EJM has taken down nearly 200 acres in eight separate 50-yearground leases since the agreement was initiated, four times therequired minimum pace. EJM's Kirk Boylston tells GlobeSt.com thatthe company has developed 2.5 million square feet of office, retailand industrial space at the Arroyo in the past two-and-a-half yearsand has 14 additional buildings that will be delivered this quarterand next.

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"The county receives a percentage of the net income and we haveno carry costs," Boylston says. "It's a really good arrangement andI think you'll see more of it; it gets rid of the uncertainty ofthe carry while also creating a long-term revenue stream for thepublic entity and at the end of the lease term they get it allback."

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Completed projects at the Arroyo include Arroyo Market Square, a910,000-square-foot retail center anchored by Walmart and Sam'sClub; Arroyo North Industrial Center (Phases I and II), whichtotals 617,000 square feet; and Arroyo Corporate Center, twospeculative class A office buildings totaling 120,000 square feet.Boylston says the retail center is very well leased while theindustrial, completed 12 months ago, is 70% leased and the recentlycompleted office buildings are 45% leased.

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The buildings under construction at the Arroyo are spread amongthree different developments: the Arroyo Tenaya Office Park, a138,000-square-foot office development consisting of three46,000-square-foot buildings; the Arroyo South Business Center, a450,000-square-foot flex-industrial development designed as sevenmulti-tenant buildings broken into 5,000-square-foot to15,000-square-foot spaces; and Arroyo Buffalo Plaza, a32,000-square-foot retail development anchored by PT's Pub. Allthree projects are slated for completion by the end of the firstquarter of 2009.

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Boylston expects the already completed industrial space to befully leased by the time the new industrial space is completedearly next year. "Las Vegas has been very land constrained forindustrial development for a long time," he says. "There has notbeen any of this type of product in our submarket except for us andit's still in favor."

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The newest office development is meant to attract larger userswho don't want to be a part of the typical multi-tenant lobby, whowant to enter into their own building. "The office market is slowerbut we are finding that because of how this project was masterplanned, with all the amenities directly adjacent, we are gainingmuch more than our fair share of the market."

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EJM's focus in 2009 will be on leasing. "We have minimally ayear and potentially two years worth of lease up," he says. "Wewere fortunate that we got all these under way [before the creditmarkets collapsed; finding construction loans is much moredifficult than the perm side."

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An official within Clark County's property management divisioncould not be reached for comment on the success of the program, butthe extension of the agreement is a sign the county is at leastsatisfied with the progress to date. Boylston says that "Everythingwe've done has given them returns exceeding the majority of theother ground leases they have."

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