The Harmon Corridor

From the Las Vegas Review Journal.....

More than $20 billion is being invested in development along the burgeoning Harmon Avenue corridor, which is rapidly becoming the hip hangout off the Strip.

The 3-mile Harmon corridor will be anchored by the Hard Rock Hotel and University of Nevada, Las Vegas on the east end and the Palms on the west end, once Clark County Public Works builds an interchange at Valley View Boulevard linking Harmon to Flamingo Road.

Among major projects in planning or under construction along Harmon are MGM Mirage's Project CityCenter, the Hard Rock expansion, a W hotel from Starwood Resorts, the Chateau time share by Marriott, Panorama Towers, Turnberry's condominium-hotel at the MGM Grand and the Cosmopolitan hotel-casino.

Los Angeles developer Richard Alter bought Alexis Park and is spending $500 million to renovate it as a gaming property. MetroFlag, led by Las Vegas developer Brett Torino, plans to build two 55-story luxury residential and hotel towers where the Harley-Davidson Caf sits at the corner of Harmon and the Strip.

Las Vegas-based Centra Properties, which is developing the 100-acre Town Square mixed-use project with Turnberry Associates on Las Vegas Boulevard South, recently formed a joint venture with The Related Cos. to buy and develop a 25-acre site on Harmon that's now home for the 1,000-unit Harbor Island apartments. The companies reportedly spent $85 million to acquire the land.

Preliminary plans for the $2 billion project call for a boutique hotel, a retail shops and eight condo-hotel towers in the 350-foot to 400-foot range, though nothing is defined, Centra principal and cofounder Jim Stuart said.

"There are cities around the country and around the world trying to think about how to redevelop," Stuart said. "Here's this obscure street that has secondary, even degenerate-type housing. All of these developers are coming in without any economic help from the city. What they're doing to Harmon, it's just off the chart."

Centra Properties partner Kenneth Sullivan III said: "The rest of the city doesn't know what's about to happen here."

Scott Gragson, a Colliers International land broker, negotiated the sale of 33 acres of apartments near Harmon and Koval Lane to home builder D.R. Horton for about $2.6 million an acre. Part of that land was then sold to Starwood for the W hotel, which is planned for the site of the Ice nightclub.

"It could be the biggest boom we've ever seen in Las Vegas," Gragson said. "I think the sky's the limit. One thing is it (Harmon) dead-ends at UNLV, so it's like its own private boutique strip. It's unbelievable on paper what will happen there. Take pictures of it because it's going to be completely different. It's going to be night and day."

The D.R. Horton property wasn't part of a controversial land deal that Gragson was involved in that federal and local authorities are now investigating.

Authorities are investigating the Clark County Aviation Department's land sale process after Gragson and his investment partners were able to buy a parcel that was deed-restricted for a cemetery and then get it rezoned for commercial use.

Gragson said land owners are getting anywhere from $3 million to $7 million an acre along Harmon. The estate of Richard Tam owns 12 acres behind the Aladdin and reportedly wants $200 million for it, a real estate source said.

Turn the corner at Koval and more development is planned, including the Aqua Blue high-rise condo project with a restaurant and fitness center tied to former National Basketball Association star Michael Jordan.

Although much of Harmon Avenue's development is slated for high-end residential instead of gaming, Centra's project will blend the two, Centra President Frank Beck said.

"For one thing, the Strip is done growing linearly and our idea is to drive it nodal," he said. "The investment is toward a hipper place in town and it's largely along Harmon because there's land ready to be regenerated there."

Beck said you'd be hard-pressed to find this much development anywhere in the country in such a short span of time and distance.

"The real high-volume investment seems to be happening here. Everything else seems to be peripheral," he said.

MGM Mirage Chief Financial Officer Jim Murren said he's never seen such a "frenzy" over a small piece of the world in his 14 years on Wall Street and seven years in Las Vegas.

"Harmon will become, I believe, something along the lines of a Madison Avenue or Park Avenue, if you relate it to New York," he said. "It's going to be a residential corridor of condos and boutique hotels."

It began with Irwin Molasky building Park Towers and Turnberry Associates coming here from Florida to build Turnberry Place, Murren said. He remembers looking at Turnberry's models and being impressed by their expertise and quality.

That's why MGM Mirage became a partner with Turnberry in the Residences at MGM Grand, which is selling its second tower after "overwhelming success" with its first 586-unit tower.

"The point is, that stimulated a lot of demand for these 80 (high-rise) projects or whatever the number is," he said.

Murren has been eyeing the 55-acre Project CityCenter site ever since the merger of MGM Grand and Mirage Resorts and said the project will be a "dramatic departure" from anything the company has previously done.

"It'll be a city in and of itself here. Our economic responsibility is to make money for our shareholders and for our employees. Our social responsibility is to provide a greater array of cultural, educational and residential opportunities for our community. That's the genesis of CityCenter," he said.

Harmon is destined to become an east-west transportation corridor much like Flamingo Road and Tropicana Avenue, going from the Palms to UNLV.

Clark County Public Works is doing $11.5 million in road work on Harmon between Las Vegas Boulevard and Polaris Avenue, including the completed bridge over Interstate 15, department spokesman Bobby Shelton said.

The multiphase project will eventually connect Harmon west of the railroad tracks. A multimillion-dollar interchange at Valley View has yet to be designed.

The first phase of improvements began three years ago with storm drain installation and the next project is the realignment of Harmon west of the Strip, Shelton said.

Added Centra's Stuart: "I see it being a product of new thinking, our new urban core. Harmon Avenue is going to develop with projects not so much geared toward tourists, but for a living environment brought to a scale that's livable."

It's time for Las Vegas developers and planners to "think urban," said Bruce Eichner, chief executive officer of 3700 Associates, developer of the $1.5 billion Cosmopolitan mixed-use project on a sliver of land on Harmon, directly south of Bellagio.

He said classic Las Vegas was built horizontally because land wasn't an issue. The cost of acreage wasn't nearly what it is today and land was readily available.

Eichner is taking advantage of every square inch of 8 1/2 acres that 3700 Associates acquired last year from Margaret Elardi for $90 million. The land includes 400 feet of Strip frontage and 1,100 feet along Harmon.

He's putting a hotel tower over the casino with five levels of underground parking.

"People come to Las Vegas to be entertained and that entertainment has evolved from what I perceived it to be 10 years ago, which was inexpensive rooms, inexpensive food and gaming," Eichner said. "So I took my front door and made it a casino and retail because that's a form of entertainment."

Eichner, a successful high-rise developer in New York and Miami, said he's more focused on the areas north and south of his property than east and west. He wants to capture the 55,000 people a day that walk past his property and overflow crowds from Bellagio, Paris Las Vegas and the Aladdin.

The Cosmopolitan, scheduled to break ground in August, will have 1,000 hotel rooms and 1,700 condo-hotel units in two towers, a 70,000-square-foot casino, 300,000 square feet of retail and restaurants, a 1,800-seat theater and the Cosmo Beach Club on the pool deck. Condo prices range from $475,000 for 670-square-foot studio units to $850,000 for 970-square-foot, one-bedroom units.

"Our theme is cosmopolitan," Eichner said. "Cosmopolitan is urban and urban is architectural and experiential."

Palms owner George Maloof announced plans for a $600 million expansion that includes a 40-story hotel tower now under construction and 50-story condominium hotel and spa to be called Palms Place.

The hotel became the newest hip property in Las Vegas when it opened in 2001, attracting Hollywood celebrities and high-profile professional athletes.

The expansion will feature an entertainment component that mixes nightlife and dining. The Palms entered a licensing agreement with Playboy Enterprises that lets the hotel use the Playboy brand name for a high-end lounge and a themed retail venue.

The Palms and the N9NE Group, which operates hot spots ghostbar and Rain in the existing tower, will operate the new venues.