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December 18, 2014

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Hard times dash high hopes for downtown’s Streamline Tower

In a cautionary tale of the downturn, Streamline goes from swank to repossessed to bargain-basement

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Steve Marcus

Streamline Tower near Fremont Street at Las Vegas Boulevard North once held promise as a key to revitalizing downtown. Ground was broken in 2004, before any hint of a downturn, and it opened in 2008 as the housing market was collapsing. Now the bank that took it over is laying the groundwork for an eventual sale.

Once touted as a sign of a resurgent downtown Las Vegas, the Streamline Tower has since become a symbol of how the economic downturn has hurt efforts to revitalize the area.

This year, after the owners filed for bankruptcy protection, the bank that funded most of the of the tower’s construction, Chicago-based Corus Bank, took possession. And now, according to local businessmen and city officials, the bank is starting to put out feelers for buyers, who are floating bids that are a fraction of the original $205 million cost of the property near Fremont Street casinos and Las Vegas City Hall.

A bank spokesman could not be reached, but those who confirmed at least a possible interest in the property include the Molasky Group and Rohit Joshi, who represents the owner of nearby Neonopolis.

According to Joshi, the appraised value of Streamline is now $30 million to $35 million.

“The Streamline is a great asset, and the price has come down extremely low,” he said.

He added that Corus has not put the property on the market, so talk of a sale is premature.

Molasky President Rich Worthington confirmed that his company had expressed interest in the property. Molasky and the bank had a significantly different “expectation of value,” he said, so no deal could be reached.

Corus Bank issued $104 million to get the Streamline built. Developers broke ground in 2004, and the property opened its doors on May 1, 2008.

According to city officials and former Streamline employees, Corus Bank — or a purchaser of the tower — has a number of options. The owners could try to maintain it as a condo and hope sales improve as the economy rebounds. Or they could market it as apartments, or even a hotel, to gain immediate cash flow.

“If a bank is smart it would want to evaluate all of its options,” said Scott Adams, the city’s chief urban redevelopment officer.

Adams said the condo’s struggles are unfortunate but couldn’t be avoided given the timing of the building’s opening.

Other downtown condo projects have had difficulty selling units because of the soft real estate market and tough credit market that have driven the recession. The economy has also slowed the pace of other redevelopment projects.

Since it opened, the Streamline has had difficulty selling its 275 units. As of about a year ago, a condo official said just 57 percent of the units had been sold, and only 27 of the sales had closed.

The condo’s woes worsened in October, when 48 irritated buyers filed a federal suit against Streamline and another company, claiming the units they purchased were smaller than advertised, and that Streamline falsely promised that buyers could profit by placing their units in a leasing program.

Set back from Fremont Street to its south, the Streamline is bordered by Ogden Avenue on the north, Las Vegas Boulevard North to the west and the El Cortez to the east.

It’s a swank property that offers such amenities as units with designer touches and a rooftop pool with views of the Stratosphere and Strip hotels.

According to Susan Allen — the former sales director whose husband, Dusty Allen, was one a half-dozen investors who originally developed the property — the building is still operational, with security officers and homeowners association representatives monitoring the site.

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