Some brokers are questioning the viability of some high-rise condominium projects, including Las Ramblas, a $3 billion project proposed by actor George Clooney and nightclub operator Rande Gerber with Las Vegas-based Centra Properties and Related Las Vegas. Officials from Related Las Vegas say the project will proceed as planned. Photo by The Associated Press.

The frenzy of high-rise condominium development in Las Vegas has fizzled and sales have slowed, largely because of escalating construction costs, an executive with Related Cos. said Thursday.

Local brokers and real estate experts are questioning the reality of projects that have reported robust reservations and presales, but have yet to break ground.

Projects that local and international brokers list as perhaps not being viable include Icon, Las Ramblas, 888 and Bella Venezia at Vegas Grand, one high-rise developer said.

"Icon is on the ropes. Brokers in the market are nervous and there are rumblings about the project not getting built due to high construction costs," said the developer, who requested anonymity. "Related made the contractor market angry in Vegas with their regal attitude and got killed on pricing. I can personally confirm that Related wants to exit the market, which means Las Ramblas is (dead on arrival)."

Not so, says Marty Burger, president of Related Las Vegas, developer of the proposed twin Icon towers on Convention Center and a partner with Las Vegas-based Centra Properties in the $3.5 billion Las Ramblas project on Harmon Avenue.

"Rumblings are rumblings," he said. "I can tell you we're not shopping it (Icon). Has the sales market slowed? Yes, there's been a huge slowdown. Last January, they were selling 4,000 to 5,000 units and now it's 400 to 500. The market has changed considerably. In the meantime, construction costs have gone up. But we're not shopping around, absolutely not."

And Related is not pulling out of Las Vegas, Burger said, despite a failed agreement with the city of Las Vegas to develop the 61-acre downtown property.

Related is also a partner in the World Market Center downtown, which has begun construction of a $360 million second phase, and is trying to get Icon under construction, Burger said.

"It's a very difficult market with the price of construction, the price of labor and sales are down. What do you do, shoot yourself in the head or try to make it happen?"

Another project that broker Diann Tonnesen of Prudential Americana Realty is steering her clients clear of is Sandhurst, a 35-story, 398-unit luxury condo tower proposed near Grand Central Parkway and Charleston Boulevard.

It was supposed to have broken ground over the summer, but is still going through the final building approval process, developer Mike Mirolla said.

"The status is we're hoping to pull permits in early January," he said. "We made mistakes by projecting (construction) dates. Until you have a permit pulled, you can't tell. We're moving forward, but permits are taking a little longer than we thought. We had our full documents in with the city in May and here it is December. In September we were told to redesign the drainage. Now we go back to the engineers to redesign the drainage and that has to be approved. So we've learned a lot here."

Mirolla said UPA Group is doing preconstruction work for Sandhurst and he's analyzing construction documents. A guaranteed maximum price has been drafted, though he would neither specify the number nor identify a general contractor.

"I think sales in general have slowed. Buyers and brokers are concerned about the market and so are we," Mirolla said. "Our focus is to hopefully break ground. I think we're a couple of weeks away."

Ultimately, the market will determine the winners and losers here, said Reagan Silber of Edge Resorts, owner of the property for the proposed W Hotel on Harmon Avenue.

"It's a tale of two worlds. If you have a branded product like Steve Wynn, the Hard Rock (Hotel), the W, MGM, your project is going to get built and there's demand for it. If I'm standing out there with Reagan's condos, I don't like my chances. If I'm standing out there with W Hotel Worldwide, consumers know this is going to be a vibrant, ground-shaking resort in Vegas."

"The common theme through all of this is construction costs are so volatile that developers can no longer plan," said Victor Altomare, the Australian developer of Ivana Las Vegas.

"We sell at a given price and you find the (general contractor) and subcontractors have got so much work, particularly with projects like (Project) CityCenter. They've just bid up prices to the point developers say we'll mothball the project until there's stability in the market."

Altomare said the construction costs alone for Ivana total more than $400 million and he has to sell units for $1,200 to $1,400 per square foot to pay for "exorbitant" construction costs.

The 923-foot condo project, which has Federal Aviation Administration approval, is being listed for sale at $49 million and Altomare said he has a "very credible buyer" who wants to incorporate a hotel-casino into the project. To accommodate parking, the height of the project would have to be reduced or additional acreage around the site on the northeast corner of Las Vegas Boulevard and Sahara Avenue would have to be acquired.

"There's a lot of folks out there with a good idea, but it's the execution that's going to separate the men from the boys," said Bruce Weiner, an executive with Florida-based Turnberry Associates. "A number of projects are either down or they're being put up for sale. Las Vegas is kind of like a microcosm of construction. There aren't many contractors for the work going on and labor is tight, so the economics of supply and demand is what's happening. Maybe the investor side of the market is slowing down, I don't know."