Desert Passage Becomes Miracle Mile

LAS VEGAS-Owners of the Shops at Desert Passage will re-brand it the Miracle Mile Shops as part of a $50-million makeover intended to complement the $200-million transformation of the connected Aladdin Hotel & Casino into the Planet Hollywood Hotel & Casino. Already, news of the transformation has helped improve performance at the 475,000-sf shopping complex.

Desert Passage co-owner David Edelstein said recently that the mall was more of a “deserted passage” when his company, Tri-Star Capital and RFR Holding, collectively known as Boulevard Invest LLC, made the $200-million-plus purchase of the center in 2004 from Chicago-based Trizec Properties. Within months of the retail buy, the adjacent hotel and casino declared bankruptcy and relinquished its assets for $635 million to a new owner, Planet Hollywood.

When the new owner acquired it, the Shops at Desert Passage was languishing thanks to 95,000 sf of vacant space, poor space configurations and several disgruntled tenants. Sales were averaging $400-plus per sf, which is solid performance for most markets but a problem in Vegas, where rents are much higher and sales at the competition–Forum Shops at Caesars or the Grand Canal Shoppes at the Venetian–post average yearly sales of $1,000 per sf.

News of the impending interior and exterior improvements to both the retail and the hotel has already done wonders for the center. Once plagued with 35% vacancy, the Moroccan-themed “deserted passage” is once again becoming a true retail competitor along the 50-yard line of the Las Vegas strip.

With several new retailers signed to join the mall, vacancy is down to 9%, rents are back up to $100 per sf, and sales are pushing $700 per sf, according to ownership. Edelstein told GSR last month that he expects sales will exceed $800 per sf once the renovations are complete.

Miracle Mile Shops features 170 specialty stores, 15 restaurants and live entertainment. The renovation of the exterior of the retail complex is expected to be complete by the end of the year. The interior work is slated for completion in 2007. The group began construction on the first phase of the Desert Passage project, which focuses on the center’s north façade area, in March.

The architectural firms Gensler of Nevada and the Friedmutter Group, in conjunction with general contractor Flagship Construction Co., are the team tasked with re-casting the interior of the retail center. Schadler Kramer Group in Las Vegas is the creative team responsible for the center’s new name, logo, re-branding efforts and creative materials. Robert K. Futterman & Associates LLC is handling the leasing. The Related Companies manages the property for Boulevard Invest.

Planned enhancements include new, more comfortable flooring (smooth terrazzo and wood instead of cobblestone), brighter interior lighting, streamlined and modernized storefronts and kiosks and a completely de-themed interior. One of the goals is to make the mall easier to navigate with an interactive directional system. In addition, Gensler is designing a three-story sculptural facade element that will better identify the interior entry to the mall.

Plans for the center’s exterior include adding people movers for better access into the mall, a backlit sidewalk water feature and state-of-the-art LED video offering continuous streaming imagery. In addition, the mall’s entrances and existing retail locations will be made over with floor-to-ceiling glass vestibule doors and storefronts. Finally, the new exterior will include a new patio and terrace to extend out to the sidewalk and invite potential customers inside.

As the changes are occurring, several new retailers will join the mall, including Urban Outfitters, Trader Vic’s restaurant, Ben Sherman, Quiksilver, Marciano and Pampas Churrascaria, a Brazilian restaurant. Other notable names to sign on in the past year include United Colors of Benetton, Sisley, The Coffee Bean & Tea Leaf, Las Vegas’ largest BEBE Sport store and Modern Watch Co.