LAS VEGAS-Marriott International on Thursday acknowledged its acquisition of nearly an entire block across from the Las Vegas Convention Center. Two-and-a-half months after GlobeSt.com broke the story, company EVP Arne Sorenson says the company has spent $230 million accumulating 16 acres across Paradise Road from the LVCC and is working on plans for a 3,500-room casino-resort with 500,000 sf of meeting space. The company hopes to start construction this time next year and open in the second half of 2011.

“We have a broad convention hotel network and Las Vegas is an important, high-demand group market where we are not adequately represented,” Sorenson said during the company's quarterly conference call. “We are working with a possible partner on a project and do not plan to build it on our balance sheet, nor do we expect to ultimately manage the casino.”

The properties are all located on the block bound by Convention Center Drive, Paradise Road, East Desert Inn Road and Debbie Reynolds Drive. Immediately to the west, across Paradise Road, is the Las Vegas Convention Center. Immediately to the south, across East Desert Inn Road, is the Wynn Las Vegas Golf Club.

Under the name MRC I Funding Corp., Marriott's buying spree began in December, when it paid $24.75 million for two parcels totaling 1.35 acres at the corner of Convention Center Drive and Paradise Road. In April, it acquired the bulk of the middle of the block, a 6.47-acre chunk touching Debbie Reynolds, Paradise and East Desert Inn that is home to a Residence Inn by Marriott, for $65 million.

In June, it picked up a .68-acre parcel fronting Debbie Reynolds Drive for $8.75 million. In August, it added two more key properties, paying $87.5 million for the Marriott Suites hotel that occupied 2.15 acres at the corner of Debbie Reynolds and Convention Center, and $43 million to buy back the 3.8-acre Courtyard by Marriott hotel at the corner of East Desert Inn and Paradise that it sold to Marcourt Investments in 1992.

The acquisitions leave only two properties on the block that it does not own, one of which it could still acquire. The property it could acquire is Piero's, a restaurant owned by Fred Glusman that sits on three .33-acre parcels fronting Convention Center Drive. The one parcel it cannot acquire is Metropolis, a residential condominium development at the corner of East Desert Inn and Debbie Reynolds.

Marriott's plans for the block are expected to prompt Colony Capital to accelerate plans for a major renovation or redevelopment of the 3,174-room Las Vegas Hilton that sits on the north side of the convention center. Colony acquired the 30-year-old property in 2004 for just $280 million, about one-tenth of what Steve Wynn would spend to build Wynn Las Vegas.

According to local industry sources and published reports, the tens of millions in cash flow the property throws off, combined with the lack of another large competitor within walking distance of the convention center, has kept Colony from doing anything heretofore. Lewis Shaw, whose Dallas-based development firm Jackson-Shaw owns a Marriott-branded property immediately south of the Convention Center, told GlobeSt.com last month that he expects Colony will follow through with its plans now that competition is on the horizon.

“The Hilton is a big hotel but it needs a massive amount of money to bring it up to date,” Shaw said. “They've had plans to do this and do that, but why shoot the cow when it's producing so much milk?”

Shaw said he had been in contact with Marriott International officials who are planning to develop the Convention Center site under its Marriott Marquis brand. Marriott Marquis is the company's upscale, convention-oriented business hotel brand. There are two others in existence, one in Times Square in New York City and another in Downtown Atlanta. The Times Square property has 49 floors, 1,892 rooms and 101,450 sf of meeting space. The Atlanta property has 50 floors, 1,569 rooms and 130,000 sf of meeting space.

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Marriott Reveals Vegas Convention Center Plans

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