Developer focuses on quality projects that can survive times

Kirk Boylston came to Las Vegas during the boom to oversee development of The Arroyo business park at the Las Vegas Beltway and Rainbow Boulevard.

It's been a challenge, particularly with the downturn in the economy.

As regional director for EJM Development, Boylston manages a company portfolio of 5.4 million square feet in the valley. The Arroyo, anchored by Best Buy, Wal-Mart and Home Depot, is his jewel.

"It's not often you get to master-plan and develop a 450-acre mixed-use project," Boylston said in the lobby of Arroyo Corporate Center's two-story office building. "EJM is one of the few companies that can perform on a project of this scale."

EJM signed a 50-year ground lease with Clark County Aviation Department, similar to Thomas & Mack Development Group's agreement with the county for Beltway Business Park.

The Arroyo is a good example of how quality projects survive tough economic times while other projects have been canceled or delayed, Boylston said.

"We put a lot of thought into every single detail of this project, from traffic movement to building layout and integrating the whole project, landscaping, monumentation. And we spent a lot of extra money to accomplish that," he said. "But in the long run, that will make this project more successful."

EJM principal Jerry Monkarsh said the company will probably invest about $750 million in the project, including infrastructure work.

EJM recently leased 13,450 square feet of office space at Arroyo Corporate Center to Travelers Insurance, a Fortune 100 company, for $2.35 million over 64 months. The office component of the mixed-use development consists of 125,000 square feet in two buildings.

EJM also owns the 110-acre Arrowhead Commerce Center, Spencer Helm Business Center near McCarran International Airport, Century Park at Russell Road and Interstate 15, Warm Springs Business Center and Craig Distribution Center in North Las Vegas.

The Los Angeles-based company was named top developer in Las Vegas in 2008 by Southwest Contractor magazine.

Question: What are the biggest business challenges you face today?

Answer: Our main challenge is dealing with leasing and financing. But really it's more leasing. Financing is more of an EJM portfolio issue than a local issue.

We don't have a lot of financial rollover, a building that has to be financed but with increasing equity requirements. They may have a project that's cash-flowing, but when it comes time to refinance, they can't come up with equity. EJM doesn't have that problem. We're well-capitalized and not overleveraged.

Question: How is Las Vegas different from when you came here six years ago?

Answer: The economy is different. A lot has changed. It's grown a lot and the commercial market got more sophisticated. I think office tenants are exposed to a better product and have become more discriminating. They look for a better environment for their employees. It's what we try to incorporate into The Arroyo project and create an environment that helps us get tenants and keeps us leased during good times and bad times. Our portfolio has remained relatively stable. We kept vacancy rates low, below 5 percent.

Question: Who was your mentor?

Answer: The first big one was in Los Angeles. I worked for Cabot, Cabot & Forbes. It was the seventh-largest developer in the country at the time. The regional manager (Ed Ball) liked to play golf and make deals and he let us take the deal from start to finish and really learn the details of the project. I think it's good to let people run and advance themselves when they can.

Question: Do you think Las Vegas will rebound? If so, when?

Answer: Of course it'll rebound. It's a matter of when and how fast. I've given up on prognosticating. I think when jobs come back and the financial market comes back, the whole country will come back. And like it or not, Las Vegas is dependent on the rest of the country.

Question: Where are the best places to develop in Las Vegas?

Answer: We think the southwest is the best growth location. The reason is positioning. It's halfway between Summerlin and Henderson. You can be close to the Strip, but you don't have the congestion of the Interstate 15 corridor. It's good access for customers and employees.

There are companies that want to be as close to the Strip as they can, but a majority of businesses now don't necessarily serve the Strip.

Question: We've seen rising vacancy in office and retail. How is leasing at The Arroyo?

Answer: It's slower than it was, but it's still steady. We're fortunate to be outperforming the market, but it's really a function of the master plan that we've done here. There are a lot of good, freestanding buildings out there with no amenities and they're suffering.

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