The City Council on Wednesday entered an agreement with a developer that wants to make Las Vegas a hub for international jewelry companies, but local retailers say the project faces high hurdles.

Council members voted unanimously to enter into an exclusive negotiating agreement with a Probity International Corp. affiliate. The deal would last for up to 18 months.

They also defended the below-market land price that was negotiated.

"We pushed the envelope on the project to get the maximum (price) that we can," said Scott Adams, director of the city's Office of Business Development.

Robert Zarnegin, founder and chief executive officer of Probity International, said he wanted to bring corporate offices of jewelry and gem companies into a 40-story or higher tower to Union Park. The tower would include a large retail space open to the public, as well as secured space where wholesalers could buy directly from manufacturers.

Zarnegin said the World Jewelry Center's retail component would include up to 50 shops, most offering jewelry products. Exhibits would also be scattered throughout the site to educate shoppers on the history of jewelry, how gems are mined and how jewelry-related fashions have evolved over the ages.

Zarnegin said the key to his center's success involves offering the right mix of products to attract some of Las Vegas' nearly 40 million annual visitors. To that end, he hopes to lure several international jewelers who have yet to open retail stores in the United States.

"Product differentiation is number one," said Zarnegin. He said the center's cost has not been determined but would climb into the "hundreds of millions" dollar range.

A pair of longtime local jewelers said Wednesday such a market will face several big obstacles on the wholesale and retail fronts.

Many of the industry's manufacturers have left the United States to take advantage of inexpensive foreign labor. That offshore migration has hurt business at the established Los Angeles Jewelry District, said Joey Weinstein, whose family owns four local jewelry stores, including three under the Tower of Jewels brand.

In addition, Weinstein said retailers and manufacturers already conduct wholesale business at several big trade shows around the nation. Those include Las Vegas' popular JCK Show, which attracted nearly 3,000 exhibiting companies to the Sands Expo and Convention Center in early June.

"I don't think it's feasible," Weinstein said of a downtown jewelry mart.

Mordechai Yerushalmi, whose family-owned The Jewelers of Las Vegas operates 18 stores, said there aren't enough customers to support a jewelry mart's retail operations.

"If you go into any of the malls there are so many stores," Yerushalmi said. "Per capita, we have more jewelry stores than probably any other city in the country."

Weinstein agreed.

"There are plenty of strong jewelers" in Southern Nevada, he said. "Between The Jewelers and us, (M.J.) Christensen and one or two other companies, it's a tough market out there. Everybody's competing for the dollar."

But Aaron Lelah, whose family owns a single jewelry store near Flamingo Road and the Las Vegas Beltway, said he'd consider opening a second location in World Jewelry Center, regardless of nearby competitors.

"Marts draw people who want to buy jewelry," said Lelah, who is president of Aaron Lelah Jewelry. "When my family owned a store in the Meadows mall, we did well by being better than the next guy. "Competition is healthy. If you're better, you stand out in a crowd."

Yerushalmi, who's done business here since 1976, also doubts that a wholesale mart could thrive here, citing a failed past attempt to create such a market near the University of Nevada, Las Vegas. The Union Park site does not interest his company, he added, because The Jewelers already operates a large store at nearby 2400 Western Ave.

The jewelry center's business model is somewhat similar to that of World Market Center, a $2 billion furniture complex that is completing the second of eight planned buildings on its 57-acre downtown site.

World Market Center hosts biannual furniture showcases that draw manufacturers and dealers from around the world; unlike the proposed jewelry center, World Market Center's events aren't open to the public.

Spokeswoman Dana Pretner said Wednesday that World Market Center leaders know little about the jewelry center, though management there will monitor its new neighbor as the project evolves.

Three appraisals done in 2005 put Union Park's average land price at $48 per square foot. The city would sell the land at $40 per square foot, while picking up as much as $12 per square foot for environmental cleanup of the land.

Adams said city could recover much of that cleanup cost from Union Pacific Railroad, which owned the land and operated a rail yard on the 61 acres.

He said the development, with 500,000 square feet of office space and 100,000 square feet of retail space, would be a $500 million development.

He estimated it would bring 2,000 jobs to Las Vegas.

Mayor Oscar Goodman said Wednesday's approval of Probity International's agreement fits with leaders' vision of "a city within a city" at Union Park.

"We've been criticized that we're not developing quickly enough, but we want to do it right," said Goodman, who pointed to the jobs and diversifying the region's economy in defending the sale price of the land. "Sometimes money isn't the only object as far as the city is concerned," he said.