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November 21, 2018

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CRE May 2009

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No pressure on Tivoli Village

Developers slow pace, take methodical approach

The developers of Tivoli Village at Queensridge are taking a methodical approach to the project’s completion.

Rather than rush to meet the initial completion date later this year in a soft market, developers have pushed back the opening until the local economy recovers.

The mixed-use project on Rampart Boulevard and Alta Drive is now expected to open in fall 2010, and construction continues, albeit at a slower pace.

Patrick Done, executive vice president at Tivoli Village, said that when leaseholders were polled last year, all but two agreed it was a good idea to delay the opening until at least next spring.

“We now are in a place where the retailers and restaurateurs have said, ‘Let’s push this out until the market comes back, and we’ll be flexible with it,’” Done said. “They like the project and want to stay with it and will continue to do so as long as they know it’s real. We’ve been able to assure everyone that it’s real, and it is going to happen, but we’re obviously committed to opening it in the right way with the right level of occupancy and the right merchandise.”

Martin Yan, a celebrity chef known for his “Yan Can Cook” show on PBS, is scheduled to open his inaugural 9 Dragons restaurant at Tivoli Village. He said waiting for the economy to recover is a good call.

“I have been waiting a long time to come to Las Vegas,” Yan said. “I can wait awhile longer.”

Yan was among several prospective Tivoli Village tenants who participated in a preview last year at One Queensridge Place, the residential development across the street.

The sneak peek at some of the tenants included 9 Dragons, Tres Agaves Mexican Kitchen and Tequila Lounge, Ritual Spa & Salon and Townsend, a lounge that will feature small plate dishes and wine by the glass.

Other tenants at the 1.4 million-square-foot project include fashion retailer BCBGMaxAzria, which will open a 4,089-square-foot boutique, and the restaurants Grand Lux Cafe, Mastro’s Steakhouse, Taro’s by Mikuni and Zeffirino.

The $850 million, 29-acre project also will feature a 33,552-square-foot luxury DavidBartonGym; the Village Roadshow Gold Class Cinemas, a deluxe movie theater; and Kidville, an upscale preschool.

Additionally, a 10,000-square-foot grocery store is planned for the project. Done said it would be an upscale first-to-the-market store with a name people would recognize.

Phase 1 will include office space, 42 residential units, a streetscape and park. The below-grade parking structure will have 3,400 parking spaces and run the length of this development phase. Parking will be completely integrated, so each section will have direct access to the retail shops above it. Some aboveground parking spaces will also be available.

Construction will begin on the final phase, which will include the remaining residential units, after Phase 1 is completed and will be dictated to some extent by the market. The developer has added flexibility with Tivoli Village, because other projects in the valley have been delayed or canceled.

Summerlin Centre, a development by General Growth Properties, which recently filed for bankruptcy, has been shelved indefinitely, and the $2 billion City Crossing planned in Henderson seems unlikely to ever be built.

“I think it’s fair to say, we are the only new, pure retail development that continues to build,” Done said. “So within all of this negativity, it continues to create a positive for us, because we’re the only ones standing.”

One reason tenants have been so supportive of a delay is that these are tough times for retailers. With unemployment rates in the double digits and the credit markets still tight, people aren’t spending as much, and banks are reluctant to lend.

Done is optimistic that there is a change on the horizon, and the market will be ripe for new projects next year.

“I do sense that things will turn, and the credit markets will loosen up marginally this year,” Done said. “Obviously, the capital has to be there for the retailers and restaurateurs to expand. As long as the project has quality and has a good trade area, which is the situation we have here, we won’t lose anybody who continues to be solvent.”

Because Tivoli Village was financed with cash reserves, there is no pressure from lenders to complete the project. Partners in the venture include Executive Home Builders and IDB Development Corp.

Executive Home Builders is one of the valley’s premier custom home builders, renowned for its craftsmanship and stonework. IDB Development is one of Israel’s leading and largest holding companies.

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