Las Vegas Sun

October 18, 2018

Currently: 73° — Complete forecast

Breaking News: Today is the last day to register to vote

Strip retail centers tout expansion plans

Globalization and e-commerce will be among the topics discussed as retailers from around the world gather for the International Council of Shopping Centers' first Las Vegas conference of the new millennium.

More than 30,000 people are expected to attend this year's ICSC conference, which started Sunday and runs through Thursday at the Las Vegas Convention Center.

Some of retailing's most influential figures -- including senior executives from retailing giants the Gap and Wal-Mart -- are among those slated to address the conference.

The annual event provides Las Vegas retailers with a high-profile forum to unveil new initiatives, or simply promote their properties before an attentive world audience.

Concurrent with the conference, owners of major retail properties on the Las Vegas Strip are touting the attributes and planned initiatives at their malls.

Case in point: representatives from Columbia, Md.-based The Rouse Co., owner of the Strip's Fashion Show Mall, plan a groundbreaking ceremony tonight for their $300 million "bigger than life" mall expansion project.

"As part of the expansion, we will be introducing a product and promotional infrastructure platform featuring a state-of-the-art audio and video system," said Rouse Executive Vice President Jerry Smalley.

New Fashion Show mall retailers will include Bloomingdale's and Lord & Taylor, and several existing stores -- including Dillard's, Robinsons-May, Saks Fifth Avenue, Macy's and Neiman-Marcus -- will double in size.

The expansion will add 266,000 square feet of small store retail space, and upon its expected completion in 2003 the mall will encompass a total 1.8 million square feet.

Rouse, parent of Las Vegas-based Howard Hughes Corp., also plans to build its Summerlin Center Mall as the retail component of the Summerlin master-planned community.

The mall will encompass more than 1 million square feet and include anchor tenants such as Sears, Dillard's, Lord & Taylor and Robinsons-May.

In three months, the already fierce battle for Strip retail dollars will become even more competitive.

In August, all eyes will be on the opening of the 500,000-square-foot Desert Passage shopping complex, adjacent to the new Aladdin hotel-casino.

Billed as a Middle Eastern-themed retail experience, the center will open in conjunction with the $1.3 billion Aladdin.

"We'll have 130 retailers and 14 restaurants once we're fully operational," said Desert Passage Marketing Director Paul Beirnes.

"We expect the number of retailers for the opening to be in the low 100s."

Beirnes said the $300-million retail center will begin "an official countdown" promotional campaign several days prior to its opening.

"It will be fairly theatrical, and in keeping with what you would expect from a Las Vegas opening," he said.

Despite its prominent place on the Strip -- "we couldn't have been blessed with a better location" -- Beirnes said Desert Passage will also focus considerable effort on attracting local customers.

"We expect about 55,000 people per day after our opening, and about 25 to 30 percent of our business will be from the local market," he said.

Among the high profile tenants at Desert Passage will be the Blue Note Jazz Club, Commander's Palace restaurant of New Orleans and a vast array of high-end specialty retailers.

Industry experts are lavish in their praise of the new retail center.

"It's looking like it will be a truly world-class retail experience," said George Connor, retail specialist with broker Colliers International.

"They've really outdone themselves with this project. Desert Passage, with all its unique amenities, is designed to touch all the senses of the shopper. It's built with a racetrack design -- which has proven to work at many successful centers -- and its Center for Performing Arts will be one the best places in Las Vegas to see a show."

John Knott, managing director of broker CB Richard Ellis' Las Vegas office, also had kind words for the new retail complex.

"It's top-shelf, an absolutely great property," said Knott. "I think it will also be a magnet for not only tourists but locals as well. With its restaurants and performing arts center, it will be the type of place you could go for an anniversary to take in dinner and a show."

After a slow start last year, the future is also looking brighter for the 70 retailers at the Canal Shoppes in the Venetian hotel-casino.

"January was surprisingly strong for us, and since then we have had double-digit (sales) growth every month," said Canal Shoppes mall manager Fred Walters. "We're currently averaging (sales) of about $900 per square foot, and that is expected to exceed $1,000 by year's end."

Walters said one reason for the strong sales numbers is a dramatic increase in the number of customers passing through the mall.

"We're averaging between 40,000 and 45,000 (people) in foot traffic per day," he said.

"That's up dramatically from about 25,000 visitors a day last year, when our (mall) opening was delayed and we had only a handful of retailers open."

Another five retailers are slated to open for business at the Canal Shoppes within the next 90 days; included among those will likely be a jewelry shop and clothing apparel outlets.

One reason for the mall's success is its proximity to the Sands Expo & Convention Center, said Walters.

"When a conference is held at the Sands, we see a sharp increase in our foot traffic," he said. "That's really one of our driving factors."

Across the street, plans are still afoot for a major expansion of the Forum Shops at Caesars.

"We expect to begin construction on our Phase Three expansion by the fourth quarter of this year," said Forum Shops marketing director Maureen Crampton.

"We're targeting completion for 2002, and the additional space will mean about 30 to 35 more retailers, bringing our total number to about 135 stores."

Caesars Palace recently changed ownership with the property's purchase by Park Place Entertainment Corp. of Las Vegas; that acquisition was completed in December 1999.

The mall first opened in 1992, and currently has more than 500,000 square feet of retail space. The Forum Shops' most recent growth took place in 1997, with the addition of 276,000 square feet of retail space.

Few dispute the success -- or influence -- of the retail complex.

"When people think of Las Vegas (retail), the Forum Shops is usually the first thing that comes to mind," said Knott. "Despite the new competition, the property continues to perform very well."

Crampton said the retail center is enjoying the fruits of the current economic prosperity.

"For the period ending March 31, we were doing in excess of $1,400 in sales per square foot," she said. "The ICSC estimates that an average mall has about $300 in sales per square foot.

"At the end of 1999, that (sales) figure was about $1,200 per square foot. We really continue to amaze ourselves, and I think our industry as well."

Crampton said she welcomed the forthcoming competition from Desert Passage, and felt the entire retail corridor along the Strip would benefit from the addition of the new retail complex.

"I think they have a great management team and will offer a really unique product," she said.

"I also don't think it would be the neighborly thing to try and steal their limelight with any special promotions of our own when they open this summer.

"But that doesn't mean we won't continue to be competitive. We are a very established presence on the Strip, and have a strong name recognition and wide selection of retail shops."

An expansion is also under way at the Showcase Mall, just north of the MGM Grand hotel-casino on the Strip.

Construction is expected to begin on Phase Three of the mall in early 2001. The 96,000-square-foot expansion will span three levels; mall officials say discussions are currently ongoing with "several large format tenants."

A separate, 46,000-square-foot expansion is currently under way at the mall, and will be completed this fall. Retailers at the expanded Showcase Mall include the Grand Canyon Shops, a 25,000-square-foot interactive retail theme store featuring a replica of the original Grand Canyon.

Upon completion of the expansion, Showcase Mall will encompass 334,000 square feet. Nevada-based Makena Development Corp. and Cleveland, Ohio-based Forest City Enterprises Inc. are the mall's developers.

Despite recent setbacks -- including the March closure of the non-retail element of the World of Coca-Cola and the previous closing of the All-Star Cafe -- experts say the mall's prime location makes it a desirable place to do business.

"The (Showcase) mall's location has tremendous exposure and access to about 12 million people (along the Strip)," said Frank Volk, managing partner of Las Vegas broker Blatteis & Schnur, a subsidiary of Los Angeles-based Blatteis Realty Company Inc.

"Mall stores, such as the Grand Canyon shop, that offer moderately priced tourist merchandise should do very well at that location."

Collier's Connor agrees.

"I think they've proven that location can work with the success of the M&M's World," said Connor.

"It's a great location, but you need the right concept. Even in a desirable location, a failed concept is still a failed concept."

Phil Levine is a business writer for the Sun. He can be reached at 259-4068 or [email protected]

archive