn’t be reached for comment.

Company executives told representatives of Wall Street firms at a private meeting last month that the company hoped to sell the units for up to $2,000 per square foot — more than the prices for many on the Strip but in the range of what MGM Mirage is charging buyers at CityCenter.

The housing slump has hurt demand for condos in Las Vegas. But Sands executives are betting that a weak dollar and the Venetian’s growing brand equity in China will help the company sell condos to Asian buyers — the kind of high-rolling customers who are spending money at the company’s resorts in Macau and Las Vegas.

According to an investor pitch circulated by VV Ventures, which claims to be operating food and beverage venues for the Rosewood Grille parcel, the tenants are expected to include a spa, a nightclub run by London club operator Marc Merran of the Movida Group and restaurants offering catering by French chef Jean-Georges Vongerichten’s Culinary Concepts.

The information on tenants was first published by The Vegas Eye, a blog run by the publisher of Las Vegas Food & Beverage magazine.

Analysts say resort amenities in the condo building are expected to be available for condo residents and guests rather than the public.

But that’s not all that could be in store for the corner.

In a separate plan that would make even the most aggressive of New York’s high-rise developers gulp, Las Vegas Sands has contemplated building a third resort in place of or above the Sands Expo Center, which sits along Sands Avenue near Las Vegas Boulevard.

This third resort could be as big as, if not bigger than, the Venetian or the Palazzo, with an equally large retail center and all of the requisite top-shelf amenities.

These plans have cropped up in discussions with Wall Street firms eager to see the company maximize its profit on land that, while mostly developed, has not yet reached New York standards. The company already has county approval to build a second convention center for which it does have enough land — 18 acres. But the site is behind a Wynn Resorts parking garage, which presents a space challenge of another kind: How do you get conventiongoers to walk around the Wynn parking garage and into your resorts on the Strip? The Sands is considering a people-mover of sorts to bypass the parking garage.

Experts say the second convention center would allow the company to build a more profitable resort at the Sands site, or at least use some of the Sands site for a resort.