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Las Vegas Land Deal: Family Earns $10,000 Daily from Vacant Strip Property
In an extraordinary Las Vegas real estate arrangement, a wealthy family is generating an estimated $10,000 per day in passive income from a vacant plot of land situated on the famed Las Vegas Strip. The Elardi family, former proprietors of the Frontier Hotel, demolished in prior years, reap substantial financial benefits from a 16-acre land parcel leased to Wynn Resorts, highlighting a unique trend in Las Vegas property development and land utilization.
Lucrative Land Lease on the Las Vegas Strip
The Elardi family, previously owners of the Frontier hotel, a landmark on the Las Vegas Strip before its demolition, continues to receive considerable profits from their 16-acre property. They lease this prime Las Vegas real estate to Wynn Resorts for an impressive $4 million annually, translating to over $10,000 each day.
Vacant Land Generates Millions
Despite its prime location, the expansive land parcel remains undeveloped. According to reports from the Las Vegas Review-Journal, Wynn Resorts not only pays the hefty lease but also covers the significant property taxes associated with the vacant lot.
Decades of Unused Potential
This financially advantageous agreement has been in place for more than two decades. Numerous unsuccessful attempts have been made to develop the 16-acre site, yet the land has remained unused. Consequently, the Elardi family consistently collects substantial lease payments from the barren property, a distinctive situation within Sin City’s competitive real estate market.
Trend of Land Leasing on the Las Vegas Strip
This unusual arrangement reflects an increasing trend on the Las Vegas Strip. Landowners are leasing properties to developers for considerable sums, even when the land remains undeveloped, indicating a shift in Las Vegas property investment strategies.
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Real Estate Experts Weigh In
Michael Parks, a hotel-casino specialist with CBRE Group, a real estate brokerage firm, commented on this trend. Parks, who has extensive experience with deals on and near Las Vegas Boulevard, stated to the LVRJ, “It is a little surprising that you don’t see more,” referencing the prevalence of such leasing arrangements.
Uncertainty Surrounds Elardi Family’s Strategy
Parks expressed uncertainty regarding the Elardi family’s decision to retain ownership of the undeveloped portion of their site following the Frontier hotel’s sale in the 1990s. He noted that despite attempts to connect prospective buyers with the family over the years, he has received no response, as reported by the LVRJ.
Elardi Family Remains Silent
The Elardi family, who also own the Casino Royal on the Strip, have not issued any public statements regarding their lucrative land lease agreement. Their continued profiting from the vacant land remains a topic of discussion in Las Vegas real estate circles.
Wynn Resorts’ Development Plans
Wynn Resorts has acknowledged their interest in potentially developing the leased land in the future. However, Craig Billings, CEO of the luxury resort and casino company, indicated that their current focus is directed towards other ventures, including a resort project in the United Arab Emirates.
Prioritizing Current Projects
During an earnings call, Billings explained, “We obviously have a very substantial land bank here in Las Vegas. So, we have years and years and years of growth ahead of us.” He addressed frequent inquiries about the lack of progress on the Las Vegas Strip property, stating, “The reality is that from a capital perspective, from a bandwidth perspective, within our amazing design and development team, there are only so many things, frankly, that one can do at once.”
Strategic Expansion
Billings further elaborated on the company’s strategic approach, “And then, of course, there are opportunities that come along that are timed out you want to make sure that you’re in a position to participate.” This suggests that Wynn Resorts is carefully prioritizing its development projects and considering future opportunities as they arise in the dynamic Las Vegas market.
Elardi Family History in Las Vegas
Margaret Elardi, a prominent figure in Las Vegas casino history, acquired the Frontier hotel and the adjacent Silver Slipper property in 1988. She had previously owned a casino in downtown Las Vegas and another in Laughlin.
“Grand Dame with Brass Knuckles”
Forbes magazine described Margaret Elardi, who passed away in 2021, as a “grand dame with brass knuckles,” reflecting her assertive business approach. She made the decision to demolish the Silver Slipper, converting the space into a parking area for the Frontier hotel.
Labor Dispute at the Frontier Hotel
During Elardi’s ownership of the Frontier, the Culinary Union reported a protracted six-year-long strike. Workers protested compensation and benefit reductions through a continuous 24/7 picket line. Over 500 employees participated in demonstrations outside the luxury hotel, marking a significant labor dispute in Las Vegas history.
Resolution and Sale of the Frontier
The strike, documented as the longest ongoing labor dispute in the nation at the time, concluded in 1998 when Kansas businessman Phil Ruffin purchased the Frontier. Ruffin finalized the acquisition of the hotel in early 1998 for over $160 million, according to the LVRJ.
Partial Property Sale
Despite selling the Frontier, Elardi retained ownership of a portion of the original property. County records indicate that in 1998, she leased the northern section to Ruffin for a 99-year term, maintaining control over the 16-acre vacant parcel.
Ruffin’s Perspective
Ruffin, currently the owner of Treasure Island and Circus Circus, stated that he attempted to purchase the remaining parcel from Elardi, but she intended to keep it for her grandchildren. He characterized Elardi as a skilled businesswoman who thrived in a male-dominated industry, suggesting her grandchildren would benefit significantly from the rental income generated by the Strip property.
A Lasting Legacy
Ruffin remarked in an interview, “It’s a very nice legacy she left her grandchildren,” highlighting the enduring financial security provided by the land lease agreement.
Rising Cost of Living in Las Vegas
As the Elardi family continues to profit from their substantial $4 million annual lease, concerns are growing among residents about the increasing cost of living in Las Vegas and Nevada. Many believe that political decisions have contributed to the city’s declining affordability, with prices continuing to escalate.
Influx of Residents and Soaring Housing Costs
An influx of people from California and other expensive states seeking more affordable housing has further driven up Nevada home prices. This increased demand has intensified the pressure on the local housing market.
Sharp Rent Increases
Rent prices in Las Vegas have surged by 35 percent compared to pre-pandemic levels in December 2019. This substantial increase places a significant burden on renters in the city.
Housing Market Dynamics
Las Vegas Realtors attribute the current market conditions to limited housing inventory and elevated interest rates, as detailed in their latest market report. These factors are shaping the challenges faced by both buyers and renters in the Las Vegas housing market.
Average Home Prices
Current housing market statistics reveal that the average price for a single-family home is approximately $821,000, while the average price for a condo or townhouse is around $335,000. These figures underscore the escalating costs within the Las Vegas real estate market.
Tourists Feeling the Pinch
The rising cost of living is not only affecting Las Vegas residents but is also increasingly noticeable to tourists visiting Sin City. Regular visitors are observing a significant increase in expenses associated with vacationing in Las Vegas.
Cost-Saving Measures by Tourists
One tourist described packing a portable $20 kettle to prepare instant oatmeal for breakfast to avoid exorbitant food costs on the Strip. This visitor estimated saving $250 over a five-day trip by implementing such cost-conscious strategies.
Reducing Vacation Expenses
Another cost-saving measure detailed by the tourist included bringing a collapsible cooler to avoid purchasing expensive sodas and alcoholic beverages during their vacation, demonstrating efforts to mitigate the high costs of visiting Las Vegas.
Increased Vacation Costs
A tourist’s Reddit post highlighted a dramatic increase in vacation expenses: “We were there in March and spent almost 3x more than we did for the same duration trip in March 2020. It will be a while [until] we return,” reflecting a growing sentiment among tourists regarding the escalating costs in Las Vegas.
Corporate Landlords and Housing Shortage
The housing crisis in Las Vegas is further compounded by corporate entities entering the residential market. A Wall Street-backed corporate landlord, Invitation Homes, acquired hundreds of homes in Las Vegas in a large-scale residential transaction last summer, signaling increased corporate investment in the local housing sector.
Massive Home Purchase
Invitation Homes, based in Dallas, invested $98 million to purchase 264 homes in Clark County, according to property records. This substantial acquisition is part of a broader $650 million portfolio swap involving nearly 1,900 single-family rental homes between Starwood Capital and Invitation Homes.
Invitation Homes’ Growing Portfolio
Invitation Homes now possesses 3,500 homes in Clark County, making it the second-largest owner of single-family rental properties in the region, according to data from the Las Vegas Review-Journal. This significant portfolio underscores the increasing influence of corporate landlords in the Las Vegas housing market.
Housing Shortage and Evictions
This corporate activity occurs as Las Vegas grapples with a severe housing shortage and rising eviction rates. Data indicates that Las Vegas faces the most acute shortage of affordable housing among all US cities, exacerbating the challenges for residents seeking affordable living options.