Developer still scarred from Las Vegas’ boom, bust

LAKE MARY, Fla. — When the real estate market was booming last decade, Florida developer Christopher DelGuidice set out, like so many others, to build a condo tower in Las Vegas. But he didn’t want just any old high-rise.

His project, Vegas 888, was supposed to have concierge service, butlers, poolside villas, steam rooms, glass stairs and a nightclub called The Whale Club.

And like so many other proposed towers from that era, his never came out of the ground, leaving a dirt lot that sold last year for a fraction of what he paid a dozen years earlier.

The founder of Del American Real Estate Group in Orlando, the 60-year-old DelGuidice was born in New York, lived in Puerto Rico from 9 to 18 because of his father’s construction career and graduated from Georgia Tech.

He ventured into Las Vegas’ real estate market in the early 2000s with Vegas Grand, a residential project at Flamingo Road and Swenson Street east of the Strip. He planned to construct five buildings, but in the end, he built one, was hit with a class-action lawsuit after he raised the sales prices and lost the property to foreclosure.

Vegas 888 would have been a 50-story tower at Flamingo and Valley View Boulevard, next to the Palms. DelGuidice — who acquired the 8.6-acre site for $50 million in 2004, property records show — opened a sales center but never built the tower and lost the land to foreclosure.

Both properties were seized by New York financial giant Lehman Brothers, which backed his projects and whose 2008 collapse helped trigger the U.S. financial crisis.

DelGuidice, who is still developing projects, but not in Las Vegas, sat down with the Las Vegas Review-Journal last month in Lake Mary, Florida, 20 miles north of Orlando.

What got you interested in developing real estate in Las Vegas?

I had frequently visited Las Vegas; my dad loved to gamble. We used to go there two, three times a year. Around 2001, I read an article about the city of Las Vegas — I didn’t know the boundaries at the time — which was in desperate need for apartments and was willing to contribute land and help developers with all kinds of concessions. I called my broker and told him to find out what they’ve got. Later, I told him to find something near the Strip. He came back with one site, which had been looked over because it had lots of hair on it — it was in the flight path, it had washes running through, it was zoned single-family.

Was that Vegas Grand?

Yeah. I initially went there to do apartments. I had the contract (for the site) on my desk. For some reason, I hesitated to sign it, and a day or two later, Sept. 11 happened. A few days later, I called my casino host at the Bellagio, and he said it’s a ghost town. A little bit of time passed, and things started to come back, so we put a contract on the property and got it rezoned and approved. As time kept going on, construction costs kept going up, but rents weren’t going up. The guy we hired to do a market study said, “Chris, why don’t you look to do condos?”

How were sales initially?

We did one sales event, and we took 54 reservations. I was somewhat in shock. We did another event; we got two ballrooms, chocolate fountains, models in body paint. We had elaborate parties. This is the time when everything was positive. It was 2004; sales were off the charts. We ended up taking over 800 reservations. Other projects started to get announced. They were coming out of the woodwork, one after the other after the other.

What did you think when you saw all the towers getting proposed and people talking about the ‘Manhattanization’ of Las Vegas?

I never liked the concept of the Manhattanization of Vegas. Manhattan has walkability; in Vegas, these hotels are monster-size, and it takes forever to walk from hotel to hotel. The walkability wasn’t there. But people wanted to build close to the hotels.

Why did you want to build a tower?

Most of the towers we saw had traditional architecture, and we felt that if we did something more modern, we would have an edge. We felt that the location we picked, you would have a view of the Strip. And we were trying to go above and beyond the typical condo project.

The project seemed like hyperopulence. Was that the idea you were going for?

Yes. We wanted to have as close as we could to a resort-hotel.

How many units did you pre-sell at 888?

Maybe 80, 90 units — about 20 percent of the building.

But you never closed any sales?

Right. What ended up happening was, there were two or three other major developers building projects in Las Vegas at the time, and all those deals were canceling. People started wondering: If nothing’s going to happen, why should I put a contract down? So our sales literally came to a halt when all those deals started canceling.

How easy was it to get Lehman financing for real estate projects at that time?

Lehman was smart, and if the market didn’t change, they would have made a ton of money. Lehman had simple rules they followed, but they were very quick and aggressive. The deal for 888 was done between myself and an individual at Lehman at the French restaurant at the top of the Palms, sitting at the bar. There was a group of us having dinner — people from Lehman and my team — then myself and the managing director, we went to the bar and talked. It was a logical deal to do. At the time, the market was booming; there was no end in sight for buyers. The price for the dirt was fair. The concept made sense.

What happened with Vegas Grand?

Our original construction costs were $86 million for all five buildings, but eventually, that rose to $290 million. We had a commitment from a bank, but one of its executives was in Las Vegas when a big rainstorm came through, and he saw construction equipment floating down the wash. When they pulled out — when you lose a bank commitment, other banks want to know why. One bank said the only way they could make it work is if I raised the prices. We originally were selling in the $200-per-square-foot range, but the market was now closer to $500. We went back to the customers and said we’ll give you some options: We’ll give your deposit back with interest, and 250 people decided to do that. Another option was, here are the new prices, but we’ll give you a 20 percent or 25 percent discount, and a number of people agreed to that. Then we had some people who cried foul and formed a class-action lawsuit.

What was the result of the lawsuit?

A retired federal judge came in as the mediator, and we negotiated a settlement. We paid the plaintiffs’ lawyers $500,000, and then there was going to be a percentage of sales that would go into a pot to be distributed.

How much did you eventually pay to the buyers as part of the settlement?

They got nothing. The property got foreclosed, and I got wiped out on the deal. Sales had basically come to a halt, and I told Lehman that we should sell the property. We actually had the property under contract to sell for, I believe, $75 million — Lehman would get all their money back, I would get all my money back, the class-action lawsuit people would get something. I got a call from my attorney the day before the buyers were supposed to put down a deposit, and he said they wanted a $5 million price cut. I called Lehman Brothers; they said no. They still felt bullish about it.

Would you ever build apartments or condos in Vegas again?

No. After you have a bad experience in a particular market with a particular product, your emotional side can’t get you back over the hurdle.

Contact Eli Segall at or 702-383-0342. Follow @eli_segall on Twitter.

Watch Ruthless! at Las Vegas Little Theatre
The musical Ruthless! will be playing at Las Vegas Little Theatre from July 13-29. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Cadaver art and sword swallowing at The Dark Arts Market
Curator Erin Emrie talks about her inspiration for The Dark Arts Market at Cornish Pasty Co. in Las Vegas Tuesday, July 10, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
'NO H8' Campaign comes to Las Vegas
Hundreds of locals participate in the NO H8 campaign founded by Adam Bouska and Jeff Parshley as a response to Proposition 8, a California ban on same-sex marriage. The campaign has since evolved to represent equal treatment for all. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
What to expect at Station Casinos' Fourth of July celebration
Station Casinos' is hosting its annual 4th of July celebration with Fireworks by Grucci. Fireworks scheduled to go off on Wednesday, July 4 around 9 p.m. at Green Valley Ranch Resort, Red Rock Resort, Fiesta Rancho and Texas Station. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Star Wars and Golden Knights mashup at downtown art shop
Star Wars and Vegas Golden Knights fans attend the Boba Fett Golden Knight Paint Class at The Bubblegum Gallery in Las Vegas, Friday, June 29, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Tourists and locals enjoy Independence Day fireworks at Caesars Palace
Hundreds of tourists and locals gaze at the Independence Day fireworks show at Caesars Palace on Saturday, June 30, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Clark County recount votes in commission’s District E primary
Clark County staff begin the recount requested by candidate Marco Hernandez in the democratic primary for the County Commission's District E seat on Tuesday, June 26, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Long-running local hip hop producer wants Vegas rappers to shine
Las Vegas Hip Hop producer and co-owner of Digital Insight Recording Studios Tiger Stylz reflects on 30 years of music production in the city. (Marcus Villagran/Review-Journal) @brokejournalist
"Pawn Stars" fans visit Richard Harrison's memorial at Gold & Silver Pawn
"Pawn Stars" fans from around the world visit the Gold & Silver Pawn Shop in Las Vegas following the passing of Richard "Old Man" Harrison on Monday, June 25, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Construction for new 51s ballpark underway
New home of the Las Vegas 51s is planned to be finished by March 2019 in Summerlin according to team president Don Logan. (Marcus Villagran/Review-Journal) @brokejournalist
Underground home was built as Cold War-era hideaway
The underground house at 3970 Spencer Street is one of the valley’s most unusual homes built 26 feet underground in 1978 by Girard “Jerry” B. Henderson, who, planned to survive the end of the world there.
Lip Smacking Foodie Tours takes you where the locals go
Donald Contursi talks about Lip Smacking Foodie Tours, which offers walking tours of restaurants on and off Las Vegas Boulevard with food samples and tidbits of history about the places they visit.
Bump stock manufacturers under fire
The Justice Department said last month that it had started the process to amend federal firearms regulations to clarify that federal law defines bump stocks as machine guns.
Art Bell’s Top 10 Shows
A selection of radio host Art Bell’s most popular shows.
Longtime Las Vegas attorney John Momot dies at age 74
Criminal defense attorney John Momot, who represented mob figures and even played himself in the movie “Casino,” has died.
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas union members voting to authorize the right to strike
Thousands of Las Vegas union members voting Tuesday morning to authorize the right to strike. A “yes” vote would give the union negotiating committee the power to call a strike anytime after June 1 at the resorts that fail to reach an agreement. (Todd Prince/Las Vegas Review-Journal)
Small businesses struggle to find qualified candidates
A 2018 survey found that over two-thirds of small businesses in Nevada find it somewhat to very difficult to recruit qualified candidates. Bailey Schulz/Las Vegas Review-Journal
Nevada secretary of state website offers little protection against fraudulent business filings
Property developer Andy Pham tells how control of his business was easily seized by another person using the secretary of state website.
Caesars may be going solo in its marijuana policy
Several Southern Nevada casino companies aren’t following Caesars Entertainment’s lead on marijuana testing.
How much is the Lucky Dragon worth?
Less than a year-and-a-half after it opened, the Lucky Dragon was in bankruptcy.
Gyms and discount stores take over empty retail spaces
Grocery stores used to draw people to shopping centers. But many large retail spaces have been vacant since 2008. Discount stores like goodwill and gyms like EOS Fitness are filling those empty spaces, and helping to draw shoppers back in. K.M. Cannon/Las Vegas Review-Journal
Funding source of Las Vegas stadium for the Raiders is sound, expert says
The stadium is funded in part by $750 million of room taxes, the biggest such tax subsidy ever for a professional sports stadium. Robert Lang, executive director of Brookings Mountain West and The Lincy Institute at UNLV, says that is a good use of public funds. (Richard Velotta/Las Vegas Review-Journal)
Las Vegas needs light rail, expert says
Robert Lang, executive director of Brookings Mountain West and the Lincy Institute said he is afraid of a "congestion mobility crisis." Las Vegas needs a light rail system, he said, to accommodate the city's growing number of attractions. (Richard Velotta/Las Vegas Review-Journal)
Three takeaways from Wynn Resorts' Earnings Call
Matt Maddox came out swinging in his first earnings conference call as Wynn Resorts chief executive officer, boasting of record Las Vegas quarterly revenues and applicants lining up for work.
Star Wars VR Comes to Las Vegas
Sneak peak at the new "Star Wars: Secrets of the Empire" VR experience at the Grand Canal Shoppes.
Elaine Wynn continues her fight to change Wynn Resorts board
Elaine Wynn, the largest shareholder of Wynn Resorts Ltd., is seeking to kick a friend of her ex-husband Steve Wynn off the company’s board of directors. (Todd Prince/Las Vegas Review-Journal)
Zillow is getting into house flipping in Las Vegas
Las Vegas Review-Journal real estate reporter Eli Segall says flipping houses has waned in popularity after the housing bubble burst.
Ellis Island Buys Mt. Charleston Lodge
Ellis Island, which operates a casino, brewery and hotel just off the Strip, purchased the Mt. Charleston Lodge in early April.
News Headlines
Add Event
Home Front Page Footer Listing
You May Like

You May Like