BY VALERIE MILLER
The World Jewelry Center plans to scrap designs for nearly 100 residential condominiums and delay its opening for another year or more, its developer said.
The latest setback for the proposed 1.1 million-square-foot wholesale jewelry marketplace is the second delay in about a year, and comes as Union Park is researching cutbacks in its own residential plans.
The World Jewelry Center, a major Union Park project first postponed a year ago will now likely not be completed until 2015 or later, said Bill Boyajian, the jewelry mart’s managing director. The 98 planned residential condos will also likely be eliminated and a proposed 50-story tower be reduced by 10 stories.
The jewelry mart’s developer said the project’s opening could be delayed beyond 2015 unless the economy improves significantly.
“I would hope it would be 2015, but the longer it is stretched out, the harder it is and the more expensive it is to keep the project out there,” Boyajian said. “It really depends on the capital markets. There is money, but nobody wants to loan it.”
Project developers are conserving money on hand. World Jewelry Center sales staff and promotional costs have been cut. Most of the jewelry mart’s funding to date has come from developer and visionary Robert Zarnegin. The project, first announced more than two years ago, was supposed to be a mixed-use development that included a 125,000-square-foot jewelry retail center and a 50-story trade tower with residential condos at its top. The 98 condos would have accounted for 800,000 square of residential space. The project was designed to cater to gem and jewelry makers, but nonindustry investors would have been the likeliest condo buyers, Boyajian said.
Eliminating the residences wouldn’t take away from the mission of drawing jewelry-industry people to Las Vegas, and would save on construction costs, he said. The expense of building has left the project’s time line up in the air.
“I really don’t know when you look at designs and costs … real estate prices have gone down but the costs of raw materials — glass, steel from Dubai and China — has ratcheted higher,” Boyajian said.
Even so, developers already have received about 150 letters of intent to lease retail space.
The jewelry center’s developers, Probity International Corp., would need the city of Las Vegas’ approval to alter its development agreement. Boyajian expects cooperation from both the city and Union Park’s residential developer, Newland Communities.
The city knew of the World Jewelry Center’s plans to reduce its size and cut out its condos, said Steve Van Gorp, deputy director for the city’s Office of Business Development. He was unsure whether plans had been formally submitted to the city at press time.
Newland Communities also plans to go before the city early next year, most likely in February, to request an extension for a yet-undetermined period of time to break ground on the first residential parcel, Newland Communities development director Rita Brandin said. Newland, which is developing about 2,600 of the 3,000 residential units planned for the site, received a 14-month groundbreaking extension from the city in June to delay the start of construction until the second half of 2009.
Now the economic crisis has made it necessary to push the start back even farther, she said.
“We won’t break ground in 2009,” she said of the initial residential development. The market turbulence made it impossible to predict how long the delay could be, Brandin added.
Work on the residential portion of the $6 billion Union Park development was to begin in October and finish in 2017, city officials said. Brandin, however, said she always pictured the entire development’s completion as a “10- to 15-year” endeavor.
Requests for postponements of residential or other upcoming Union Park projects could be made with the city well into next year, Brandin added.
“Nobody is under obligation to start construction before mid-2009,” she said.
Contact reporter Valerie Miller at vmiller@lvbusinesspress.com or 702-387-5286.
Source: www.lvbusinesspress.com/articles
