Wednesday, Jan. 28, 2009 | 2 a.m.
- Valley’s four Circuit City stores among 567 to close (1-16-2009)
- Struggling to hang on (11-24-2008)
- Slowdown not sparing many Vegas locales (6-2-2008)
The Winterwood Pavilion at Nellis Boulevard and Sahara Avenue seemed to be doing just fine until, on Christmas Eve 2007, the Vons supermarket closed.
Since then, three stores to the right of the old Vons and four to the left have closed. Among the remaining tenants, a jewelry store won’t renew its lease in June and the manager of a smoke shop says revenue has plummeted 75 percent.
At the Spring Valley Town Center on Rainbow Boulevard at Flamingo Road, where a drugstore and an Albertsons supermarket closed, seven storefronts in a row stand empty.
And at the Rainbow Dunes Centre up the road, where a discount retailer closed a few years ago, 10 of the other 12 stores are vacant.
For reasons ranging from marketing decisions to the recession, shopping center anchors are closing valleywide, leaving gaping retail holes and triggering a wave of commercial blight and stripping smaller businesses of their customers. Some mall owners, struggling to fill vacancies, are offering unprecedented deals fill empty storefronts and stave off their own foreclosures.
Once an anchor closes, the retail blight spreads.
Boulder Market Place
At Henderson’s Boulder Market Place at Boulder Highway and Major Avenue, Albertsons was the first to leave. Since then, a drugstore, a video store and three smaller stores have closed. Phil Dunning, a commercial real estate salesman with MDL Group, says he’s fighting the perception that the Boulder Market Place is a “dead center.”
Customers usually are drawn to specific shopping centers because of their proximity or loyalty to a supermarket or other major store — and once they’ve parked, they patronize the smaller stores, says Debra March, the executive director of the Lied Institute for Real Estate Studies Program. If an anchor closes, shoppers may forsake the center’s smaller stores and take all of their business elsewhere.
Applied Analysis, the local market research firm, says 17 anchor stores around the valley are closed. CB Richard Ellis estimates that more than 30 anchors in excess of 20,000 square feet are empty.
“We haven’t witnessed this level of retail closures in our history,” says Brian Gordon, a principal at Applied Analysis.
And it’s only going to worsen.
Circuit City plans to close its stores nationwide in March, including four here. On Feb. 4, The Great Indoors, a home decor outlet under the Sears umbrella, will close a handful of its locations nationwide, including its Las Vegas store. Other closures include Linens N Things, Wickes furniture, Sports Authority, Levitz and Mervyns.
Two more Albertsons are closing in February, as well as four Lucky grocery stores. An Albertsons spokeswoman attributed the closings to stores not meeting their sales goals.
Paco Underhill of the international market research firm Envirosell predicts a 20 percent vacancy rate among all retail stores nationwide, and potentially higher in Las Vegas. And some analysts worry that contractual codependency, where one store’s departure allows others in a marketplace to leave, could deepen the crisis.
Commercial advisers are suggesting different uses for the anchor locations, including divvying the spaces for offices – perhaps a medical clinic that could boost foot traffic in sluggish strip malls. As an example of innovative planning, Underhill points to a once underperforming shopping plaza in Texas that was redesigned successfully as a Hispanic-themed marketplace with frequent live music.
Some market-themed changes are taking root in the Las Vegas Valley. Hispanic grocery Liborios Markets recently opened its second valley location, at an aging strip mall at Las Vegas Boulevard and Cheyenne Avenue in North Las Vegas, and is opening another one, at Charleston and Lamb boulevards, in about three months.
But Hispanic groceries won’t fill all anchor vacancies, and for the first time in decades, there’s little demand for these spaces. At the height of the boom, three or four anchor stores around the valley might have been vacant, Moore notes.
With no quick turnaround in sight, the small retailers are pleading for discounted rents.
Marty Mediate, manager of Cigarettes Cheaper! at the Boulder Market Place, says revenue has fallen 40 percent after Albertsons closed more than a year ago. He’s still selling cigarettes but it’s the people who used to buy his novelties – the bongs, baseball caps and gift items — who have stopped poking their head in the door because they’ve stopped coming to the mall altogether. Mediate appears to have no out: The lease expires in about four years, and he isn’t sure whether he can convince his landlord to reduce his rent.
At Winterwood Pavilion, Dougherty’s Fine Jewelry will close in June after more than 10 years there, when its lease expires. The reason is simple: revenues are off 50 percent since Vons closed. The store would have closed by now, were it not for loyal customers who prefer custom work and an unusual stipulation inserted into jeweler Margaret Garcia’s lease long ago: If Vons closes and isn’t replaced within three months, her rent is halved.