Covin is currently conducting due diligence and, assuming everything checks out, should close on the property in November, by which time he expects to have landed some local money partners. From there, he plans to invest an additional $10 million transforming the property into a boutique property.

"We're going to go right into renovations and completely rebrand it," he says. "At $150 a night on the weekends, I think a high-design boutique hotel is going to be attractive compared to $600 at the Wynn or $300 at the Venetian."

Developed in the early 1980s, the Gold Spike is located at 400 E. Ogden, one block off the Fremont Street Experience, a pedestrian-only, canopy-covered entertainment corridor that is home to several hotel-casinos, the Neonopolis retail and entertainment center. Videos and laser light shows frequently illuminate the canopy.

The Fremont Street Experience is the low-budget alternative to the Strip, which is losing its mid-priced component in favor of new development. Despite some new development, including a new condominium tower, the area beyond the canopy is known for even lower prices and is often described by old timers as the grittier, old school Vegas.

"I think the Downtown market is ready for a boutique hotel; a boutique hotel belongs in a gritty area with character," says Covin, explaining that the original Ian Schrager boutique hotels went into rough areas and helped reinvigorate them. "I'm focused on making my property an oasis."

Covin owns Covin Development. The company's projects include the 50-story Ten Museum Park condominium tower in Downtown Miami; Angler's Boutique resort, a four-star condo hotel in South Beach; and Hotel St. Augustine, a 24-room boutique hotel also in South Beach that he sold in 2000. The latter two properties were historic structures that Covin repositioned.