Thursday, May 22, 2008 | 2 a.m.
With today’s credit crunch, even the most appealing new development projects require substantial pre-leasing, according to real estate financing advisers who attended this week’s International Council of Shopping Centers’ annual conference at the Las Vegas Convention Center.
That explains why a sizable amount of commercial construction continues across the Las Vegas Valley — especially on the Strip and in increasingly populated suburbs, experts at the event said. It’s far easier to secure stores for high-end malls connected to valley casinos than it is to sign them up for shopping centers in the Rust Belt.
Development even slogs on in some of the valley’s blighted areas, spurred by breaks given to builders and retailers by local governments. Representatives of local governments’ redevelopment arms communicated that willingness in meetings with companies at the conference.
“What I hear is people are having a hard time getting money,” said Lesa Coder, director of operations for Clark County’s Economic Development Department. “Lending is tight, so public-private partnerships are the way to go.”
Coder declined to specify the type of public-private partnerships being discussed, but such a concept is not new to this valley.
Two proposed projects in North Las Vegas touted at the convention, Las Flores and The District at Desert Star, are eligible for government incentives.
Las Flores, which would be built on 32 acres at Las Vegas Boulevard North and East Carey Avenue, is conceived as a 350,000-square-foot marketplace with big-box stores and smaller merchants. A major anchor tenant has signed on, with two other leases about to be completed, said Michael Majewski, the economic development director of North Las Vegas.
The District at Desert Star, which has yet to reach the city’s planning pipeline, would be a mix of department stores and residences sprawled across 158 acres and is being marketed as the city’s new downtown. It would have 1.2 million square feet of leasable space.
North Las Vegas has not negotiated development agreements with either developer, but would not be opposed to them, Majewski said. Potential incentives depend on how the city would benefit money- and jobwise from developments.
Las Vegas, in recent years, has waved its own incentives at retailers considering moving into some abandoned storefronts. It’s unclear whether the city did so at the conference, as city representatives who operated a booth at the convention center declined to comment and the head of Las Vegas’ economic development could not be reached.
Henderson and Boulder City did not host booths at the conference.
Despite the national market conditions, analysts believe the Strip and other nondepressed parts of the valley have withstood some of them, thanks to tourism. And a wave of new retail-heavy resorts is expected to grace the Strip in the next few years.
“I think Las Vegas, to some degree, is a bit of a separate entity,” said Jeffrey Linton, vice president of corporate communications at Forest City Enterprises, which owns the Galleria mall in Henderson. But he acknowledged that some developers Tuesday questioned whether Vegas has become, or is becoming, oversaturated with retail.
Perhaps predictably, the company handling the leasing for The District at Desert Star — and a regional mall planned for a new hotel, M Resort, south of the Strip — is bullish about our valley.
“Everything cycles,” said Steve Kieras, the senior vice president of development for Taubman Centers. “There’s still a lot of people coming to Vegas.”