Las Vegas Strip motel may make way for 620-room hotel-casino
With such neighbors as a boarded-up tavern, an abandoned Ferris wheel project and stretches of vacant land, Motel 8 sits on a less-than-luxurious stretch of Las Vegas Boulevard.
But if Israeli hotelier Asher Gabay has his way, the south Strip motel will be torn down and replaced with a flashy resort.
Gabay, who acquired the Motel 8 property last year, has drawn up plans for a 34-story, 620-room hotel-casino called Astral. He said in a recent interview that he expects to break ground in the spring of 2020 and finish in 2022, and he estimated the project will cost between $325 million and $350 million.
The hotel would bring a rare burst of commerce to a sleepy stretch of Las Vegas’ famed casino corridor and mark the first new tower in a section of the boulevard that, like other areas around the valley, has a history of failed high-rise proposals.
The project would also spell the end of a low-slung, 1960s-era motel that offers low-priced rooms and looks jarringly out of place across the street from the towering, gold-colored Mandalay Bay.
Gabay, co-founder of Astral Hotels, operates several properties in Eilat, a seaside tourist city in southern Israel. He said the Las Vegas project would feature a sky lobby on the 32nd floor, a rooftop pool, a nightclub and dayclub and four levels of underground parking.
He said he hadn’t been looking to build a resort in Las Vegas. But he has visited several times, and when he came a few years ago with his family during a three-week U.S. trip, he saw the economy was strong.
“I felt it,” he said.
The Strip is dominated by megaresorts operated by chains like MGM Resorts International and Caesars Entertainment Corp., and the last newly built boutique hotel-casino in Las Vegas had a short, disastrous run.
The Chinese-themed Lucky Dragon, which has one-third the room count of Astral’s, debuted in 2016 on Sahara Avenue just off the north Strip. It struggled to draw big crowds, closed its casino and restaurants, filed for bankruptcy, shuttered its hotel tower and then was foreclosed on — all less than two years after it opened.
Las Vegas hotel broker Josh Smith, of HREC Investment Advisors, said the market is different now than when the Lucky Dragon debuted, noting the north Strip is poised to get more foot traffic in coming years with the expected openings of Resorts World Las Vegas and The Drew Las Vegas.
Gabay also plans to open his hotel after the Raiders move to Las Vegas and are playing football in a 65,000-seat stadium a mile away.
“If he times it just right and has the right business model, it’ll have some success,” Smith said.
Motel 8, at 3961 Las Vegas Blvd. South, was a shuttered property around the time Gabay and partner Benny Zerah bought it in July for $7.4 million.
It reopened in late December. The motel’s owner, Thomas Kovari, who is leasing the space from Astral, knows the property is slated to get bulldozed in a few years. However, noting that the condition inside was “terrible” when he took over last summer, he upgraded the rooms with new carpeting, furniture, toilets, air-conditioning units and other elements.
He said last month that the average weekly occupancy is about 55 to 60 percent, and he charges $65 a night for single rooms and $120 per night for larger “family” units.
Kovari said there is nothing he can do about the blight nearby, including the long-mothballed SkyVue observation-wheel project and the shuttered Laughing Jackalope tavern. But he can offer a no-frills motel that is lighter on the wallet.
“It’s a great little place for your money,” he said.
Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.