LAS VEGAS — Although he’s not talking about it, Oscar Nunez is literally in a position to write the next chapter of Las Vegas Strip lore.
Nunez owns six aging, cinder-block apartment buildings near a stretch of the Strip where Harrah’s Entertainment owns side-by-side casinos Barbary Coast, Flamingo, Harrah’s, Imperial Palace and O’Sheas.
Harrah’s Entertainment, the world’s largest gaming company, wants to freshen up and redevelop that part of the block, a project that could cost billions of dollars — maybe more than any other in Strip history.
To make it all work, Harrah’s is buying up the property behind its casinos where private investors own time-share condos and blue-collar apartment houses.
But so far Nunez hasn’t sold his French Villas apartments to Harrah’s. The situation has all the makings of another great Strip showdown, the kind that has played out over the years when relatively small property owners have threatened big resorts’ plans.
Probably the most notorious occurred in the 1980s, when casino owner Steve Wynn was about to redefine the Strip with the Mirage. The property Wynn wanted included a 36-unit apartment building. Its owner, Michael Flores, refused to sell.
So Wynn built around him, and the apartments stand to this day, a testament to stubbornness, tucked out of view in a back lot, sandwiched between the Mirage and Treasure Island.
The lesson: Nobody gets in the way of Strip developers. If the small guy doesn’t sell — usually for a nice profit, thank you — the big guy will just build around him.
“It’s an ages-old process that I like to call standing in the way of the gorilla,” said David Atwell, president of Resort Properties of America and one of the leading brokers of Strip acquisitions.
Hardball holdouts
Atwell said a developer’s plan to build or enlarge a project generally plays out in three stages: He, or his agent using a different name to disguise the plans, tries to buy sufficient land early without revealing what’s up. Once that cat is out of the bag, the developer hopes for reasonable negotiations. And then, you have to deal with the hardball holdouts.
Nunez is a holdout. And the question is: Will he eventually exact his price from Harrah’s or force it to build around him?
Harrah’s has been tight-lipped about its redevelopment plans but its land-buying spree in the area is no secret. It obtained development rights to the Summer Bay Resort time-share condominiums behind the Strip and has gobbled up and bulldozed other crumbling properties in the 44-year-old Flamingo Estates subdivision.
Nunez is one of two holdouts. The other, according to Clark County assessor records, is a Beverly Hills, Calif., company that owns a six-unit apartment building.
Bob Rose, the company’s Las Vegas-based property manager, hinted that there is nothing wrong with waiting for the right price on any deal, adding: “It could be sold any day now.”
Calls to Nunez were not returned, nor did he respond to a reporter’s visits to his property.
The French Villas, like the neighboring two-story apartment complexes that are owned by holding companies of Harrah’s, are still advertising for weekly and monthly tenants.
The neighboring Desert Club Apartments has been purchased by a Harrah’s holding company, according to Clark County assessor records, and is still offering tenants six-month leases — an indication nothing is going to happen right away.
But change is under way.
“I’m going to miss it because it’s hard to find a studio in Las Vegas for $130 a week,” said Jimmy Marks, a Flamingo Estates resident for 15 years. “But it’s due for a change. You go behind the Strip casinos now and you find yourself in the ghetto. That’s just not going to work.”
Atwell said that this standoff is nothing new to major Strip developers who go into such acquisitions aware they may have to pay handsomely for properties late in the game — or take other action.
Wynn encountered another showdown in 2000 when he bought the Desert Inn and started buying up golf course homes in the adjacent Desert Inn Estates.
Standoffs nothing new
When at least 10 homeowners refused to sell, he blocked some roads in the neighborhood and built large berms behind the homes of the holdout property owners, blocking their views of the venerable golf course. A four-year legal battle ended in March 2004 when the holdouts received a total of $23 million for their homes — in some cases, getting double Wynn’s initial offer, according to Atwell.