However, commitments that were entered when banks were happily funding deals to buy Las Vegas properties have become harder to fulfill in today's tighter, warier credit markets.

"If you don't have a substantial track record in the geography where you want to build and raise capital, the rates are going to be prohibitive," said Bill Lerner, a Deutsche Bank gaming analyst. "It is still a very risky proposition to develop in this sort of climate."

With the condominium market all but closed and banks loaning money at double-digit percentage rates, it becomes harder for new developers "to achieve a significant return on investment," Lerner said.

Hedwigs Las Vegas Top Tier agreed in April 2007 to buy the newly remodeled Hooters Hotel for $225 million, including debt.

The Santa Monica, Calif.-based investment group has made $6 million in nonrefundable payments, of which only $3 million goes toward the purchase price.

Hedwigs principal Richard Bosworth said the deadline is "a very tough date to meet" because the property carries $130 million in senior notes at 8.75 percent that would come due with the sale. Any new debt would be refinanced at a different rate that may be higher.

Plans for the property include a name change and $130 million in remodeling. The idea is to remake the property into a boutique hotel attractive to potential lenders.

"We have found the capital markets have somewhat come back into our favor," Bosworth said. "We're very fortunate we've created some momentum there, but we have an extremely tight time frame to work with."

He added that if the seller, property owner 155 East Tropicana LLC, is "motivated to sell," the transaction can be completed on time.

Although Bosworth remains optimistic about closing the sale, bond analysts are less sure.

In late April, New York-based Moody's Investor Service downgraded the property's bond rating, expressing "skepticism regarding the materialization" of the sale.

Andrew Zarnett, a Deutsche Bank bond analyst, wrote in a May 14 note to investors that the sale was "difficult to evaluate given the lack of information."

If the June 30 date is not met, Hooters could close the option and entertain other offers for the property. Bosworth said Hedwigs does not want to extend the current option but wants to close the deal.

However, Zarnett said if the deal doesn't close the owners will likely be open to another extension.

"We remain skeptical over the buyer's ability to retain financing to close this deal by the end of June, but believe that Hooters will likely renegotiate with Hedwigs to extend the purchase time line," Zarnett said.

A few miles north on the Strip, the future ownership of the 27-acre former Wet 'n Wild site is just as cloudy.

Texas-based developer Christopher Milam first agreed to buy the site from land owner Archon Corp. in June 2006. He planned to build the $5 billion Crown Las Vegas, a hotel-casino with no residential units.

Over the next couple of years, LVTI, a Milam-led investment group, has paid nearly $70 million in nonrefundable payments to keep an option that has been amended five times. LVTI is a holding company partnership between Milam, N.Y.-based private equity firm York Capital Management and Melbourne, Australia-based gaming company Crown Ltd.

The land price is $475 million, or $17.7 million per acre.

The amount spent on the land does not include additional money spent on development and on a yearlong effort to obtain a height variance from the Federal Aviation Administration for a 1,888-foot hotel tower.

The FAA agreed to allow a 1,064-foot-high tower in November.

Although Milam did not respond to a recent request for an interview, he told the Review-Journal in March the site is being marketed for sale with Goldman Sachs and CB Richard Ellis.

He also said he was open to selling a stake in the project to an outside investor.

However, Crown's interest in the project could be waning.

Crown, controlled by Australian billionaire James Packer, said in February that the partners were "undertaking a strategic review of its development options in light of recent upheavals in capital markets."

The gaming company, which holds a 37.5 percent interest in LVTI, has expanded its investments in the region's gaming market since joining Milam in June 2007.

The company is buying Cannery Casino Resorts for $1.8 billion and is investing $414 million for stakes in Harrah's Entertainment and Station Casinos.

Crown also has a 19.6 percent stake in the $2.9 billion Fontainebleau Las Vegas project neighboring the Wet 'n Wild site.

Archon Corp., which didn't answer an interview request, is collecting $364,000 per month from two separate leases on the land. Part of the site is being used as a construction site for Fontainebleau.

With cash-flush Crown apparently retreating, LVTI faces a bigger challenge for landing financing at workable rates.

"If you're a new project in the Strip corridor and haven't developed anything here, you're not well-known; there's greater risk with an unlikely possibility of buying down the development cost," Lerner said.

"So improving the returns is less likely than it used to be," he added, "because you can't build residential or condo-hotels as easily to improve your return."

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.