CULTURAL FINE TUNING

Joseph Palermo, director of the Southern Nevada Museum of Fine Arts, was skeptical when the suggestion to relocate the museum to downtown's Neonopolis first surfaced.

"I thought to myself, 'This is a commercial building, and I'm not so sure that an arts center is going to work here,'" he said.

But after visiting the space a few times, he changed his mind.

"You know what? This is just the cutting-edge thing that might work," Palermo said. "And this is Las Vegas; just about anything you want to try, you can do it."

So they're doing it. And believe it or not, they're not the only ones taking over vacant space in the long-troubled mall at the base of the Fremont Street Experience.

The museum expects to open by the end of the month on the second floor. Next door will be an arts center with working artists' studios in what used to be the mall's food court.

Telemundo Las Vegas Inc. is moving into 17,500 square feet on the third floor. An upscale nightclub, Wet Ultra Lounge and Bar, expects to open on the first floor in time for New Year's Eve.

Sushi Hama and Taste of California restaurants opened this summer, and two more, La Luna Italian Restaurant and El Nopal, plan to open soon.

If it comes together, it would mark quite a turnaround for the mall, which until recently was occupied only by a Galaxy movie theater, Del Prado Jewelers and Jillian's, a sports bar/amusement center.

"We are pretty much 75 to 80 percent leased," said Rohit Joshi, who represents the property for the owners, Wirrulla LLC. "I think we have just landed. Finally."

It's taken more than two years to learn what works, Joshi said. That includes learning what doesn't go together, such as trying to build a downtown attraction around offerings already available elsewhere in the valley, such as movie theaters and retail stores.

"Why would someone from the suburbs come downtown to see a movie? They don't," Joshi said. "At the end of the day, people don't come downtown to buy this stuff."

What they're hoping people will come downtown for is art, cultural events and nightlife.

Carl Corcoran, who's overseeing the working artist studios in Neonopolis, said the idea is modeled on the Torpedo Factory Arts Center in Arlington, Va., which has 500,000 visitors a year.

To boost interest, Joshi said he is charging just 85 cents per square foot in rent for the art space, plus a percentage of sales. He says the amount represents what it takes for the shopping center to break even on the cost of maintenance, insurance and taxes.

All told, Joshi said it costs about $3 million annually to keep Neonopolis afloat, money that's now coming from a reserve fund the owners created when they bought the property.

"It is a difficult time, it is a difficult area," Joshi said. "We are trying every trick in the book."

Michael Kammerling, senior vice president for retail at Grubb & Ellis, said low rates appear to be a strategy to generate foot traffic in a mall that's been largely forgotten by customers, despite its prominent location.

"Right now, the whole economy is going through a challenging time," said Kammerling, who isn't involved with Neonopolis. "People aren't spending the money they have been spending in recent years"

Matt Meagher is hoping to draw locals and tourists to his 12,000-square-foot Wet Ultra Lounge, which will be similar to a club he and his wife operate in El Paso, Texas.

He said the club will follow the lead of high-end nightclubs at resorts on the Strip, complete with celebrity guest hosts.

"It's the same kind of model," he said, but "being downtown, it's just a little bit different. It's different marketing. It's different clientele."

"There's a whole lot of revitalization going on downtown. You're talking about five major businesses opening up between now and the end of the year."

Las Vegas Mayor Oscar Goodman said, "I'm rooting for them," and was cautiously optimistic that Neonopolis could finally turn a corner.

The city has a stake in the mall. It owns the parking lot underneath the building and lets Wirrulla use it at a subsidized rate. The city may dedicate some of those parking spaces as employee parking for Telemundo.

"That's certainly a good trade for the city," Goodman said. "It's incidental, as far as the income the city would get."

City leaders have expressed frustration with Neonopolis' glacial development, especially given its prime location at the corner of Fremont Street and Las Vegas Boulevard and the fact that other downtown developments are progressing.

Goodman has often referred to the building as an "albatross around my neck."

"It's been a disaster, as far as I'm concerned," he said. "But I think he's putting the pieces in place now.

"I certainly hope that it comes to fruition."

Review-Journal writer Benjamin Spillman contributed to this report. Contact reporter Alan Choate at achoate @reviewjournal.com or 702-229-6435.