“It’s too expensive.”
If you’ve ever seen the Jockey Club, a dust-colored 348-unit condo complex wedged in the shadow of the 600-foot Cosmopolitan, you have probably wondered why it’s still there.
The answer is simple: you’d need to get a supermajority of over 14,000 whole condo and timeshare owners to agree to sell it.
Forney Smith, who developed the Jockey Club with his partner Louis Schreiber in the 1970s, explained why the resort didn’t give way when the Cosmo was built in the early 2000s — and why it will likely stand “forever.”
“When [original developer Bruce Eichner] first bought the land to build the Cosmopolitan, they came and asked what I would do to buy the owners out here, and I told them how to handle it,” Smith told vegasseven.com in a 2011 interview. “And they went back and put their numbers together and said, ‘No, it’s too expensive.’”
You can still capture that “Visiting Grandma” vibe at the Jockey Club.
Developers would have to buy out every condo and time-share owner with lots of cash and future condos at the new resort. If that’s not challenging enough, it would cost over $500 million in early 2000s dollars, according to Smith, if anyone could even pull it off.
Profitable timeshares?
The arrangement dates back to 1974, when the Jockey Club opened its doors as a whole ownership condo resort. The two condo towers, Astor and Derby, hold 348 suites, and the original property had plenty of room for classy restaurants and shopping. Condos sold for between $29K and $40K in 1974, which would be about $200K-271K today.
Timeshares came along in 1975, a unique concept in the 70s, and a group of investors bought up 270 condos over time to split into 52 weeks per year, creating over 14,000 intervals that sold out back in 1997.
Most of the property was sold to the Cosmo, but residents retain parking access and other amenities.
The other 78 condos are still owned outright by their owners, and families can live in them, vacation in them, or rent them out. The units were bought and paid for long ago, and owners are only on the hook for HOA fees, which amount to $800-$1,100 a month with utilities and security included. The situation creates a rare Vegas version of “rent control” on The Strip.
You can grab yourself a room in one of these condos via any number of online booking platforms, and it appears to take about a week of rentals every month to cover the modest HOA fee. You can also rent the units monthly for around $2,500, which would give you a one-bedroom with access to amenities at the Cosmo.
Good neighbors
The amenities are the result of negotiations with developers, which began before the resort was announced in 2004. The agreement invested $9 million in the fire safety and security of the property, and it handed over most of the land on the 10-acre plot, which was primarily used for parking, for $90 million.
The 600-foot Cosmo towers over the Jockey Club.
Condo owners get access to the parking and two tennis courts, as well as private elevators that connect the two properties and a stack of daily passes to the rooftop pool.
It was a welcome change for residents of the Jockey Club at the time. A third tower was a false start, and plans to start a casino on the property fell apart in the early 1980s. The Strip started to grow around the Jockey Club, but it was impossible to grow with it.
“When they announced that they were building [the Cosmo] at our annual meeting, the owners were delighted,” Smith said in 2011. “‘We’ve been waiting 25 years for this.” Smith passed away in 2015, but the resort’s legacy lives on as one of the rare properties in Las Vegas that will likely never change.
Next time you’re near the alley that connects Bellagio and Cosmopolitan, take a walk down and get a look. You’ll be amazed at the two towers on just 1.5 acres of land, and a property that once offered what might be the only Vegas timeshare investments to ever turn a profit.