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Howard Stutz
 

With Project's Start, Trump's Time Has Come

12 July 2005

Donald Trump is finally getting his famous name in lights high above the Strip.

The New York developer, star of "The Apprentice" on NBC television, will break ground this morning on the $500 million, 2 million-square-foot Trump International Hotel & Tower, completing a 20-year flirtation with Southern Nevada.

"I've always liked Las Vegas and I like the people there," Trump said. "But I've become the biggest developer in New York City and there is only so much you can do. Las Vegas has always been very important to me, and I wanted to find the right time and the right place to develop the most beautiful building in the city."

Trump International will go up on six acres behind the New Frontier and across from the Fashion Show mall. The project is a 64-story, 1,282-unit residential and hotel tower that will house 880 studio units and 352 one-bedroom condominiums on floors 16 through 59, and 50 suites of one, two or three bedrooms on the top five floors. Prices range from $600,000 to $6 million and the tower has been 100 percent reserved since May.

Trump's name has been linked to almost every potential real estate venture or rumored casino sale since the mid-1980s. While his most high-profile move was a bid to buy the company that once controlled Bally's, Trump said most of deals were never real.

"I guess I should be flattered, but people use my name to drive up the price of real estate," Trump said. "They'll say, 'Trump's interested,' and that causes more interest. There is nothing I can really do about it."

In the early 1990s, Trump temporarily established a Las Vegas-based corporation, Trump Nevada, and had a well-connected former gaming regulator, Mike Rumbolz, sift through proposals and opportunities.

Two years ago, Trump bought more than 10 percent of the outstanding shares in Riviera Holdings Corp. and was licensed by state gaming authorities. He sold the stock but kept the license.

New Frontier owner Phil Ruffin has been planning to redevelop his aging Strip casino since he took over the property in 1998. Some observers view Trump's high-rise plans as a first step in gaining a piece of the potentially lucrative Strip location.

Trump said he might want to participate in developing the New Frontier site. But for now, Trump International is his priority.

"I think we're going to build something that is pretty spectacular," Trump said in his usual unabashed manner, saying the building will exceed all expectations for lavish furnishings, opulent surroundings and state-of-the-art features.

"Even if sales fall through, we have 2,000 potential buyers waiting. I'm getting $1,000 to $1,200 a square foot for our building. That's the highest in Las Vegas," he added.

Trump International will not have a casino. It will sell furnished units to individual buyers, who will have the option of leasing the rooms to hotel customers. Trump International managers will handle the rentals.

"We're going to bring a lot of good customers to Las Vegas," Trump said. "We're in a great location and the people who have purchased units are the type of customers who will be good for the casinos on the Las Vegas Strip."

Deutsche Bank gaming analyst Marc Falcone, in an April report to investors, estimated that only 30 percent of the proposed high-rise condominiums, which encompass 37,000 proposed units, will ever get built. Those that do get built will attract more people to casinos, he said.

"This urbanization of Las Vegas will boost incremental visitation, drive higher traffic and more frequent visits to both new and existing Strip casino-hotel resorts, while yielding increased gaming and nongaming spending," Falcone said.

At the groundbreaking, Trump is expected to announce that sales will begin shortly for a second tower to the Trump International site. He's also expected to say units in the second tower will sell at prices averaging 35 percent higher than in the first tower.

Gaming industry executives and elected officials have been invited to this morning's event behind the New Frontier. Wynn Resorts Ltd. Chairman Steve Wynn, Trump's longtime adversary and sometimes friend, confirmed through his administrative assistant that he plans to attend.