McCarran Marketplace brings lift to established neighborhood

By Brian Sodoma

Tuesday, June 30, 2009 | 2:44 p.m.

Development is sometimes a tough sell, even in a good economy. And no one knows that more than

McCarran Marketplace developer, Marnell Properties.

In the early part of the decade, the county began relocating residents out of a 75-acre neighborhood at the southwest corner of Russell Road and Eastern Avenue, making way for future Terminal 3 expansion plans at McCarran International Airport. While the move was met with some resistance at the time, it was met with plenty more when the county decided to explore a ground lease agreement with Marnell Properties on the site, splitting revenues generated from the future development of a big-box retail center.

Brad Schnepf, president of Marnell Properties, saw McCarran Marketplace as an opportunity to create a “buffer” between the established nearby neighborhoods and the airport.

“We explored a lot of different ways to handle this, and one of those ways was a big-box retail center. … Those types of projects weren’t around in that area at the time. When this large parcel became available, retailers saw an opportunity to come back and serve a submarket (that was) a bit underserved for years.”

Neighbors complained. Marnell listened, then made design changes after getting input from the local Cannon Middle School Parent Teacher Association, Del Sol High School administration, concerned area residents and others. Eventually, the project slowly made its way from drawing boards to wooden concrete forms.

“It didn’t happen overnight. That’s for sure,” added Schnepf. “We had to take a lot of input and kept redesigning things.”

Brian Gordon, principal with Applied Analysis, a Southern Nevada-based economic research firm, said the center serves as a positive for the underserved area.

“It just seemed like a unique opportunity that came up in an area that was fairly well built out,” he added.

With $20 million in site improvements needed to replace old residential infrastructure, the $40 million center officially began coming out of the ground in 2005, said Schnepf. McCarran Marketplace officially became a reality in early 2007, when Wal-Mart Supercenter and Lowe’s Home Improvement opened their doors. The center today also has a PetSmart, Office Depot and Ross clothing store as junior anchor entries.

Currently, about 600,000 square feet of space is built out on the site, more than 80 percent of which is leased. The site has a self-standing Bank of America, Carl’s Jr. and Del Taco, along with four pad sites configured for smaller retailers. Those pads range in size from 7,000 square feet to 28,000 square feet. Schnepf said leasing is “not as robust” as it once was, but he notes that there are still plenty of interested parties.

There are still five more pad sites planned, which could add up to another 100,000 square feet to the site. But Schnepf said firm details on who may occupy them or when they will be built are not in place. Some of the smaller tenants in place today include: Starbucks, Gyro Time, Sbarro, Partell Pharmacy and Port of Subs.

At full build-out, approximately 50 stores will occupy the power center, which also has 3,000 parking spaces, as well as an eight-acre soccer park, with two fields run by the Clark County Parks and Recreation department.

Tami Lord, who, as vice president of the retail division at Voit Commercial Brokerage, is in charge of leasing for the property, sees a different approach with leasing to smaller operators today. She said evaluating a prospective tenant for McCarran Marketplace has as much to do with business experience as it does funding.

“We’re looking a lot more toward the experience these days. We’ll give a lot of weight to a guy who comes in and has run a pizza shop for 40 years, who may not be quite as well capitalized but knows how to run a business, and we think will be there in five years,” she said.

Schnepf said concessions always have been a part of the Marnell leasing approach. He sees them less as giving away rent and more as opportunities to help a business get its footing early on by not being overburdened with high expenses in the early stages of its operations.

“What’s happened is, you’re seeing concessions are getting a little more creative today,” he explained. “You’re seeing things like graduated rents, along with relaxing some of the common-area maintenance charges on the front end of the deal to allow (the patron) to ease into the business.”