Construction workers finish a shift Feb. 17 at the Panorama Towers high-rise condominiums on Industrial Road. Laurence Hallier, the project's developer, said the high-rise condo market remains strong in Las Vegas even though some big-name projects have failed. Photo by Jane Kalinowsky.

Some people blame construction costs. Others point to lack of financing.

Paul Murad of Metroplex Development, which recently announced the Gateway Las Vegas high-rise condominium tower at Charleston Boulevard and Fourth Street, said marketing teams can't be ignored in the failure of several Las Vegas projects.

They've been too aggressive at putting the product up for sale early at prices that can't be justified when it comes time to deliver, he said. Vegas Grand and Icon are two examples.

That's why he and developers of other projects such as Pinnacle on Tropicana Avenue, Cielo Vista and Club Renaissance downtown and Las Vegas Central near Las Vegas Convention Center have decided to wait until they're deeper into the construction cost process before initiating sales.

Murad arranged private financing to acquire a half acre, currently the Charleston Plaza apartments, for $3.2 million. He plans to build a 39-story, 311-unit high rise on the property.

One of his first moves was to consult with Flagship Construction, a division of Detroit-based National Construction Enterprises, which is finishing $140 million of work for Clark County Aviation Department, including the A and B concourse renovations and a new high-tech baggage screening area.

"Obviously, when we look at doing a project, we want to go with one that's going forward," said Nancy Paolino, vice president of business development for Flagship. "We spent hours looking at different options, value engineering options, to see if we see something driving the price, material costs or whatever. We add soft costs (design and planning fees) and see if the job pencils. That's the bottom line. If it doesn't work, we tell them."

Michael Bellon, managing partner of Pinnacle, said these projects are part of the "third wave" of high-rise condo development to hit the Las Vegas market.

The first wave was Turnberry Place and Park Towers, regarded as the pioneers here in luxury high-rise, though Regency Tower at Las Vegas Country Club, built in 1974, was truly the first. The second wave followed with Metropolis, Panorama, Sky Las Vegas and SoHo Lofts.

The wave collapsed on some of the projects, including Krystal Sands, Aqua Blue and Ivana Las Vegas.

"Once people saw this was a viable possibility because of land prices, everybody came running in here with that irrational exuberance," Bellon said.

"Attrition began to happen. People who didn't plan their project carefully began to fall out. The third wave is projects that have waited, that stood the test of time and are being developed in the normal course of development instead of the insanity we had. People were throwing marketing dollars at a building before it was even designed," he said.

Years before local real estate experts and Wall Street analysts estimated that one-fourth to one-half of the planned 70,000 condo units would actually be built in Las Vegas, Turnberry's Jeff Soffer talked about previous projects that were announced but never built.

In a 1998 interview with the Review-Journal, he pointed out that plans had "gone sour" for the Great Masters, a 56-story tower proposed by developer Bruce Stark at Paradise Road and Karen Avenue, where Turnberry Towers is now under construction, and Versailles, three 12-story towers proposed by Canadian-based Taurus Development in the Queensridge community of Peccole Ranch.

Miami, Soffer's home turf, had experienced at least a 20 percent fallout of high-rise projects, he said.

Nearly 100 high-rise projects have been announced in Las Vegas. At least a dozen are complete or under construction and half a dozen have failed.

"It comes down to how much capital the developer has and how much experience the developer has," said Sam Cherry, developer of SoHo Lofts and Newport Lofts downtown. "You can have capital, but the bank wants experience. And it comes down to securing a general contractor. Those three things."

Marc Falcone, analyst for Deutsche Bank Securities in New York, said suspension of the $1.2 billion Hard Rock hotel expansion project could shift demand to other projects such as W Hotel, Cosmopolitan or The Residences at MGM. Hard Rock deposits had eclipsed $800 million, he said.

"Ultimately, we believe this reinforces our thesis that less than 30 percent of currently proposed high-rise residential projects will be built by the end of the decade," Falcone said.

Ryan Langson, whose family is developing Las Vegas Central, said construction costs can be calculated accurately, just not a year before signing the construction contract. Langson Development is working with Tutor-Saliba Construction to nail down a guaranteed maximum price on the 40-story, 1,000-unit Las Vegas Central.

"We are definitely waiting for accurate construction numbers to come out before we set our prices," Langson said. "It also means that the predevelopment cost is more expensive, since you have to wait longer before you can start your sales. The floor plans, site plans and building elevations that are needed to start sales can all be had months and months before the building plans and structure are developed enough for a general contractor to give you a good number. It is a very difficult timeline to manage."

Paolino of Flagship said the company's chief estimator is well-versed in high-rise construction.

"We know enough to project costs, but when you go 12 months out to turn dirt, you're going to have problems with escalation," she said. "Maybe the effort wasn't there on previous projects, the painstaking process of breaking the values down. We dissect the project before we give out a price. We have 40 pages of data and information on this (Gateway) project."

Flagship is also preparing preconstruction documents for Cielo Vista, a 27-story, 411-unit project planned by Seattle-based Northwest Resource Management Group on 2.8 acres at Veterans Memorial Drive and Washington Avenue.

"We're getting close to a number and we think it's real," said Eric Radovich, managing director of public relations and marketing for Northwest Resource.

Cielo Vista took more than 300 reservations at $5,000 each in the first three months after the project was announced last year before cutting off sales, though some deposits have been refunded as the project was delayed by escalating construction costs.

Another 300 people have contacted the company about buying into the project without any further advertising, Radovich said.

"We didn't feel we could tell people truthfully what the product was going to cost and whether we can afford to build it," he said.

Extensive research, analysis and planning was done for Pinnacle to ensure buyers get what they want and expect, said Ron Snyder, managing director of Rise Realty.

Falcon Group, Pittsburgh-based developer of the $850 million Pinnacle, is making a significant investment in the tools, systems, procedures, technology and training used to sell 1,000 units, Snyder said.

"It helps the developer not only sell out the project, but profit handsomely, thereby making the risks worthwhile," he said.

Laurence Hallier, developer of Panorama Towers, the first of which is scheduled for completion this summer, said the Las Vegas high-rise market remains strong, despite the folding of several high-profile projects. He's closed more than $750 million in sales in his first two towers.

"There were a couple of factors that were huge for us," Hallier said.

"First, we were early to the market at a time when there were few high-rise projects. The other major factor for us is our view. Buyers know that the view is the most important component of high-rise living, even more than the price. A view of the Strip is like having an ocean or Central Park view."