The mood around the International Council of Shopping Centers’ Spring Convention , called RECon, this year in Las Vegas might be a bit more somber this year due to a weak consumer environment and slowdown in the economy. But developers of one local project are not deterred. Tivoli Village at Queensridge, formerly called the Village at Queensridge, is an $850-million, 700,000-sf mixed-use project scheduled to open in the city’s Summerlin section next spring. Already committed to the project are Village Roadshow Gold Class Cinemas, an Australia-based outfit which took up 38,000 sf, and a number of restaurants, headed by the Cheesecake Factory concept Grand Lux Café. Patrick Done, executive vice president of the project for Israel-based developer IDB Development Corp. recently spoke with GlobeSt.com about the project and trends in his market.
GlobeSt.com: How do you envision the overall retail mix at Queensridge?
Done: It’s not a traditional shopping center mall environment. It’s clearly a mixed-use project We don not have traditional department stores, however, we do have anchor stores. The anchor stores for our development are entertainment and restaurants. We have a 38,000-sf, unique-to-the-market theater operation which is Village Roadshow. Ultimately we will have about 125,000 sf of restaurant space with new-to-the-market restaurants that will anchor the project geographically. For example Grand Lux is on the north side of the project. Mastro’s Steakhouse is on the south side. Zeffirino, an Italian restaurant which is also at the Venetian on the Strip, is centrally located. Village Roadshow is also centrally located. Much like you would see in a traditional shopping-center environment with department stores that anchor the project, our development is not dissimilar, but the anchors are restaurants and entertainment.
GlobeSt.com: What kind of inline-tenant mix are you going for?
Done: This is a shopping environment that will speak to the masses. We have the ability to cover all retail categories. We will have men’s, women’s and children’s apparel. You will see a broad cross section with merchandise categories. We are in the middle of a very affluent area on the west side of the valley, and we will certainly cater to that market. But with 500,000 sf, we will have a broad range of price points.
GlobeSt.com: Is differentiating from General Growth Properties’ nearby Summerlin Centre a concern?
Done: Our research indicates that this side of the valley is under retailed. We know that the market can absorb the amount of retail that is coming online with our project and competing projects. The way that our project has been developed and the strategy that is in play is clearing distinct from the mall environments. We don’t compete directly with GGP in the sense that we don’t have a Dillards, Macy’s and so forth. Our project is distinct and different, and our restaurant category is more broad than any of the competition in the marketplace. There are certain categories that we focus on that we know the market needs and wants.
GlobeSt.com: Is it a tough leasing environment with the downturn in the economy?
Done: It’s very interesting. There is a cautious attitude among retailers. But retailers understand that Las Vegas is different. We continually have projected job growth, whereas other markets don’t necessarily have that forecasted job growth. The way that the growth shows up in our market is through new-resort development. If you look historically at Las Vegas, you can see significant job growth when new resorts come online. In 2008 Palazzo just opened, and I believe Encore at Wynn is opening this year. Next year, of course, is CityCenter, which is much anticipated. Significant room count is coming into play, which equates to job growth. It’s not just with the resorts. There’s a ripple effect through the entire economy that has a positive effect on the valley. Las Vegas is a very productive environment for retailers and restaurants. The Strip is very productive, but so are the suburban markets. Retailers now recognize that Las Vegas has over two million residents. It’s a very lucrative market, and if you can overlay a small portion of that visitor market onto the local resident market, it’s gravy. For examples, Queensridge has two resorts across the streets, which are visitor market driven, and we have many golf courses that are in proximity to our development. We’re not forecasting a significant amount of visitors, but we will see some of that in addition to the local market.
GlobeSt.com: Is it easier to sell retailers on the suburbs as opposed to the Strip than it was in the past?
Done: The leasing process with retailers in Las Vegas is very different than it was five years ago, certainly 10 years ago. They understand the market and that the local resident market is a legitimate location opportunity. Ultimately in Las Vegas you’ll see luxury retail in the suburbs much like you do in other major markets. Here it’s very interesting because there are significant luxury-branded goods on the Strip. What they want to do is fill out the markets because it’s more efficient and there are more economies of scale. In time, you will expect that the luxury retailers that have been only on the Strip would want locate in the suburban markets too because the affluence and population numbers are there.
GlobeSt.com: Are you seeing any retail trends, or chains, in the market that aren’t in other parts of the country?
Done: It’s hard to say that there are chains that are coming here that might not be coming to other markets. The retailers have schedules and look at specific geographic markets they need to fill in or where they feel they can be successful. Those are the tenants that we target and talk to. There is nothing that would be out of the ordinary from other markets.
GlobeSt.com: Are you planning more projects in the area for the future? Is there still room for growth?
Done: I do. Our company has other land holdings in the valley where we are targeting and planning other retail developments. The Villages is the largest at this point that we’re working on. Our partner in the project is also a partner in the new Frontier site on the Strip. At some point that’s an opportunity. There are a couple of other suburban opportunities that we may have down the road as well. The Las Vegas valley still have a great deal of developable land that is available to the south and the north. When that land is released by the Bureau of Land Management you’ll see additional master-planned communities that will include retail and office developments with a great deal of residential.
GlobeSt.com: What do you think the climate with be like at the ICSC convention this year and what are your goals?
Done: It’s an important ICSC for us. With a 2009 opening, we have many, many meetings set up with retailers and restaurants. It’s an important convention for us to get out in front of people, and in some cases, to finalize some deals. I think that there’s a more cautious approach to markets for retailers. But the successful retailers still have a schedule that they need to fill. You will still see retailers expanding, and I think you will see retailers expanding in this market because of the economic growth that we’re still projecting in 2009 and 2010. But it’s a more cautious approach, as people analyze their sales productivity in the first and second quarters.
