Sometimes, it’s important to take stock to see where we’ve come from and where we’re headed.
But it’s also just fun to hear some rippin’ good yarns from the people who helped settle modern Las Vegas.
Longtime local developers Ed Nigro and John Midby treated attendees at a recent industry luncheon to a history of how deals got made here back in the day, and discussed what the city needs to do to continue its post-recession renewal.
Start with some background. Things were different in the 1960s and ’70s, when local businesspeople would sketch out agreements on cocktail napkins and close them with a handshake.
Consider the time Nigro, who ran the Sahara in the 1970s, orchestrated a verbal five-year, $5 million deal with Johnny Carson to appear at the hotel. Or the time he bought the bankrupt Silver Nugget with $8 million in financing from Parry Thomas and Jerry Mack at Valley Bank — an agreement completed in less than two hours and on two pages of paper, but with one crucial element missing.
“They called me a few months later and told me, ‘By mistake, we didn’t get deeds of trust,’ ” Nigro told attendees at the Sept. 19 Commercial Alliance Las Vegas luncheon at the Gold Coast. “I said, ‘Send ’em over. We’ll sign them.’ That was how we did business. We paid our debts, we made our deals, and we all worked together.”
And then there were the challenges, pretty much unknown to today’s developers, of trying to do business with outsiders who believed that coming to Las Vegas meant cozying up to the Mafia.
“In the ’60s, ’70s and even the early ’80s, it was very difficult to get financing because there were concerns about the mob,” Midby said.
It was even difficult to get some businesses to come here.
Midby recalled working to bring the Sav-On pharmacy chain to town in the 1980s. The company’s real estate division called Midby to its office in Los Angeles for a conference with the chairman of the board.
“When we sat down, he asked us if we were associated with the mob,” he said. “They told us they’d wanted to come to Vegas for years, but they didn’t want to be incorporated into the mob. I told them they had a better chance of that happening in L.A.”
Sav-On decide to go ahead with a three-store deal that included longtime local developer Irwin Molasky.
But making deals work often required coming up with ideas to “circumvent” the capital shortage that often accompanied doing business here, Midby said.
Take Nigro’s involvement in Green Valley, Southern Nevada’s first master-planned community. The Greenspun family was ramping up development in 1987, and Nigro wanted in. He’d just gotten his contractor’s license and he spotted 12 acres within the master plan that would be the perfect first job.
“Brian Greenspun asked how I’d buy the land. I said, ‘Out of the profits,’ ” Nigro said. “He asked me what the split would be. I started at 70-30. We ended up at 60-40. He stuck out his hand, and that was it.
“They were desperate for builders. They must have been, because I wasn’t one. But we built 1,500 homes over the next 10 years, and it all started with a handshake.”
As different as the market is today, there are parallels to the development climate of 50 years ago.
When Midby arrived in 1963, the city had fewer than 100,000 people, but its builders had been on a construction binge.
The town had 18,000 vacant apartments, and 16,000 empty houses. It took Howard Hughes snapping up local properties, including the land that would become Summerlin, to “energize” the market in the late 1960s, Midby said.
“Vegas has always been a very dynamic market, and it’s always evolving,” he said. “Vegas should always evolve. We don’t have a monopoly (on gaming) anymore. We need new ideas and ways of marketing, and we need to support innovators. We need to push (UNLV) to be innovative.”
Nigro said the recent recession brought a “devastation we have not seen since the Great Depression,” with land values falling 80 percent in the downturn.
But he added that local banks today are well-capitalized, and he said he’s “really optimistic” that commercial developers will see financing loosen up going forward.
Commercial group honors Rosenstein
The Commercial Alliance Las Vegas has named Tedd Rosenstein its Member of the Year for 2014.
Alliance President Hayim Mizrachi said the organization honored Rosenstein for his years of volunteer work on behalf of the group, as well as for “demonstrating outstanding leadership, dedication and service.”
Rosenstein, president of Nevada Development and Realty Co., has more than 24 years of experience in local commercial real estate. He’s a graduate of Clark High School, Occidental College in Los Angeles and Boston University.
Contact reporter Jennifer Robison at firstname.lastname@example.org. Follow @J_Robison1 on Twitter.