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LAS VEGAS-Eighteen months ago, like many other commercial real estate projects, the World Jewelry Center seemed imminent. The City Council has just approved the disposition and development agreement, the site development plan and a special use permit related for the 1.2 million-square-foot high-rise development, giving developer Robert Zarnegin all the entitlements necessary to proceed. The only remaining hurdle was project financing, a hurdle that rapidly became insurmountable amid what would become the worst recession since the Great Depression. The estimated $1-billion project was put on ice at the beginning of this year.

Now, the City’s head of redevelopment Scott Adams tells GlobeSt.com that the developer, Heritage-Nevada VIII LLC, an entity of Zarnegin’s Beverly Hills, CA-based real estate company Probity International Corp., will gain several more years to live up to the disposition and development agreement, which called for the LLC to acquire the six-acre site from the city this month for $10.33 million. The development — 815,000 square feet of commercial condos and 139,000 square feet of residential condos in a 50-plus-story tower next to 225,000 square feet of retail jewelry shops and structured parking – was to break ground this October or next and help anchor the city’s 60-acre, 10 million-square-foot Union Park redevelopment, which is now called Symphony Park.

“We are proceeding with an extension of our agreement with the World Jewelry Center to August 2015, a six year extension,” Adams tells GlobeSt.com. “It gives them the time they need to restructure the project, possibly into phases, and at the same time recognizes and is responsive to what’s going on in the underlying real estate economy and the difficult time developers are having in financing projects.”

The DDA called for Heritage-Nevada VIII to acquire the 5.9-acre site for the project from the city by August 2009 for approximately $40 per square foot and to commence construction by October 2009, though it could have used two six-month extensions to push that deadline back to October 2010. That deadline is now August 2015.

The project’s day-to-day manager before it was put on ice was Bill Boyajian, a past president of the Gemological Institute of America who owns his own consulting company. Boyajian was not available Monday for comment, and neither was Zarnegin, but a source familiar with the project says is Boyajian is helping keep the project alive until the market turns. When the DDA was approved in approved in January 2008, Boyajian told GlobeSt.com that had letters of intent for about one-third of the office space.

The LOIs came from domestic and international gem and jewelry companies who Boyajian said liked the project’s Foreign Trade Zone status and plans for gem grading labs, educational facilities, advanced security systems, and secure shipping and receiving processes. The residential units had not yet been marketed for sale.

“Our 2008 will be about signing up more buyers; there will be a lot of travel for us this year,” Boyajian told GlobeSt.com in January 2008. “We’ll be attending 25 different jewelry trade shows around the world, getting the name out there. There are about 15,000 to 20,000 jewelry manufacturers and dealers around the world and our building will hold between 400 and 500 of them. Robert [Zarnegin] is very confident.”"

The development site is located near South Grand Central Parkway, West Charleston Boulevard and Interstate 15. Other Symphony Park projects that were under way or moving forward 18 months ago included the Lou Ruvo Brain Institute, the Smith Center for the Performing Arts, the Charlie Palmer Hotel, the Access Medical-Kimpton Hotel medical office and hotel campus, and a 2.4-million-square-foot hotel-casino by Forest City Enterprises.

Adams tells GlobeSt.com that the brain institute, now known as the Cleveland Clinic Ruvo Center for Brain Health, is nearly complete, he adds, and the performing arts center is under construction, with the foundation having been poured and steel coming out of the ground. Plans for the center include a total of three theaters including a 2,050-seat main hall that will be home to Nevada Ballet Theatre, the Las Vegas Philharmonic and touring Broadway shows.

The timing of the Charlie Palmer Hotel is tied to the completion of the performing arts center, he says, which gives that project some time yet to perform under the current agreement. Information on the Access Medical-Kimpton Hotels project and Forest City Enterprises’ hotel-casino project was not immediately available; it is not mentioned in the latest Symphony Park marketing brochure. Adams says that the credit markets will need to be fixed before any of these bigger projects can move forward.

The Symphony Park master plan calls for 10 million square feet of development. In support of Symphony Park’s master developer Newland Communities and all of the individual project developers, Adams says the city went ahead and completed all infrastructure work for the southern half of the development – the roads, the underground and off-site utilities. “We believe getting all this in the ground will create more confidence and enhance their ability to get financing,” Adams says.

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