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Gaming Guru

Chris Jones
 

Vegas Shopping Center Expands

14 September 2006

LAS VEGAS -- A popular downtown Las Vegas shopping center will soon grow -- and fix what's been its biggest drawback among visiting consumers.

Fans of the Las Vegas Premium Outlets should be pleased to learn that the 120-store center will add 30 tenants before the end of next year.

But odds are more shoppers will rejoice when told that the mall's expansion will also bring two multilevel parking garages, an amenity that should ease what can be one of the valley's greatest parking headaches.

Those driving to the mall now park on surface lots that are south of Bonneville Avenue and parallel to Interstate 15.

On weekends and other busy periods, however, it's not uncommon for frustrated drivers to seek out empty spaces at the Clark County Government Center's parking lots on the far side of Grand Central Parkway.

Most of today's parking areas will be displaced by construction, but plans call for a new five-story garage with 500 parking spaces, as well as a separate four-story, 1,115-space garage on the mall's 35-acre site.

The first garage is now under construction south of the mall. Parking will eventually shift there to make room for the north garage and mall expansion, which will later fill in two more existing parking areas.

"We had the required number of spaces. We needed more," said Michele Rothstein, a spokeswoman with mall operator Chelsea Property Group.

The center opened with 1,374 parking spaces where only 946 were required, Tina Past, a spokeswoman for the city of Las Vegas' Planning and Development Department, said Wednesday.

The expansion's cost and expected tenant lineup have not been announced, but Rothstein promised that some "exciting brands," including more designer fashions, will fill the nearly 110,000-square-foot addition on the center's west side.

"Not a lot of outlet centers are above 500,000 square feet," Rothstein said. "It really shows that there is market demand growing with all of the new hotels opening all of the time.

"There truly was an opportunity for quality growth."

The mall's current tenants include Ann Taylor Factory Store, Dolce & Gabbana, Kenneth Cole and Polo Ralph Lauren.

Roseland, N.J.-based Chelsea and Simon Property Group of Indianapolis jointly opened the 435,000 square-foot outdoor shopping center in August 2003.

Its first phase cost approximately $95 million.

That same month, Chelsea purchased a second major local outlet mall, the 477,000 square-foot Belz Factory Outlet World near Warm Springs Road and Las Vegas Boulevard South.

That venue was later renamed the Las Vegas Outlet Center.

In October 2004, Simon assumed complete ownership of the downtown mall when it purchased Chelsea's 35 U.S. and Japanese shopping centers outright in a deal valued at $5.2 billion. Chelsea has since operated as a wholly owned subsidiary of Simon.

Simon, a real estate investment trust that also owns The Forum Shops at Caesars, does not typically disclose sales figures for specific shopping centers.

But its 2005 annual report showed that the company's 33 U.S. premium outlets averaged $444 in sales-per-square-foot last year, up 7.8 percent.

New lease rates averaged nearly $26.50 per square foot, up from $21.91 among tenants who closed or saw their leases expire that same year.

Rothstein said business at her company's two local centers continues to grow.

Morningstar, a Chicago-based independent investment research company, last month published an investor note that praised Simon's ability to extract greater profits from its strongest markets.

Simon owns two of the three outlet malls in Southern Nevada, excluding Primm's Fashion Outlets of Las Vegas, which is owned by the Talisman Cos. of Coral Gables, Fla.

Competitive concerns make it unlikely that another outlet center will be built here anytime soon.

"The company enjoys the network effects associated with dominant retail destinations," the note said. "Given that Simon's malls attract more than 2 billion visitors per year (companywide), retailers have no choice but to enter into long-term leases in order to set up shop."