By ELI SEGALL
LAS VEGAS REVIEW-JOURNAL
Hotel mogul Gary Tharaldson, a decade after selling $1 billion worth of properties, is building another burst of hotels in Las Vegas and other cities across the country.
The North Dakota developer is constructing a six-story, 169-room Hilton Garden Inn and a six-story, 157-room Homewood Suites on Dean Martin Drive near Harmon Avenue, just south of condo complex Panorama Towers. He also filed plans to build a five-story, 113-room TownePlace Suites and a five-story, 135-room Home2 Suites at the Tropicana Avenue-Interstate 15 interchange, across the street from In-N-Out Burger where the now-demolished Golden Palm hotel stood, Clark County records show.
The projects — located a half-mile from each other — follow his opening this year of a four-story, 131-room Residence Inn about 3 miles south of the Strip, his first new hotel in Las Vegas since last decade. Tharaldson’s projects are not in the famed casino corridor, although they’re not far away, and would be nothing like the towering megaresorts on the Strip. But small, nongaming hotels appeal to many people, real estate pros say, and Tharaldson is building more amid rising visitor levels and room rates.
Don Cape, director of real estate development for Tharaldson Hospitality, said the company expects to open the hotels near Panorama in late summer and those near In-N-Out in the first quarter of 2018. He said the company’s hotels in Las Vegas typically are at least 90 percent occupied, and there is “definitely a convenience factor” at them for people who drive, as guests don’t have to deal with massive garages or a long walk to their room. “And we don’t charge for parking,” he said, a nod to casino operators on the Strip now yanking away that longstanding freebie. Tharaldson, who has built several hotels in Las Vegas and made other real estate investments here, now plans to build 15 hotels a year for the next three years across the country, Cape said.
Such hotels don’t have the rowdy image or other trappings of a flashy Las Vegas resort. But business travelers and other guests can collect reward points, as the hotels fall under such brands as Hilton or Marriott, whose names also offer a sense of familiarity, said broker Michael Parks of CBRE Group’s global gaming group.
The properties also are significantly smaller than Las Vegas’ supersized resorts, making it easier and faster to get in and out, said Josh Smith, vice president of brokerage firm Sun Commercial Real Estate’s hospitality division. “There are a lot of reasons why you wouldn’t want to stay on the Strip,” Las Vegas broker and investor Christopher Beavor said.
Beavor of CAI Investments bought a vacant 8.6-acre parcel next to the Palms, a mile west of the Strip, in late September for $13.5 million. His development plans include a 15- to 20-story hotel — a nongaming, nonsmoking property with a national brand name and, “good oxygen pumping through the air,” he says. Tourism is the bedrock of Las Vegas’ economy, and there is no shortage of places to stay. Still, visitor levels are on the upswing. A record 42.3 million people visited Las Vegas in 2015, and 36.2 million visited this year through October, up 1.6 percent from the same 10-month period last year. Also, the average daily room rate through October was $127.08, up 4.3 percent from same-period 2015, according to Las Vegas Convention and Visitors Authority data.
Tharaldson, 71, was raised in a tiny North Dakota farming town and worked as a physical education teacher and insurance salesman before he bought a Super 8 motel in 1982, according to Forbes magazine. He has owned more than 350 hotels across the country, according to his company’s website, and Forbes says he’s the richest person in North Dakota, with a net worth of $980 million. He cashed in during the bubble years when Wall Street powerhouse Goldman Sachs’ real estate investment wing Whitehall bought 130 of his hotels for $1.2 billion in 2006. Four were at Russell Road and I-15 in Las Vegas, Cape said, although Tharaldson has been involved in other deals here.
According to reports, in 2005 he teamed with Centex Destination Properties, part of former homebuilder Centex Corp., to buy the Westward Ho hotel on the Strip – a now-vacant site just south of Circus Circus – for $145.5 million. He later bought out Centex and sold the property; according to Forbes, he booked a $109 million profit on the deal. He also reportedly had an ownership stake in Urban Village Las Vegas, a planned 50-acre, $1.5 billion residential and commercial project at Las Vegas Boulevard and Pyle Avenue. But the project, by Centex, never materialized, and Tharaldson still owns a 29.5-acre chunk of the site, according to property records and a person familiar with the matter. Big plans at his current hotel-construction sites also fizzled out.
Marvin Lipschultz, who owns the Tropicana/I-15 parcel and is leasing it to Tharaldson, wanted to replace the Golden Palm with a 41-story resort dubbed One Trop, amid the bubble era’s high-rise craze known as the “Manhattanization” of Las Vegas. Appraisers in 2006 valued Lipschultz’s 3-acre site at almost $46.6 million, a bloated figure that would be all but impossible to fetch today. “At the time, people were just buying anything and bidding it up,” he said this week. Like dozens of other proposed towers from that era, One Trop never left the drawing board. Lipschultz said he closed the Golden Palm in 2007 and never reopened it, and Cape said his company started demolishing it in late October.