After delays, Federal Justice Tower will open next month in downtown

A view of the Federal Justice Tower, right, an 11-story office building under construction on the southeast corner of Las Vegas Boulevard and Clark Avenue on Sunday, Dec. 13, 2015, in downtown Las Vegas. The Lloyd D. George Federal Courthouse is at left.

Daniel Bogden, Nevada’s top federal prosecutor, has been waiting to move his offices to the new Federal Justice Tower.

The downtown office building is under construction across the street from his current office in a courthouse on Las Vegas Boulevard. There’s just one problem: His new digs are more than two years behind schedule.

“We would like to move into the building,” said Bogden, U.S. attorney for Nevada, “and we’re still waiting.”

The wait could soon be over.

The privately owned, 11-story tower at the southeast corner of Las Vegas Boulevard and Clark Avenue is expected to open in late January, developer Marc Biagiotti said.

His tenants, all from the federal government, are the U.S. Attorney’s Office, the Department of Homeland Security, the Federal Protective Service and the Department of Labor’s Office of Inspector General.

They are leasing the entire building except the ground-floor retail space, which is being marketed to eateries, and will pay about $2.91 to $3.17 per square foot in monthly rent, above market averages.

Federal Justice Tower

A view of the construction site for the Nevada Court of Appeals building on Clark Avenue between Fourth Street and Las Vegas Boulevard in downtown Las Vegas, Sunday Dec. 13, 2015. The Federal Justice Tower, an 11-story office building under construction, is shone in the background. Launch slideshow »

The tower is one of a small number of higher quality office buildings to be developed in Las Vegas in recent years. The valley’s office market remains badly bruised by the recession, although downtown has the lowest vacancy rate in Southern Nevada because of its high concentration of law firms and government agencies.

Its completion also comes as construction of another government property — the state Supreme Court and Court of Appeals building — gets underway across the street, and as plans for other downtown office buildings float around.

Biagiotti, president of Colorado-based SDA Inc., which has built federal properties throughout the western U.S., said the tower has changed directions several times.

It initially was planned to be five stories high, then 10 and then 11. Government officials in Washington, D.C., also issued new security requirements that forced SDA to redesign interior space, Biagiotti said.

He didn’t provide many details, but said in some cases his company had to build “much more secure offices and corridors.”

New protocols, for instance, “required an entire reworking of the first floor,” including its materials and its heating, ventilation and air-conditioning systems. The floor will include a large processing area for people who face possible deportation, he said.

The feds have asked for “a lot of changes,” and although Las Vegas officials expected delays, “it’s certainly longer than what we had anticipated,” said Bill Arent, the city’s economic and urban development director.

Spokeswomen for the U.S. General Services Administration, which oversees federal real estate and represents the tower’s tenants, did not respond to a request for comment.

SDA founder Steve Biagiotti, Marc’s father, broke ground on the project in November 2011. The event included a Homeland Security honor guard.

The building was expected to open by summer 2013 with two tenants: the U.S. Attorney’s Office and U.S. Immigration and Customs Enforcement. In a newsletter, Bogden said the tower would be a “showpiece” for that stretch of Las Vegas Boulevard and “substantially upgrade the area.”

Delays began piling up, though. In March 2013, months before the building had been projected to open, workers held a topping-out ceremony to mark the construction of its steel frame.

In February this year, Steve Biagiotti died of flu complications. He was 69 years old.

Biagiotti launched SDA in 1979 and invested heavily in Southern Nevada, building eight federal properties here and a government-subsidized affordable-housing development. All told, he built around 80 projects in his career, but the Federal Justice Tower was “his pride and joy,” Marc Biagiotti said.

His dad viewed the building as the neighborhood’s centerpiece. “This was his crowning achievement,” he said.

Its location certainly helps. Downtown had a 12 percent office-vacancy rate in the third quarter, compared to 18 percent valleywide, according to brokerage firm Colliers International.

But without deep-pocketed government tenants, SDA may have had a harder time filling the building, as most renters downtown flock to cheaper space.

The neighborhood’s Class A, or highest quality, buildings are about 21 percent vacant and charge $2.59 per square foot in monthly rent. The average asking rent for all downtown properties is $1.99 per square foot, Colliers says.

Meanwhile, the Federal Justice Tower isn’t the only government property being built downtown.

At the southeast corner of Clark Avenue and Fourth Street, developer EHB Cos. has broken ground on a planned two-story, Roman classical-style courthouse. The Supreme Court of Nevada and the state’s year-old Court of Appeals, whose creation was approved by voters in November 2014, will occupy the 26,600-square-foot building.

The property is expected to open in mid-December 2016, said Michael Sommermeyer, spokesman for the courts.

Besides SDA, at least two other developers are considering office projects downtown.

The Molasky Group of Cos. has laid out plans to construct at least 250,000 square feet of space on what’s now city-controlled land in Symphony Park, just west of City Hall. The City Council in September approved an exclusive negotiating agreement with Molasky for the project.

In addition, Forest City Enterprises has drawn up plans to develop three office buildings between City Hall and a Regional Transportation Commission transit center. The roughly 507,500-square-foot project is called “The Grid.”

So far, the project exists only on paper, and it’s far from certain that Forest City will build anything.