Land slated for Crown LV offered for sale

LAS VEGAS, Nevada -- Texas-based developer Christopher Milam once hoped to build the largest tower in the Western Hemisphere on the Strip.

Now he's hoping to just hold onto the land.

With an option to buy the old Wet 'n Wild site expiring at the end of June, that may not be possible.

Milam on Wednesday confirmed that the 27-acre site south of the Sahara slated for the $5 billion Crown Las Vegas has been put up for sale with Goldman Sachs and CB Richard Ellis.

"The issue is not the project, it's a great project," Milam said. "And it's not the land, it's a great piece of land. It's the financing markets. What we really do, still remains to be seen."

In addition to selling the land for the right price, Milam said he is considering selling a stake in the proposed project to an investor.

Clark County commissioners approved the site in December for a mixed-use gaming project featuring a 1,064-foot hotel tower, which would be the largest such structure in the United States.

Milam had first proposed an 1,888-foot hotel tower, which would have been the tallest structure in the Western Hemisphere, before the Federal Aviation Administration refused to back a request for a height variance.

The property is controlled by LVTI, a holding company partnership between Milam, Melbourne, Australia-based Crown Ltd. and New York-based private equity firm York Capital Management, although Milam's group does not own the land outright.

Crown, which is controlled by Australian billionaire James Packer, said last month that the partners were "undertaking a strategic review of its development options in light of recent upheavals in capital markets." The move comes as the clock ticks on the partnership's control of the site.

The group has an option to buy the site for $475 million, or $17.7 million per acre, from Archon Corp. The option expires June 30.

Wachovia Capital Markets gaming analyst Dennis Farrell Jr. said LVTI's shopping of the land appears to be the biggest example of a gaming company in the market trying to divest itself of land it planned to use for a project that had not yet secured financing.

"Unless you're willing to put a significant amount of equity into the transaction, which would be taking on a lot of risk at this point, it's a prudent decision to divest the land," Farrell said.

He said it is unclear when the credit markets will loosen up for large-scale Strip developments.

A representative for Crown, which does not have a U.S. office, did not return inquiries seeking comment by press time.

Milam first entered a land-purchase agreement in June 2006, paying a $5 million deposit three days later. The initial price was $450 million. In March 2007 the price was raised to $475 million.

LVTI made a $40 million land-option payment in May and has been paying $2.3 million in nonrefundable, nonapplicable monthly options payments since September to extend the deadline for the sale. The payments will increase to $2.9 million in April.

Archon is leasing the site as a construction staging area for the Fontainebleau.