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Best of Howard Stutz

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Howard Stutz

Renovations Bring Trump to New Level

20 March 2006

LAS VEGAS -- New York developer Donald Trump doesn't like to do anything small.

Take, for example, the task of completing the largest level of the $500 million Trump International Hotel & Tower, now under construction behind the New Frontier.

Perini Building Co., the project's general contractor, is overseeing a two-day placement of approximately 2,100 cubic yards of concrete that will form the tower's sixth-floor recreational deck. It isn't the largest single concrete pour the company has accomplished -- the basement levels of several Strip casinos were a greater magnitude -- but the challenge is the area of the building.

"It's a little more difficult because it's vertical," Perini Chairman Dick Rizzo said of the sixth-floor location. "What's most significant is the size of this building. For now, other than the Stratosphere, nothing will be taller."

Trump, builder of Manhattan skyscrapers and developer of prime New York real estate and star of NBC's "The Apprentice," said his first Las Vegas project was 20 years in the making.

"It's exciting to see this building take shape because I always thought it would be a total winner," said Trump, whose name had been rumored concerning the purchase of various Strip casinos and Las Vegas real estate over two decades. "It's going to be an amazing building in a great location. The Trump brand is good for the city."

The concrete pour began at 1 a.m. Friday and went for four hours with nonstop delivery of materials by more than two dozen trucks. The pour is scheduled to finish Monday with a second four-hour early-morning effort.

The recreational deck, the elevated public level of the 64-story, 1,282-unit project, will eventually encompass 36,000 square feet for the tower's pool area, spa, gym, meeting rooms, salon and a snack bar. A five-story parking garage and Trump International management offices will be below the recreation deck.

Once the level is completed, the 620-foot tower will begin to take shape.

Perini, which broke ground on the project last summer, said it expects to complete one floor every six days with a total construction period of 72 weeks. The first residents are expected to move into Trump International in early 2008.

Trump said his Las Vegas project has not been beset by factors that have hampered other proposed Las Vegas high-rise developments, mainly the growing cost of construction. Trump said he locked in 90 percent of his construction costs when he first announced plans for the development in 2004.

"Las Vegas has become a very expensive place to build," Trump said. "As soon as I finished my plans, I bought my construction. The elevated construction costs have hurt a lot people here."

Perini Building is also the general contractor on MGM Mirage's $7 billion Project CityCenter and the $1.8 billion Cosmopolitan. Trump, he said, had perfect timing for building his tower.

"He was out of the blocks first, which was important because his price was guaranteed," Rizzo said. "He'd done extremely well."

Rising fuel costs have driven up the price of building materials throughout the country, said Trump, who is developing residential projects in New York City and West Palm Beach, Fla., a 92-story tower in Chicago and a golf course and residential development outside Los Angeles.

"Concrete and steel prices have gone through the roof," Trump said. "A large part of construction is dictated by fuel costs. Construction costs have got to be the highest I've seen in years."

Labor issues, Trump said, haven't been a factor in construction of Trump International. A recent study by Deutsche Bank found that lack of qualified labor in Las Vegas is threatening the development of new casinos and high-rise condominiums.

"The advantage I have is that people want to work for me," Trump said. "I've had a good relationship with the contractors in Las Vegas."

Before groundbreaking, Trump International had been 100 percent reserved. The Trump sales force has been converting the reservations into actual sales for the studio, one-, two- and three bedroom condominiums that range in size from 635 square feet to 3,530 square feet.

As of early this week, about 100 units were still available.

"Perspective buyers drop out for various reasons, but we have a solid list of people who are interested in the building," said Jack Christie, vice president of sales and marketing for Trump International. "People are cautious, but there's a lot of demand to be part of the Trump project."

As reservations have fallen through, prices have gone up, about 15 percent overall. Today, the smallest unit sells for $755,000, Christie said. The failures of competitors have also helped the project, he added.

Trump International will allow its condominium owners to lease their units as hotel rooms, and Christie said there not many condo-hotels coming to fruition.

"There are probably only 5,800 condo-hotel units that are going to be built, so that has helped our sales," Christie said.

Trump said he was the first developer in Las Vegas to sell residential units for $1,000 a square foot. He said the prices have risen to now average $1,200 a square foot.

Trump is planning an identical second tower for the Trump International site, but by the time he's ready to release the building for sales -- possibly by year's end -- prices could increase 30 percent to 35 percent per unit.

"Where I come from (New York), prices are around $4,000 a square foot on Park Avenue, so it's all relative," Trump said, adding that rising construction costs will impact the overall price tag of the second tower.

The only question surrounding the project is the fate of neighboring New Frontier. Trump said he expects owner Phil Ruffin to shortly announce a redevelopment for the hotel-casino.