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LAS VEGAS-Bruce Langson’s apartment assets adjacent to the Las Vegas Convention Center likely will become a major hotel development instead of the condominium development originally planned. Langson tells GlobeSt.com that he has received “strong interest” from multiple large, well-known hotel operators, has an offer for construction financing and is beginning its search for development partners experienced in hospitality sector.

The good news follows a string of bad news for Langson with regard to the five-acre site, which a creditor attempted to force Langson to sell last year after the condo market disappeared. A $25.5-million bridge loan from California Mortgage & Realty gave Langson a year’s worth of breathing room to put together the hotel project, which he says can be done within the walls of the existing two-tower design for the would-have-been condominium development, saving money on the redesign.

“While we were considering our options the Las Vegas Convention Center announced plans to invest $1.4 billion in their facility, which will include moving the entrance to within 300 feet of our site and widening the street we are on, which is what generated the interest from hotel operators,” Langson says. “It just doesn’t get any better than that.”

Langson originally planned to redevelop the property beginning in 2005. The entitled $400-million project called for two 47-story high-rise residential buildings atop a multi-level retail podium. Then the Federal Aviation Administration, after giving preliminary approval, decided the design was too tall, forcing a redesign.

By the time the redesign to a shorter development was completed and approved more than a year later, almost all of the previous reservations had been pulled and money refunded, and the few that hadn’t pulled their reservations had their money returned because the units they had selected no longer existed.

“The FAA really hurt us,” Langson says. “We did the best we could and had good sales [the second time around] until everything died a year ago this last fall. From then on, if you used the words ‘condo’ and ‘high rise’ in the same paragraph with a lender they went into cardiac arrest.”

Shortly thereafter, Langson had a hard time covering the payments on $27 million of debt from Nevada State Bank and OneCap Mortgage that it had accumulated during the pre-development process. OneCap initiated foreclosure proceedings, which precipitated a bankruptcy filing by Nevada Towers, the LLC Langson formed for the project.

That’s when San Francisco-based California Mortgage & Realty came through with a $25.5-million debtor-in-possession loan that was approved and closed in just 13 days. The CMR financing paid off the first mortgage loan, paid down the second and took first position in repayment priority.

“It was a pure bridge loan situation where they were about to go to forced auction,” CMR’s director lending Greg Smith tells GlobeSt.com. “So we basically bought them 12 months to find a JV partner that could come in and give them liquidity and time to adapt to changing market demands.”

Now, instead of waiting for the condominium market to rebound, they are taking advantage of the convention market with plans for a new two-tower, 1,980-room hotel and a 105,000-sf retail/entertainment development next to one of the busiest and largest convention centers in the world.

“The bridge loan has allowed us to get ourselves reconfigured,” Langson says. “We are well along [in the pre-development process] now; we’ve had a meeting with the architecture firm we will be using and we are close to making a formal submittal for construction financing, which has been given tentative approval.”

The thought now is that the buildings as they were previously designed can be redesigned on the interior to conform to plans for hotel rooms. “It will actually simplify construction,” he says. “It’s much less complex as a hotel property.”

With the high end of the condo market still alive and well, Langson says current plans call for the top couple of floors of each building to hold penthouse condominiums, possibly 20 units averaging about 3,500 sf. Then again, he says, one buyer is looking at having a 14,000-sf unit.

The tiered retail promenade has been designed in the center of the overall proposed project, though the hotel operator will have an opportunity to suggest changes. A sought-after attribute of the retail is that the property has been granted the suitability determination by Clark County for up to a total of 41 limited gaming licenses.

“If you have the ability to wait, you can step in bad things and still have good things happen,” Langson says.

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