Majestic Research

Las Vegas Business Press

Wrong Side of the Tracks: Bridges Explored as a Chance to Connect "Old" Downtown with Union Park

By Valerie Miller
Published: March 26, 2007

The World Market Center Pavilions, and the barren 61 acres next to them, look deceptively close from the back of the Plaza Hotel & Casino downtown. In reality, those big, white tents could be a million miles away.

The Plaza, Fremont Street and other downtown establishments are cut off by the Union Pacific railroad tracks from the World Market Center and Las Vegas’ promised land—Union Park.

Here too, train tracks, long a sign of social division, separate the two sides of downtown revitalization. As plans for the Smith Center for the Performing Arts, the Keep Memory Alive Lou Ruvo Brain Institute, the World Jewelry Center and surrounding community take shape west of the Union Pacific line, properties across the tracks struggle to keep up.

Downtown gambling revenue has fallen about 6 percent in the last year. Remodeling of the Lady Luck Hotel & Casino has come to a halt, and the 700-room property on Third Street has been closed for more than a year.

The failure of the Lady Luck’s owner, the Henry Brent Co., to complete renovations to the property has affected neighboring properties, including the Golden Nugget Hotel & Casino, says Landry’s CEO Tilman Fertitta, whose company owns the Nugget.

That resort has already put $100 million into revamping its property and plans to spend another $100 million on improvements. Fertitta says, however, that his downtown neighbors aren’t doing as much as they should to fix the area.

“No, we definitely need to see more money spent downtown, absolutely,” the CEO said, adding, “I don’t think people come to the Golden Nugget because it is on Fremont Street. They come to the Golden Nugget because it is the Golden Nugget.”

Beaten by the Strip

Downtown has lost some of its core customers in recent years, according to Matthew Jacob, a director with Majestic Research. “Downtown has, in the past, been very successful in drawing a certain type of player,” he explained. “The Hawaiian visitor has been a big draw. As the Strip properties continue to become more successful, they go after that type of market.”

Hawaiian visitors aren’t the only market downtown casinos have had to fight to hang onto, says Golden Gate Hotel & Casino owner Mark Brandenburg. Over the last decade, Glitter Gulch properties have been hit from all sides.

“Since the 1990 debut of the Mirage, you all of a sudden were talking about multi-billion-dollar hotels on large pieces of property, while downtown hotels were on smaller pieces of property,” the 17-year managing partner of the Golden Gate recalled. “First, you had the $200 million neighborhood casino. Now, you have a billion-dollar neighborhood casino.

“Locals used to come downtown because you got the best deals downtown,” Brandenburg added. Southern California’s Indian casinos didn’t help business, either, he says.

A Tale of Two Cities

Developers of Union Park, city officials and landholders from “old” downtown are looking at ways to cross the tracks. But most admit that a solution is still along way off.

“Union Park will create a very urban city in a very Las Vegas way,” Brandenburg predicted. He’s viewed older renderings showing Fremont Street going “straight through” to the 61 acres, “but in order for that to happen, they would have to knock down the Plaza.”

The lack of definitive plans for the Tamares Group-owned Plaza has been major obstacle to connecting the two sides, City of Las Vegas Director of Business Development Scott Adams says. The 35-year-old hotel-casino sits on 17 acres running parallel to Union Park. It is in a direct path from the 61 acres to Fremont Street.

“The Plaza is a problem,” Adams said. “We have to find a way to get the public through.” He holds out hope that Liechtenstein-based Tamares would see things the city’s way and finally redevelop the property. “We think there is motivation that Tamares would want to do it, because if you go across Union Park, you go to the World Market Center.”

Easy access to the Plaza might help the hotel capture some of the 50,000 to 60,000 attendees for each furniture show at the WMC. Redevelopment tax rebates could also be in the offing, if Tamares submits acceptable plans, the city official confirms, adding that Tamares has not sought public dollars to date.

“The Plaza isn’t in very good condition,” Adams maintained. “They would have to substantially upgrade it or just tear it down.”

Tamares has been weighing its options for demolishing or renovating the 1,036-room property, according to former Tamares Las Vegas Managing Member Michael Treanor.

Plenty of Incentive

Even if the twice-a-year furniture mart and a public subsidy couldn’t entice Tamares, there are other attractions. The very lucrative Las Vegas Premium Outlets mall sits just across the tracks. Union Park itself will have 3,600 high-rise residential units, in addition to 1,750 hotel rooms, 2.2 million square feet of class-A office space and 469,000 square feet of ground-floor retail, according to city plans. Build-out is expected to be completed by 2012.

Tamares has made progress toward revamping its recent Las Vegas acquisitions, Treanor says. “We have extensive redevelopment plans,” he elaborated. “We have spent close to a million dollars on architectural designs and on that process.”

The Bridges of Clark County

In recent months, Treanor has been talking with downtown landowner David Mitchell and Union Park project manager Newland Communities to develop a plan that might include pedestrian bridges. “We have plans in the works for the Plaza, for Las Vegas Club and preliminary plans for the Nevada Hotel,” he said.

The major players are talking about pedestrian overpasses, according to Newland Communities Development Director Rita Brandin. Those bridges would link the 61 acres, go over the tracks, and connect with the 17-acre Plaza site.

The city has looked at pedestrian bridges from Union Park to Plaza land, Adams says. A workable solution, though, would require firm plans for the Plaza.

Thousands of future Union Park residents and workers could traverse not only the Plaza’s location, but continue east to the five-block area now commonly referred to as the “live, work” region, Brandin says. Those city blocks are owned by Mitchell and include the shuttered Queen of Hearts motel. The land is bordered by Main Street, Lewis and Bonneville avenues, and Casino Center Boulevard.

Signs of Progress

Downtown is progressing. A surge in high-rise condominium units should help spur growth to the east of the tracks, Adams notes. About 15,000 units are planned over the next 10 years. Around 1,600 of those are now under construction.

The city’s core has seen signs of new life since the Fremont Street Experience canopy was erected in 1995 but is still overshadowed by massive growth on the Strip, according to Boyd Gaming spokesman Rob Stillwell. Boyd owns the California, Fremont and Main Street Station hotel-casinos, and land at the north end of the Plaza’s 17 acres.

“Things have all been positive, from the outlet mall to new ownership of the Golden Nugget. These are things that you haven’t seen in a long time,” he said.

Businesses on the both sides of the Union Pacific railroad track wait for the two sides to meet. “In 10 years you will see a radically different downtown,” Brandin said. “I believe the east side of the tracks is important to the 61 acres and the 61 acres is important to the east side of the tracks.”

That marriage of downtowns can’t come fast enough for some. “The issue is,” as Brandenburg put it, “we still have the tracks there.”