Holy Cow! Mr. Walgreens Mixing Drugs, Gaming

LAS VEGAS-”The slot machines are over there; we’ll call you when your Prozac is ready.”

The casino wouldn’t actually be in the pharmacy, of course, but they will be closer than is typical, even for Vegas. The owner of the former Holy Cow! Casino site at the corner of Sahara and Las Vegas boulevards – the very north end of the so-called Las Vegas Strip – wants to redevelop it with a two-story, 40,000-square-foot building housing a Walgreens drug store, a casino, a restaurant and a tavern.

Those are the plans now on file with Clark County, anyway. They come nearly two years after Steve Johnson, a low-key investor-developer from Scottsdale, AZ with Strip and Walgreens experience snapped up the two-acre site for $47 million, giving him one of the smallest gaming-entitled site on the Strip.

The delay in developing the site is in part due to the fact that, at the time of the acquisition, Johnson was busy with an even smaller but more centrally located parcel on the Strip, a 0.64-acre site fronting the Venetian and Palazzo casinos. He acquired it in 2003 for a whopping $32.5 million, which translates to $50 million per acre—by most accounts the most anyone has ever paid for land on the Strip.

That site was in the process of becoming a 50-story luxury residential-over-retail tower when his partner Las Vegas Sands pulled the plug on its piece of the construction in late 2008. The site now holds only Johnson’s portion of the development, the first two stories, one of which now holds a Walgreens. Above that, Johnson had leased six stories of air rights to Las Vegas Sands Corp. for office space and, above that, sold them the air rights for the condos.

Shortly after he acquired the Holy Cow! site Johnson told GlobeSt.com that he was actively designing something for the property but declined to confirm that Walgreens was the likely tenant there as well. “We’re comfortable with Strip development moving north beyond Sahara [Avenue],” is all he would say.

This time around, Johnson wasn’t immediately available for comment, having apparently fled his residence in Scottsdale for someplace more habitable in the summer months. Given that the official owner of the site is Johnson’s Colorado-licensed LLC Aspen Highlands Holdings, GlobeSt.com is guessing he’s currently recovering from the Telluride Bluegrass Festival.

Regardless, he or representatives are expected back in Las Vegas on July 9 for a hearing on his new project in front of the Las Vegas Planning Commission. Johnson hopes to raze the existing structure as soon as possible and have the new place up and running by late 2010, a Johnson spokesperson tells GlobeSt.com.

Plans on file with the city call for a two-story, 40-foot-high building that would have 37,100 square feet of floor space. The design also calls for significant exterior advertising including LED billboards with full-motion video wrapping around Las Vegas Boulevard and Sahara Avenue. One sign, shaped like a half-moon, would be 137 feet tall while another, shaped like a sail, would rise 547 feet. The latter, taller sign, which would require a variance, is on the back burner for now, however, having received a chilly response from planning commission staff.

The Holy Cow casino, which contained a microbrewery and a cafe, shut down in 2002, reportedly a victim of the economic slowdown at that time. More recently, it was slated for an Ivana Trump-branded condominium tower that never materialized. Johnson acquired the site from San Francisco-based Rinkai America Inc., which paid $13 million for it in 1996.

The property occupies the northeast corner of Las Vegas Boulevard and Sahara Avenue. Diagonally across the intersection is land MGM had acquired for a multibillion-dollar integrated casino resort in partnership with Kerzner International. Across Sahara is the Sahara Hotel & Casino, which is 2007 had just been taken over by SBE Entertainment Group LLC and Stockbridge Real Estate Funds. Across Las Vegas Boulevard and up two blocks is the Stratosphere, the Strip’s northernmost casino.