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R. Donahue Peebles is spending $1.6 billion to build Las Palmas, a new Las Vegas hotel and condominium complex that will be worth $2.5 billion when finished. Las Palmas will be the largest real estate project ever developed and owned in the United States by an African American as well as the first Las Vegas hotel built from the ground up by a black developer.
Las Palmas will be a non-gaming hotel on a 13-acre site on swanky Paradise Road near the Strip. Four 55-story glass towers will contain 800 five-star luxury hotel suites and 1,000 condominiums. Hotel rooms will average 650 square feet and charge from $400 to several thousand dollars per night.
Peebles says he is developing the property in Las Vegas because it’s America’s fastest growing city, a top entertainment destination, and an entrepreneurial market laden with opportunity. Las Palmas will be a non-gaming entity because public gambling runs contrary to the project’s exclusive, ultra-high-end concept, says Peebles. He notes that Las Vegas’ visitor allure and revenues have shifted from gaming to entertainment. Two-thirds of the hotels in Las Vegas are non-gaming, however non-gaming hotel rooms are only 20% of total rooms in the city. Other prominent non-gaming hotels on the Strip include Four Seasons Las Vegas, Loews of Las Vegas, Marriott of Las Vegas, and Ritz Carlton of Las Vegas.
Based in Coral Gables, Florida, the Peebles Corp. (No. 13 on the BE INDUSTRIAL/SERVICE 100 list with $403 million in sales) has a real estate portfolio of properties and projects in development valued at $4 billion and 90% black ownership. Peebles has only financial partners, notably Credit Suisse, which financed acquisition of the Las Vegas land and which Peebles expects to provide construction financing. The first tower is targeted for completion in 2010.
Las Vegas leads all U.S. markets for both the number of available hotel rooms and hotel rooms under construction, says Bobby Bowers, an analyst at Hendersonville, Tennessee-based Smith Travel Research. “Las Vegas is one of those markets that just seems to defy the odds and defy gravity. It never seems to hit bottom. It always seems to continue to perform well.”