Homebuilder to redevelop land near Strip

December 10, 2004 - Homebuilder DR Horton purchased 33 acres of land just east of the Las Vegas Strip for $86.5 million, or more than $2.6 million an acre, and some industry experts say the property may be developed into a dense mixed urban village with a casino component.

The land at the northeast corner of Harmon Avenue and Koval Lane was owned by Grand Plaza LP, said Mike Mixer, senior vice president at Colliers International, Las Vegas, which was one of the brokers representing the owners. The asking price was $87 million.

Officials with DR Horton could not be reached for comment. The company closed on the land in October, according to Clark County Assessor records.

The property now includes a complex of low-rent apartments built in 1963 that local real estate experts said most likely will be torn down to make way for a mid-rise residential product similar to DR Horton's projects in the Gaslamp Quarter in San Diego.

"It's really exciting. I liken it to some of the developments in California like Third Street Promenade," Mixer said. "It will be an offshoot of the Strip, with it's own identity and it will be a new emerging activity area for locals and tourists."

When Mixer and his partner Scott Gragson, also a senior vice president at Colliers, started marketing the site, a homebuilder was the last type of company they expected to be interested.

"I wouldn't have put a homebuilder like DR Horton high on the list at that time," he said. "They were on the forefront of looking for opportunities like this."

Gragson said in initial talks with the homebuilder, plans are to sell off a portion of the property to a hotel and casino and have a mixed-use product with a residential component.

Mixer said the sale did not include the nightclub Ice, which is on the northeast corner of Harmon and Koval. He said the property's owners, which lease the land to the nightclub, are in escrow to sell to someone other than DR Horton.

Las Vegas resort broker David Atwell said he is talking to gaming companies about selling them a portion of the land for a casino. He declined to name companies or say how much of the land might be sold off.

Atwell said the parcel's casino zoning rights appear valid, "making the land a valuable gaming site for the right company."

Brian Gordon, a principal at research Applied Analysis, said the site is large enough to support several uses, including a casino.

"There may be an opportunity to parcel off a piece of the site or develop it as a mixed-use environment, to develop its own urban village with retail on lower levels with the possibility for a casino or other amenities," he said.

Gordon said he did not know whether any casino operators were seriously looking at the site.

The price DR Horton paid for the land indicates that it will most likely be a dense development of some sort, Gordon said.

He said if the builder models a community after its Gaslamp project it would attract both locals and tourists.

"It is close enough to the action that tourists would be interested in the site, as well investors for rentals," Gordon said. "It is off-strip slightly so if locals are interested, the location does provide some accessibility east along Paradise which allows residents to avoid Las Vegas Boulevard."

The Harmon corridor east of the Strip is in the process of being redeveloped, with recent announcements by the Hard Rock Hotel, Alexis Park, and Ellis Island for new developments and additions.

Mixer said numerous properties along the street have been sold or are in escrow.

"That whole area is being reenergized and redeveloped in a fairly interesting fashion," he said.

DR Horton may not be the last homebuilder to look at land near the Strip, real estate experts said.

"I foresee other builders looking or expect they are already looking," Mixer said. "I certainly expect to see one or more similar urban style products."

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