Crush of people, vertical construction predicted for downtown Las Vegas

Downtown Las Vegas looks a lot different today than it did five years ago, and five years from now it will have another 1,000 residential units and an increased employment base of 3,500 to 4,000 people, a panel of business executives predicted Thursday at the Golden Nugget.

Population density will reach critical mass of at least 100 residents per acre, creating an urban environment where people will be "colliding with each other," said Zach Ware of Zappos.com, the online retailer that's moving its corporate headquarters to the former Las Vegas City Hall.

"You're not going to see any more empty land," Ware said at the Las Vegas Alliance program presented by the International Council of Shopping Centers. "You'll see a lot of vertical construction, not dirt."

Bill Arent, business development director for the city of Las Vegas, said downtown has seen a lot of retail activity, with year-over-year absorption of 18,000 square feet on existing inventory of about 628,000 square feet of retail space.

One audience member asked the panel about the prospects of bringing a grocery store to downtown Las Vegas.

That's the old chicken-and-egg conundrum, said Andrew Donner, president of Resort Gaming Group. Grocers want to see more residents before they build a store, and people won't live downtown unless they have a grocery store. Given the financial markets today, it's tough to bring projects from planning to construction, he said.

Once developers understand the missing components for downtown, they'll look at bridging that gap, Ware said. Grocery stores do have some demographic requirements they're going to have to "stretch on," he said.

"It's like a piece of clay," he said. ". You start molding it until you get the shape you want."

Molasky Group of Cos. President Rich Worthington said retailers have to look at urban areas differently than they do the suburbs.

"You have 41,000 people in the downtown area. You have to capitalize on retail opportunities. We have to educate retailers about the aspects of the demographics. You've got to get them to think differently from their one-mile, three-mile and five-mile demographics," Worthington said.

Donner, who was instrumental in bringing Zappos to the former City Hall, said people will be surprised at how many Zappos employees are going to live downtown.

Worthington is preparing for that movement. Molasky, developer of retail, office and multifamily properties, has 250 units planned for downtown. The challenge for high-density residential development downtown is the incredible cost structure, he said.

"Even if you have $10 million, you still have to bring in lenders and they don't want to take the risk," he said. "Land is more expensive. It's $200,000 to $300,000 an acre on the high end in the suburbs, and $130,000 on the low end. Downtown is (more expensive)."

Panel moderator Terry Murphy, president of Las Vegas consulting firm Strategic Solutions, said a recent survey suggests that Las Vegans' perception of downtown has changed dramatically in the last five years. More than 70 percent of respondents have a positive image of downtown, and 81 percent believe downtown is headed in the right direction.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.