Land deal ‘like herding cats’

Before the $9.5 billion arena plan, the wealthy investors, the ties to NBA franchises, there were a couple of high school dropouts with a vision.

About 3 1/2 years ago, Tom Prato, owner of Artistic Ironworks, was watching Mayor Oscar Goodman's downtown cheerleading on the city's television station and bought into the hype.

Prato came up with the idea to get scores of downtown property owners in an industrial area south of Charleston Boulevard to join together and collectively sell their land to a single developer.

"Even my friends said, 'Tom has lost it. He's whacked out,'" Prato said.

But Prato and land broker Robert Reel knocked on doors, made phone calls and took owners to lunch.

They even flew to Florida to do a shot of tequila on the beach with a couple of skeptical sisters who had inherited land from their father.

"It was like herding cats," Prato said of getting people to agree to the deal.

Now, REI Neon, with its lofty plans for an arena, casinos, hotels and retail, is scheduled to close escrow on the land as early as September.

Goodman said when he first heard of what Prato and Reel were trying to do, he thought they were joking.

"What they have done is nothing short of a miracle," Goodman said. "It should be taught in every business school in America."

In their sparse office on Sahara Avenue, near Decatur Boulevard, last week, Prato and Reel took out a map of their original goal, a printout of 112 parcels, making up a 56-acre trapezoid bordered by Charleston to the north, Wyoming Avenue to the south, Main Street to the east and the railroad tracks to the west.

After they would secure an agreement to sell from a property owner, Prato and Reel would take an orange pencil and shade in the parcel on the map.

"We'd high-five when we'd mark part of it off," said Prato, a Vietnam veteran approaching 60.

"It was disheartening at times; it was rewarding at times," said Reel, 43, who dropped out of Rancho High School, graduated from night school and is now a land broker.

The deals the 80 or so downtown property owners signed were an agreement to sell the property to a third party.

Prato, president of TR Las Vegas, and Reel, the firm's chief executive officer, sent out 3,000 DVDs with the sales pitch to possible purchasers of the assembled land.

They received 25 legitimate bids and selected REI last year. Terms of the purchase are confidential, Prato and Reel said.

Prato and Reel later helped REI secure an additional 30 acres for their project.

Usually, large urban redevelopment projects have been done by public agencies, often using eminent domain, said Joe Schilling, an assistant research professor at Virginia Tech and expert on urban land deals.

"The fact that this has been ... all driven by private investors does make it a creative adaptation of the entrepreneurial spirit," Schilling said.

Developers and land brokers often try to unite land owners to do one large project, like a housing development or high-rise condominium, said Jeremy Aguero of consulting firm Applied Analysis.

"There's been nothing of this size in Southern Nevada, particularly in developed areas," said Aguero, whose firm has been hired as a consultant to REI. "The road to missed opportunity is hidden by things people believe are impossible. They've gone a long way to pulling it off."

Gene Krause has owned a downtown food distribution business with his wife Marcia for about 40 years.

When he was first approached by Prato and Reel, Krause said he immediately bought into the idea of selling his 3 1/2 acres.

"We're pretty excited about this," he said.

But he's not celebrating yet.

"It's like the third quarter of a football game, when your team is up by 10 points," he said. "I've seen that reversed. But I'm optimistic."

Among the most significant obstacles is a hearing scheduled for Wednesday challenging the city's decision to allow gaming in the area.

Attorney Chuck Gardner said the city and REI did not prove that the expansion of gambling to the area wouldn't significantly hurt the area.

Prato becomes passionate when talking about the improvements the project could bring to the area.

As he sees it, this parcel would be the northern extension of the Strip, connecting the fabled stretch of Las Vegas Boulevard with the city's 61-acre Union Park and the World Market Center.

That, in turn, connects with the Fremont Street Experience and the downtown gambling core.

"This would change the face of Las Vegas," he said. "This is a city that needs to reinvent itself."

Goodman says the REI project would be a "miracle" if it happens. But, he said, "This is a town that was founded on miracles."