Millions of square feet of upscale retail development remain in the pipeline for Las Vegas despite a shaky national economy that has sales drying up in Southern Nevada.
Mall developers, particularly those behind major Strip casino projects or high-profile locals malls, say foot traffic from nearly 40 million tourists annually and a local population approaching 2 million means there is still room for the retail market to go up.
They say major national retailers will open second, third or even fourth locations in Las Vegas and that foreign companies will consider Las Vegas as a place to establish an American presence.
“If you are a foreign brand trying to come to the United States, you can have millions of eyeballs,” said Joel Simkins, an analyst at Macquarie Securities.
He cited statistics that show as many as 20 million people annually stroll through the Grand Canal Shoppes, a General Growth Properties mall in The Venetian.
“That is a huge marketing opportunity,” Simkins said. “Theoretically, you are capturing half the people who come to Las Vegas.”
General Growth, one of the largest mall owners in the country, has a big stake in Las Vegas beyond the Grand Canal Shoppes.
The company has about 4.9 million square feet of retail, including Fashion Show, Boulevard and Meadows malls and the Shoppes at Palazzo.
It is building the Shops at Summerlin Centre, a retail center that will have about 100 stores, including Nordstrom, and open in 2009. General Growth is also a partner in the High Street mall at Boyd Gaming Corp.’s $4.8 billion Echelon resort, under construction on the Strip. By 2010 the company expects to have 6.7 million square feet of retail space in Las Vegas, a 37 percent increase from today.
“There are still a number of retailers who have not opened in Las Vegas, foreign retailers, designers who might be interested in their own stores,” John Bucksbaum, CEO of General Growth, said Tuesday during RECon, the International Council of Shopping Centers’ annual real estate convention at the Las Vegas Convention Center.
In February, taxable sales in Nevada were $3.6 billion, the lowest monthly total yet during the current economic downturn. Including bars and restaurants, it was a decrease of more than 9 percent from the previous year.
Anthony Marnell III, a partner with MGM Mirage in the $1 billion M Resort under construction on Las Vegas Boulevard south of town, said the downturn hasn’t curbed his enthusiasm for a 1 million-square-foot mall by developer Taubman Centers.
“This is the best time in the world to be under construction,” he said. “You can build while you are in the lull and then, hopefully, open up as the economy is starting to recover.”
Taubman, MGM Mirage and Marnell announced their mall plan Monday at the ICSC convention. They said the mall would open in 2011 or 2012 but didn’t identify anchor tenants.
The mall will primarily target local customers around the Southern Highlands area, a part of the Las Vegas Valley developers think is underserved for retail.
“That whole market to the south is going to explode,” said Robert Taubman, chairman, president and chief executive officer of Taubman Centers.
Plans for a new international airport south of Sloan and continued migration to neighborhoods south of Blue Diamond Road will drive development well beyond the current downturn, Taubman said.
“We don’t think it is going to stop,” he said of a population shift into the south. “The (excess) housing will burn itself off. But as it does, every day there are going to be more people moving there.”
On a smaller scale, Las Vegas city officials were at the convention seeking to attract retail to downtown.
The largest available space is at the Union Park site, a 61-acre area west of the Fremont Street Experience and south of Charleston Boulevard.
Developers Newland Communities are proposing plans for 475,000 square feet of retail mixed with housing, offices and cultural centers at the site.
The city is also touting the shuttered Lady Luck hotel-casino as a potential retail site.
The hotel, now owned by Los Angeles-based CIM Group, is projected to have as much as 200,000 square feet of retail, residential and entertainment space when it reopens, an event scheduled for 2012.
Contact reporter Benjamin Spillman at firstname.lastname@example.org or 702-477-3861.