Donald Trump, the charismatic and outspoken real estate developer, recently broke ground on a new $500 million, 64-story condo-hotel, behind the New Frontier on the Las Vegas Strip. Coincidentally, Trump's ex-wife, Ivana, just lent her name to a new $500 million, 80-story condo tower at the northeast corner of Sahara Avenue and Las Vegas Boulevard South. The media has predictably played off the former couple and their rival projects, suggesting that Ivana's high-rise is sweet revenge for an acrimonious public divorce. But the two projects, in actuality, are worlds apart.
Donald is a savvy and experienced developer who changed New York's skyline with projects such as Trump Tower, the St. Moritz and the Grand Hyatt Hotel, among others. Ivana's only high-rise experience comes from a Miami condominium project called Bentley Bay that filed for Chapter 11 bankruptcy protection in 2004.
The competing projects are different in other ways as well. The new Trump tower is a condo-hotel that enables owners to earn an income by renting out their residence. The project, in a sense, acts as an added room inventory for the New Frontier hotel-casino. The high-rise is a 50-50 joint-venture between Trump and Phil Ruffin, owner of the 41-acre New Frontier site at 3120 Las Vegas Boulevard South.
"For the Strip resorts, there is little downside to condo hotels," said John Restrepo, principal of the real estate research firm Restrepo Consulting Group. "It's essentially a way of having buyers finance a room expansion."
And while participation in the Trump rental program is optional, the dual-use product appeals to a wider spectrum of buyers including second-home owners and investors. The Trump project reportedly sold all 1,282 units within 4 days, despite sale prices of $600,000 to $6 million.
"We have a waiting list of 2,000 names," said Trump during a July 12 groundbreaking ceremony. "So we are moving ahead with a second tower which will have a 35 percent price increase."
An identical 645-foot-tall building is expected to start construction by year's end, adjacent to the first Trump tower along Fashion Show Drive.
The Ivana, by contrast, was first announced in August 2004 as the Summit. The 923-foot-tall, 946-unit tower was initially expected to break ground during the first quarter of 2005. The project's backer, Australian developer Victor Altomare, has since adjusted the timetable. The Ivana is now anticipated to begin construction in July 2006 and come online in December 2008. Altomare partnered with Rinkai America, headed by Kazumi Ohga, who owns the two-acre project parcel. Although Ivana is a condominium project, it allows for unlimited sub-leasing activity. It's a move that enables the development team to broaden its pool of potential buyers by attracting speculators and investors, but it may also deter other homeowners who want to know their neighbors. While the Summit got off to a slow start, Altomare is hoping Ivana's celebrity status will give the project some brand-name appeal that translates into sales.
"The brand name is important for 'The Ivana' because it's not located in the Golden Mile area," said Bruce Hiatt, owner of Luxury Realty Group, a brokerage firm specializing in high-rise condos. 'The pricing per square foot is also very aggressive."
Ivana residences start at $555,000, up to $35 million for the penthouse, with sizes ranging from 392 square feet to 15,000 square feet. The project, however, is slightly off the beaten path, occupying the site of the former Holy Cow casino, adjacent to the Sahara hotel-casino. Trump's tower, however, is located directly across from the Fashion Show Mall and Wynn Las Vegas, with the Venetian Resort and Treasure Island nearby.
The two projects are also dissimilar in management teams and experience. The Trump name is a proven commodity with a strong track record, a fact that helped it secure institutional project financing from Hypo Bank of New York. While Ivana has a fragrance and cosmetics line, she has no major developments under her belt. Altomare claims there are a number of private investors involved, including his attorney, Joseph Di Mauro, with banks vying to provide a construction loan.
Trump hired Bergman Walls & Associates as architect, a local firm that also designed The Mirage, Golden Nugget, Marriott Grand Chateau and The Residences at MGM. The general contractor, Perini Building Co., did Paris-Las Vegas, Luxor, Ritz-Carlton at Lake Las Vegas, Green Valley Ranch Station and The Palms Casino. Trump will continue to manage the property once it's completed.
Ivana, by comparison, hired New York-based Turner Construction as its general contractor, which has yet to complete a project in Las Vegas. It's local manager, Bob Wallace, recently left the company for a position with Peccole Nevada. The designer is JMA Architecture Studios, which is best known for schools and tilt-up office buildings. Meanwhile, the Ivana has hired a third-party firm to manage the property once it's completed.
"We're tracking approximately 35,200 condominiums and 8,287 condo-hotel units proposed for development in the Las Vegas valley, but only 40 percent of them will actually get built," said Restrepo. "It takes an experienced builder with an established track record, strong financing, and good location for these projects to work, especially with rising construction costs and land prices."