Eddie Haddad is seen Thursday in front of the sales center for his project HUE Lofts. Haddad said he supports Las Vegas Mayor Oscar Goodman's effort to curtail "flipping," or the quick resale of land. Photo by Isaac Brekken/Review-Journal

Las Vegas Mayor Oscar Goodman said he isn't concerned about whether or not New York investors Barnet Lieberman and David Mitchell actually develop the five square blocks they purchased in downtown Las Vegas earlier this year for about $100 million.

They got the land entitled for a "live-work" project that includes a 25-story, 280-unit condominium tower, three stories of multifamily residential and more than 300,000 square feet of office space.

Goodman acknowledged that the investors could easily sell the land for a handsome profit, called "flipping," and said that's how America's free-market enterprise system works. Nobody can force them to build, he said.

With several downtown high-rise projects stalled and some 15,000 condo units approved, Goodman now wants to limit entitlements to one year. The developer would have to report back to the City Council at that time to show they're "making progress," he said.

"Yeah, I can't make them build, but I can take away their entitlements," Goodman said.

Eddie Haddad, developer of HUE Lofts at Charleston Boulevard and Casino Center Drive, said he absolutely supports the mayor's effort to curtail flipping, which has partly contributed to downtown land prices quadrupling in the last few years.

The downtown market was $50 a square foot in early 2004 and is now approaching $220 a square foot, or roughly $9.6 million an acre, broker Cait Messina of XYZ Properties said. Lieberman and Mitchell paid about $7 million an acre in the area bounded by Main Street, Garces Avenue, Casino Center and Clark Avenue.

Putting a time line on construction isn't the solution, Haddad said.

"People don't understand what goes into the development process. It takes a year. Forget about construction price increases. That's only part of it," he said. "Conceptual design, entitlements, schematics, blueprints, construction documents ... there's no way you can go through this process on a 700,000-square-foot building in one year. It's impossible."

While Haddad wants to stop the flipping, he does not favor a policy that would undermine the development process. He suggests giving a two-year entitlement to any developer who qualifies by presenting plans that meet requirements of the Downtown Centennial plan.

If building permits aren't pulled within the two-year period, the entitlement would not be valid, he said. To get building permits, a developer would need to be finished with the greater portion of his construction documents, or blueprints of mechanical, electrical and plumbing systems.

"To make sense as a viable business model, where a land flipper purchases land, entitles it and then resells it, a land flipper would need a market where entitlements are hard to come by. And since any Joe, Dick and Harry can get an entitlement in the downtown area, I question this as a good business strategy from the onset," Haddad said.

Developers who try to get extensions by modifying or amending the plan would have to clearly show advancement in the plans, depending on the stage, Haddad said.

Downtown condo projects such as Club Renaissance, Sandhurst and Cielo Vista have been in the works for more than a year and have yet to begin construction. Others such as Aquitania, Gateway, Evolution and Wall Street Towers were announced this year.

"Progress means a lot of things," Goodman said. "It could be financing, presales or other deals with the public or private sector."

Debi Averett of Housingdoom.com, a Phoenix-based Web site, said she agrees with another downtown developer who said flippers drive up the price of land, thereby stifling development. Giving government more control is not always welcome either, she said.

"I'm concerned that shortening the time limit on permits may not achieve what the mayor intended," Averett said. "I hope Mayor Goodman reconsiders his position on this measure and looks at other ways to address excessive land speculation. This measure looks more likely to hinder development."

The mayor should not try to speed development of high-rise projects, she said. Developers have been acting responsibly by slowing down and responding to market forces.

There's already a surplus of condominiums in the Las Vegas market, Averett said. Data from the Greater Las Vegas Association of Realtors show an upward trend of listings versus sales of condos in the resale market since 2002.

This suggests that the market is unable to absorb units as they come online and that the situation is deteriorating, she said. Housingdoom has posted several Web logs about the rising inventory of homes in Las Vegas and its potential negative effect.

These same issues, to a large extent, are affecting the high-rise market as well, Averett said.

"Las Vegas is an exciting city known and loved the world over," she said. "The passion that Las Vegas generates, however, can be to its detriment if growth is not managed properly. Investors and speculators, in their anxiousness to be a part of the Las Vegas scene, have brought more units to the market than it can efficiently absorb at this time."

When there is an oversupply of developed units, every additional unit produced cheapens the value of the existing supply, Averett said. A policy of demanding that units be rushed onto the market would be detrimental to the local economy, she added.

"Too many developers in the last few years adopted the attitude of 'build it and they will come' without consideration to underlying market demand," she said. "Now developers are trying to shift rapidly from that model to one of more sustainable growth."

Haddad also wants the developer to show a strategy of how he intends to bring "live bodies," actual primary residents, to the downtown area.

"Only when this goal is accomplished will success be measured," he said. "What kind of process can we have to weed out the bad apples and empower the good apples?"

Lastly, he would request that state legislators enact a law so that a high-rise developer cannot start selling units until the building permits are pulled.

Perhaps a better solution would be for the city to take a 10 percent or 15 percent share of profit on the land flip, Luxury Realty Group owner and broker Bruce Hiatt said. That's what Howard Hughes Corp. does when lots in The Ridges in the master-planned Summerlin community are bought and sold before a home is built within an established time limit, he said. The money could be used for parks and other improvements downtown.

"Developers now know the land, construction and marketing costs better than two years ago in order to sell a high-rise project," Hiatt said. "Major developers like Perini (Building) have publicly stated that construction costs are rising about 15 percent to 20 percent annually. I think the development costs are more predictable now than two years ago for experienced high-rise developers."