The rise of boutique-chic in Las Vegas could start at one of downtown's shadiest dives.
A Miami developer with an eye for converting rundown properties into trendy boutique hotels has an agreement to pay $15.6 million to buy the Gold Spike, a longtime locals grind joint at the intersection of Ogden Avenue and Fourth Street.
Gregg Covin, 38, said he could close on the Gold Spike as early as September and reopen it as an upscale boutique hotel with rooms fetching $125 to $150 per night. The current owners, Tamares Las Vegas Properties, confirmed the purchase agreement.
Covin plans to visit Las Vegas next week to take a closer look at the Gold Spike. But he's already confident the Spike's smoky ambience and grungy reputation won't take the shine off his vision.
"Our specialty is taking crack houses and turning them into four-star boutique hotels," Covin said. "I think the Gold Spike is perfect for that."
If Covin succeeds, the rechristened Gold Spike would be the first boutique-style hotel in a downtown market that's currently dominated by value and volume-oriented casino properties attached to the Fremont Street Experience.
"I think if they achieve a level of success, you will see some other properties move in that direction," said John Knott, executive vice president for CB Richard Ellis Global Gaming Group, the company that listed the Gold Spike.
The property listed in May with a starting price of $15 million for the hotel, casino and an acre of land. Knott said multiple groups made offers to buy it at that price or higher.
In the short-term, Covin said he would retain the management company Navegante Group as managers of the Gold Spike. He also said he plans to keep the property operating while it undergoes renovation.
"I'll probably keep it partially open for awhile," said Covin of the property, which has specials such as $1 for a shot of tequila or can of Tecate beer with salt and lime and $27.50 a night room rates during the week. "It will stay as is until I am ready for the grand reopening," he said.
But according to Covin, the new hotel will bear little resemblance to the current Spike.
Covin envisions drastic upgrades to the hotel's approximately 107 rooms, a hipper casino and a minispa at the one-acre property.
Covin said the Spike would ultimately get a new management team of his choosing. Larry Woolf of the Navegante Group said when that happens, the property's estimated 140 employees would have opportunities at other casinos.
"We would place them where we have room I'm sure," Woolf said. "It would be quite some time before we have to address that."
The Gold Spike would be Covin's first project in Nevada. But it would be far from his first reclamation of a rundown hotel.
If he does take ownership it would likely be in the name of a limited liability company or LLC set up to do business in Nevada, Covin said.
According to a company profile of Gregg Covin Development, the firm is one of the top 10 residential developers in Florida with more than $150 million in sales in 2006.
Covin developed Ten Museum Park, a 50-story crystalline tower that's credited with reviving the hip condo market in Miami. The market has since declined after other developers jumped in en masse, but Covin told the New York Times in May the project has no shortage of buyers.
The Angler's Boutique Resort condo hotel in Miami Beach is another Covin project. The historic hotel was built in 1930 but eventually fell into disrepair.
The revival of the site is scheduled to be complete this fall and includes hotel design by the designer of the Versace Mansion. The project won the Dade Heritage Award for Historic Preservation.
He expects a similar upscale revival at the Gold Spike in Las Vegas.
"We are looking to reposition and rebrand it as a chic, boutique hotel," Covin said. "That is what we do."