Wednesday, March 29, 2000 | 11:03 a.m.
After a two-year wait, the owners of the Forum Shops at Caesars are moving forward once again with plans to expand the mall a second time -- but they've yet to receive the final blessings of Caesars Palace owner Park Place Entertainment Corp.
A mall official said construction on the 240,000-square-foot expansion is tentatively scheduled to begin this summer. That would put the mall on track for completion by the end of 2002 and would increase the mall's retail space by about 50 percent.
"We are actively negotiating leases for Phase 3," said Maureen Crampton, marketing director at the Forum Shops. "We're going to see some activity this summer, some preliminary moves to get us going on the construction phase."
Initially called "Pantheon at Caesars," the expansion was first announced in May 1998, as control of Caesars Palace was shifting from owner ITT Corp. to Starwood Hotels & Resorts Worldwide. But those expansion plans were shelved after it became apparent that Starwood was considering selling Caesars Palace.
That transition was completed in December 1999, when Park Place completed its $3 billion acquisition of Caesars World Inc.
"(Forum Shops' owners) wanted to hold off, because they didn't want to get into midstream and have another owner in the stream," Crampton said. "Park Place is very serious about improving the property and adding value. I know they're in this for the long haul."
However, Park Place cautioned that the two companies had yet to sign a letter of intent. The largest issue that must still be negotiated is whether Park Place will have direct ownership in the new mall space, something Park Place Chief Executive Arthur Goldberg is said to be pushing.
Currently, Park Place's revenues from the mall come through land lease payments rather than a cut of mall profits, so equity ownership would be far more lucrative for the gaming company.
"Taking an equity position (in the new space) may be an option, but there have been no decisions on that topic," a Park Place spokesman said. "It's still under consideration."
"It wouldn't surprise me that (Park Place) would want that, because it's one of the most successful malls in the city," said Joe Coccimiglio, gaming analyst with Prudential Securities.
Unlike the mall's current layout, the third phase of the mall would sit directly on Las Vegas Boulevard, between the Caesars Palace entrance and the Mirage. If built according to those plans, the Forum Shops' "people mover" would be removed, and the north driveway into the hotel-casino would have to be reconfigured.
Though the Pantheon theme is the most likely one, architectural plans have yet to be finalized. Crampton said Simon is considering a "Colosseum-looking" theme as well.
Though the Forum Shops have proven to be a successful draw for the rest of Caesars Palace, Coccimiglio expects Goldberg is already working on strategies to help draw even more shoppers to the casino floor.
"There's a benefit, but quantifying it is the tough part," Coccimiglio said. "There's no doubt (expansion) will have some incremental benefit, and it's reasonable to assume Park Place management will do a better job of capturing Forum mall traffic than Starwood or ITT.
"It would make sense that they would want Forum Shops to expand."
The mall is a joint venture between Simon Property Group Inc. of Indianapolis and Gordon Group Holdings Inc. of Las Vegas.
First opened in 1992, the mall currently has more than 500,000 square feet of retail space. A 276,000-square-foot expansion was completed in September 1997. The mall's stores averaged $1,222 in sales per square foot in 1999, the highest of any mall in the nation.
The expansion would be the latest in a slew of retail growth plans previously announced on the Strip. The Aladdin hotel-casino will be the first to bring new retail space to the Strip, opening its Desert Passage mall in August. Other expansions include a 1 million-square-foot expansion at Fashion Show Mall and a 1.2 million-square-foot mall at Mandalay Bay.
Despite all of the planned growth, a local retail broker said the market was more than ready for expansion at the Strip's best-known mall, citing strong gains in visitor counts and hotel rooms in 1999.
"Those (additional) people coming are at the high end of the disposable income spectrum," said George Connor, senior vice president of retail properties with Colliers International. "If you look at their overall stay, they'll gamble four hours a day, sleep maybe seven hours a day ... that leaves more than half the day to do other things. The Forum Shops meet that bill 100 percent.
"When good retail is built ... it will do extraordinarily well. Retail will continue to be very much in demand as Las Vegas continues to evolve into a shopping mecca of the world."
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