It's been a rough season for development in booming Las Vegas, which bubble-watchers have long
cited as ripe for a pin-prick. But even as some high-profile projects such as Icon Las Vegas and
Las Ramblas have fallen or faltered, others have been moving ahead. And for those with a clear
plan that includes an attractive consumer hook, not to mention access to land, capital and
construction expertise--in other words, a strong business plan--the market may still be open for
business.

One such person is Charlie Palmer, the chef-restaurateur whose classic Aureole, with its striking
wine tower and harnessed wine angels flying high to retrieve precious cargo, helped lift Las Vegas
cuisine out of the buffet line and into four-star, white-tablecloth territory when it opened in
the Mandalay Bay in March of 1999. Now, Palmer wants to do something similar for Las Vegas
hospitality.

Buoyed by the growing success of his $55 million restaurant business--with properties in Las
Vegas, Manhattan, Washington, D.C. and a small California hotel--as well as by the pace of growth
in Las Vegas, Palmer is moving aggressively forward with plans to build and operate a 400-key, 35-
story boutique condo-hotel in Las Vegas. Even as the straight condominium market for properties
like Related's Icon Las Vegas has stumbled there, the condo-hotel market has remained strong,
surprising many observers.

Projects such as Mirage's The Residences at MGM Grand and the Cosmopolitan have sold at robust
prices. A year-end 2005 report from Performance Marketing & Associates, a Las Vegas group, studio
apartments at the MGM (nyse: MGM - news - people ) project achieved $1,000 a square foot; those at
Cosmopolitan reached $1,190.


There are no guarantees, but Palmer is trying to cover as many bases as he can, using an approach
to hospitality grounded in a strong business sense and a familiarity with the customer base that
fills his roughly 2,000 seats every night across the country. Palmer hopes that the brand loyalty
he has cultivated through his signature mix of fresh, top-quality ingredients, sparkling
presentation and attentive service will translate into an embrace of his hotel concept.

That concept is a gamble on a growing segment of the Las Vegas market: the business and vacation
visitor for whom gaming is a low- or no-priority distraction, but who still wants to participate
fully in the lifestyle choices--eating, drinking, partying and shopping--that the desert city has
to offer. To that end, the CharliePalmerHotel will not only be gaming-free, it will also be off
the Strip, though not far; residents will have unobstructed views of the Strip one block east and
the mountains to the west.

"The more congested Las Vegas Boulevard becomes, the more key position we're in," says Palmer.
Especially important is that "no one can build next to us and block our views."

The site, at the southwest corner of Tropicana Avenue and Dean Martin Drive (formerly Industrial
Road) is now occupied by the forlorn Golden Palms casino-hotel, a 150-room 1970s dump (and former
HoJo's property) that was acquired in the late 1980s by Palmer's development partner, Marvin
Lipschultz. Diners today can avail themselves of an International House of Pancakes. Lipschultz, a
one-time home-builder from Chicago who now lives in his hotel's faded Elvis Suite, has been
scheming for years to redevelop the property, and has teamed up with Palmer in hopes of seeing
that dream realized.

Guests at the CharliePalmerHotel will probably be able to order pancakes, too, at one of the three
restaurants he is planning for the project; the nightclub, near the top floor, will probably not
offer them, but who knows? These facilities, as well as all the interiors, are being designed by
Adam Tihany. Along with a spa, back of house and other amenities, these are expected to take up
about $100 million of the estimated $380 million development cost.

Besides nailing down the land, Palmer has assembled a kitchen cabinet of operations, marketing and
development personnel. Perhaps most importantly, he has locked up local construction giant and
former Vice Chairman of Mandalay Bay Resort Group Bill Richardson. Richardson has the clout to
shepherd the project through today's labor-shortage minefield. As for managing rising materials
costs, that will be everybody's headache.

Palmer has also secured the blessings of management at MGM Resorts and the Four Seasons, which in
1999 asked Palmer to rescue the hotel's floundering in-house fine-dining establishment by bringing
in a Charlie Palmer Steak restaurant; between that and Aureole, the Las Vegas restaurants bring in
about $18 million a year. (Palmer also took over management at the Sterling Club, the private club
at Ternberry's exclusive high-rise complex). The Four Seasons is a non-gaming hotel atop
MandalayBay, but with a separate entrance that allows guests to avoid the casino.
Palmer has no trouble acknowledging what is driving his move to build: "Ambition," he says
bluntly. "For the last ten years, I've been a player in the development of Las Vegas. Real-estate
developers and hoteliers have come to me to enhance their properties with a great restaurant that
will increase visibility and values," says Palmer. "Developers have said to me that what I provide
will help them bring in X dollars more per square foot. At some point, we need to be the
developer."

Palmer also acknowledges that the move to development is a risky one, to which he and Lipschultz
are contributing about $47 million in equity, about three-quarters of which is based on the value
of the land, according to a Cushman & Wakefield appraisal "It's certainly risky--there's risk to
everything we do."

But the nascent developer believes firmly that the negative press on recent Las Vegas condo
projects is well outweighed by what is happening on the ground with the condo-hotel market. "I
don't see those going by the wayside," he declares "Everything we look at that is real and being
built is completely sold out. If you can sell at the right price, you can build it." Of course,
the right price is the $64,000--and up, because that will buy you nothing--question. Palmer
expects sales to begin at around $1,000 a square foot.

Another key member of the team, the man responsible for the day-to-day grind of development and
management--which is not to say that Palmer himself isn't hands-on--is Charlie Palmer Group CFO
Richard Femenella, who has been with Palmer for nearly nine years. A tough C.P.A. from Queens who
headed up operations for New York restaurateur Buzzy O'Keefe, proprietor of the Water Club, a
power hangout on the East River, Femenella has been part of the company's growth from its roots as
a small New York operation. Palmer recalls waking up one day three years ago and realizing things
had grown too far too fast. "We had a thousand employees, but no real corporate structure," he
recalls. He stopped growing until he could get that in place.

Palmer appears to have planned out his line of attack the way he approaches a well-managed table
stunner. "We built from the operational side first," says Palmer flatly. "Everybody builds and
then sources the manpower to operate. I can't afford to take those risks."
Palmer also hired former Las Vegas Life publisher Rick Becker to head corporate sales, and the
young, hip Blue Tipping Group marketing concern to run his sales and marketing campaign, which is
expected to kick off in earnest in May. "We'll start taking soft deposits in late May, and I think
we'll have a good indication quickly where this project is headed," says Palmer.

While others in the group suggest that the CharliePalmerHotel will be the first of several, Palmer
himself dismisses such talk. "We are truly a one-project team, and we do one thing at a time and
make it successful. This is a huge project for us, and it will have 100 percent of our focus until
it's completely successful to my satisfaction," he insists. "Then we can look to the future."


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