Las Vegas Tourism Authority Says Scrapped Strip Land Sale Won’t Stall Renovation
Posted on: January 17, 2023, 11:40h.
Last updated on: January 17, 2023, 02:28h.
The Las Vegas Convention and Visitors Authority (LVCVA) held its first meeting since its $120 million land sale fell through with a Chilean businessman. While disappointed, agency officials say the development won’t impede the timeline of the Convention Center’s makeover.
In October 2021, the LVCA announced it had finally found a buyer for its 10 acres of Strip land that was once where the famed Riviera stood. The supposed buyer was Claudio Fischer, a Chilean billionaire whose empire includes casinos across South America.
Fischer said he would purchase the 10 acres for $120 million, with the ultimate goal of building a new casino resort on the Strip’s northern end. But Fischer kicked off the new year by delivering the LVCVA some bad news — he wanted out.
Citing increasing interest rates, Fischer said the opportunity was no longer attractive. He said he was backing out of the land purchase and has since paid the LVCVA a $7 million separation fee.
Convention Reno on Schedule
The LVCVA plans to use the proceeds from selling the 10 acres of Strip frontage to partially bankroll the Convention Center’s makeover of the North, Central, and South halls. The agency has budgeted $597 million to update those facilities to mimic the look of the West Hall, which opened in June 2021.
The West Hall development is why the LVCVA owns the 10 acres in the first place. When the Riviera fell into bankruptcy, the tourism and convention agency scooped up the resort and its surrounding property for $182.5 million. The Riv was imploded in 2016.
The acquisition allowed the Las Vegas Convention Center to expand west of Paradise Road, closer to the Strip. But not all of the former Riv property was needed for the West Hall.
LVCVA Chair Steve Hill told the board that the deal falling through with Fischer is a setback. But the agency has set aside $55 million from its fiscal budget for the Convention Center refresh. Those funds will allow the makeover to begin while a new buyer for the land is found.
We’ve been fortunate that our revenues have been better than expected recently, and our expenditures have been less than we’ve budgeted. We hope that trend continues because that certainly makes it easier. But regardless, we will make this renovation work over the next couple of years,” Hill explained.
The 10 acres are back on the market, with CBRE handling the listing. No listing price is provided.
The LVCVA is experiencing robust revenues because casino rooms are charging record rates for their guestrooms. The LVCVA is primarily funded by the 13.38% hotel occupancy tax Clark County charges on each nightly stay.
The LVCVA receives 34% of the county occupancy tax. Room rates and revenue per available room (RevPAR) have soared over the past nine months, despite visitor volume remaining below 2019 numbers.
The average nightly rate for a Las Vegas Strip hotel room in 2022 through November, the most recently reported month, was about $182. That’s up 26% compared with the same 11 months in 2019, when the nightly going rate was only $144.
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