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LAS VEGAS-The $800-million Great Mall of Las Vegas, heretofore slated to open late next year, is now three or four years out, at the soonest. Developer Triple Five Nevada is reportedly based its decision on the recessionary economy, which has lowered demand from both consumers and retailers.

The latest iteration of the project called for approximately 185 stores and 16 restaurants in a one-million-square-foot complex on just under 50 acres at the northeast corner of Grand Montecito Parkway and Deer Springs Way, adjacent to I-95 on the northwest edge of the valley. Triple Five’s vice president of planning James Grindstaff was not immediately available Tuesday afternoon for comment.

“We could start construction by late 2010 and 2011, but it all depends on the economy,” he reportedly told the Las Vegas Business Press. “Its opening wouldn’t happen until 2012, at the soonest.”

When the project was first announced in 2006, plans called for 1.575 million square feet of commercial office and retail space, with 250 shops and stores. The retail plans were scaled back, and converted from an enclosed mall format to an open-air format in January 2008, and the height of the twin residential towers planned for the property shrunk to 200 feet from 250 feet.

Reality is working against the project. The first quarter of 2009 produced the second consecutive quarter of negative net absorption as well as a record-high vacancy rate of 9.3%, according to Applied Analysis, a locally based business research and advisory firm that tracks 51 million square feet of retail space in the region. The firm attributes the performance to retailers that closed stores in the market and new developments that came to market with significant vacancy.

The market’s 10-year average vacancy rate is 3.3%. Applied Analysis principal Brian Gordon says the average will remain elevated for the next several years as the commercial retail sector re-balances.

“Consecutive, year-over-year double-digit declines have many retailers trying to forecast the bottom as financial obligations are outpacing operating cash flow, forcing them to seek mid-contract lease rate adjustments,” Gordon says. “With increased vacancies, many landlords are also being impacted, which may result in an increased incidence of foreclosures. A downward cycle not unlike the residential sector could be in full bloom by year-end.”

If vacancies continue to increase, new development will be less a factor than it has been. While an additional 2.5 million square feet was said to be under construction at the end of March, Gordon says that total included nearly 1.7 million square feet of product that has actually stopped development.

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