Trump the star of the show in condo resort groundbreaking - Tuesday 12th of July 2005
Government officials, showgirls and the winner of this years Miss USA pageant were among those who braved 100-degree temperatures to celebrate Tuesday mornings groundbreaking of Donald Trumps namesake condominium-hotel tower in Las Vegas.
With camera crews from various entertainment news networks in tow, Trump arrived by limo and walked down a red carpet to a podium close enough for groups of gawking tourists to get a good look at the developer-turned-television star. In a VIP area, he plied guests with hors doeuvres and cocktails.
"Its a great tribute to Las Vegas," Trump said of his $500 million Trump International Hotel and Tower. The tower will go up on a 3-acre parcel behind the New Frontier and across the street from the Fashion Show mall.
Buyers reserved all of the 1,282 units within the first four-and-a-half days on the market, a possible record for Las Vegas, Trump said.
He also confirmed news that a second, virtually identical tower will be built next door to handle overflow demand from the first building.
Trumps business partner, the characteristically publicity-shy Phil Ruffin, faced the cameras with his fiancee.
"Im very happy that Donald took this on," Ruffin said. "I know this project is going to be a huge success."
Ruffin, who owns the New Frontier hotel and casino, put up the land for the project. The land, part of the casinos rear parking lot, is a fraction of the more than 60 acres at the New Frontier. Ruffin has previously announced plans to at some point tear down the New Frontier and build a major resort with at least 3,000 rooms at a potential cost of at least $1.3 billion.
The condo-hotel tower, at least five years in the making, is expected to open by mid-2008. Prices for units range from $600,000 to $6 million -- up to 30 percent more than originally advertised. In true Trump fashion, the tower will be clad in 24-carat gold glass and outfitted with Italian marble floors, sub-zero refrigerators and flat-screen TVs. Other features include a spa, fitness center, salon, outdoor pool and bar, business center and restaurants.
Sales of the units officially begin today, when a $3 million sales office -- complete with white leather chairs and brass finishes -- opens to the public at the corner of Las Vegas Boulevard and Fashion Show Drive.
The announcement comes in the midst of a condo gold rush in Las Vegas, where some 29,000 units have been proposed or are under construction around the Strip. Many experts are already awaiting the demise of several high-rise projects as proposals begin to outpace potential buyers and construction costs soar to meet demand, pricing mid-level or off-Strip developers out of the market.
Bank financing was easily available until more recently, with virtual unknowns able to finance entire high-rise projects based on a certain number of advance reservations. That has changed in recent months as several high-rise projects have been scrapped, making banks warier about financing such deals upfront, experts say.
In an interview Tuesday, Trump said his tower has become the definitive condo investment in a market where smaller developers may end up bowing out.
"Youre not going to see a lot of these other towers get built," he said. "We blow everything out of the water. We have the best location and the best building."
Together, Trump and Ruffin have invested "tens of millions of dollars" of seed money into the project, said Jack Wishna, a Las Vegas consultant who introduced Trump to Ruffin and is a minority partner in the tower.
Its a small fraction of the towers entire cost. But its enough to demonstrate a significant vote of confidence for Las Vegas, observers say.
Members of Nevadas congressional delegation, including Sen. John Ensign, Rep. Shelley Berkley and Rep. Jim Gibbons, all sent congratulatory letters honoring Trumps investment in Las Vegas. Even Carolyn Goodman, wife of Las Vegas Mayor Oscar Goodman, was on hand to pay tribute to a man with an ego to rival any other in town.
After the event, observer Lt. Gov. Lorraine Hunt said Trump "completes" the array of bright, aggressive entrepreneurs who have come to Las Vegas to make their mark.
"Weve known of his interest (in Las Vegas) for a long time, but we didnt know whether it was real or not," Hunt said. "Now hes put his money into it ... it was worth waiting for."
The Trump name alone was enough to generate significant interest in the project, Las Vegas real estate agents said.
Rebecca Hoag, an agent with Windermere Real Estate, said she had a few clients who got in too late to reserve units and are hopeful that some buyers drop out of the running over the next few days.
"This is one I endorsed because I knew it was solid," she said of the tower. "I know this is going to be a solid investment."
Century 21 Advantage Gold agent Marianne Foti said she secured more than 25 units in the tower for buyers the day after reservations were opened to the public.
"They went so quickly because of the name. The Trump name is associated with quality," she said. "Theres no doubt in my mind that this will get built. I think it will be the most successful project in Las Vegas."
Best known for developing real estate in New York, Trump rocketed to fame last year with his hit reality show The Apprentice. The show is one of the highest rated on television and is now in production for its fourth season on NBC.
Trumps casino career has been rocky at best. His casino company has slipped into bankruptcy twice, both times burdened by high-interest-rate debt. While other casinos in Atlantic City reinvested in their properties, Trumps remained stuck in the 1980s and 1990s. The 2003 opening of the $1.1 billion Borgata resort, built by MGM Mirage and Boyd Gaming Corp., hastened the decline of Trumps Atlantic City empire.
The publicly held company emerged from bankruptcy with a lower debt burden, a group of bondholders who were given stock in exchange for the debt owed and a plan to reinvest in the properties. Trump, still board chairman, stepped down as CEO and was replaced with a well-respected and more experienced gaming executive.
His private real estate development company, and, many would argue, his reputation, remained unscathed. The transaction also freed up more time for Trump to do what he does best: develop high-rise condominiums.
Trump has built, bought or sold about a dozen high-rise hotels and condominium towers in New York City over about the past two decades.
He has been sniffing out deals in Las Vegas for the same number of years and has discussed potential projects with several casino officials. Some never materialized because of Trumps unwillingness to put up a significant chunk of cash as equity, arguing that his name alone would make the project worth more to investors, said David Atwell, a resort broker who once represented Trump.
Trump has eyed land for a namesake casino across Las Vegas, including land at the Excalibur site, the old Frontier hotel, the Aladdin, the former Desert Inn and land across from the Sahara.
He switched gears more recently, proposing to build a condo tower along the lines of his luxury buildings in New York. Trump was close to signing a deal to build a high rise at the corner of Harmon Avenue and the Strip in 1999, several months before settling on the New Frontier site to the north.
Atwell said he was surprised when he first heard of Trumps interest in the New Frontier.
"I said to him, Youve got to be kidding. It was a B site at the back of the property and at the north end of the Strip."
The once-overlooked location, largely because of the opening of the Wynn Las Vegas megaresort across the street, "has turned into an A site," Atwell said.
As luck would have it, Trump is now building the property across from another monumental ego and the operator of what is arguably the hottest resort in town.
Steve Wynn, a showman in his own right, is still newer to self-promotion than Trump, who has also authored several books and courts media attention.
"This is the best thing that could have happened for Trump. He can put his big gold letters across the street from Wynns big gold letters," Atwell said.
Wynn initially planned to call his resort Le Reve after a Picasso in his art collection until marketers convinced him otherwise. His resort now features a mountain of branded merchandise, much of it bearing his name.
Wynn, who attended the groundbreaking with his wife Elaine, hosted Trump during his stay in Las Vegas. "Ive never stayed in a more beautiful suite," Trump said of Wynn Las Vegas.
Trump was cagey when asked about whether he will eventually run his own casino resort in Las Vegas.
"Lets see what happens," he said. "The costs are high. Its pretty tough to build a big casino these days."
For now, Trump isnt part of Ruffins planned redevelopment project but said he would consider any opportunities to do so.
"I think hes a special guy and a visionary," Trump said.
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