‘Mixed-use’ developer growing in Las Vegas

Friday, June 30, 2000 | 10:58 a.m.

A tightly held Las Vegas-based real estate developer is taking the unorthodox approach of building mixed-use centers instead of focusing on one market segment.

Representatives of Great American Capital (GAC), 8687 W. Sahara Ave., say the strategy should serve them well in their plans to undertake future -- but as yet undisclosed -- projects.

"Great American Capital has probably done what some other companies haven't done in that most either build a shopping center, build apartments or build office buildings," said Kit Graski, senior vice president of CB Richard Ellis.

"These guys are really good at (building) shopping centers, but because they fit other uses onto parcels that may be too big for just a shopping center, they become players in other categories," he said. "If there was a category called 'mixed use,' they would be at the top of it."

Ronnie Schwartz, managing director of GAC, said the strategy has served him well in the Las Vegas area, where he has completed 12 centers in three years and has eight more either under construction or close to groundbreaking.

"The challenge of mixing uses, like office development with retail, is to make sure you are creating the right synergy," Schwartz said.

Matt Bear, vice president of retail properties for Colliers International in Las Vegas, said mixed-use properties are typically harder to finance, riskier to build and require much more work.

"Banks tend to look at them much closer, the lending guidelines are tougher and it's harder to get financing," Bear said.

The synergistic element of GAC's newest project is a block of medical offices being developed in conjunction with a 13-acre shopping center at Lake Mead Drive and Eastern Avenue in Henderson. The 120,000-square-foot Eastern Marketplace, where ground was broken last month, will include a U.S. Bank, Wells Fargo Bank, Smart & Final, McDonald's, Quizno's, Carrabba's Italian Grill, Manhattan Bagel, Chili's, Tommy Rocker's South Side Grill and a 10,000-square-foot day spa.

The medical offices are being built to fill the needs of the nearby St. Rose Dominican Hospital.

The $30 million project is a joint venture with Gil and Rosalinda Strange, who have owned the property for 10 years. The retail end was 90 percent preleased, while half of the medical offices were leased in advance.

Critics of mixed-use centers say developers often acquire too much land and build something else on it as an afterthought.

Schwartz said that isn't the case with his company because his 15 employees research the needs of the surrounding neighborhood and occasionally write some leases some developers might consider risky.

For example, Schwartz said the lack of an anchor tenant didn't discourage construction of the Craig Valley Plaza, an 80,000-square-foot center on the northeast corner of Craig Road and Valley Drive in North Las Vegas. One of the major tenants turned out to be Gold's Gym.

"Health clubs are not thought of as a traditional anchor," Schwartz said. "But once we saw that some of these places have 7,000 members, many of them using the facilities every day, and that in the area, there were no other health clubs for miles, we decided to go with it."

Colliers International's Bear, who said he has conducted business with GAC, said the gym is an unorthodox traffic generator, but one that has worked extremely well for the company.

"Gyms generate a lot of people," Bear said. "Many will go there more than a grocery store. It creates people and shopping trips and that's what retailers are looking for."

In addition to diversifying the type of project it builds, GAC is developing geographically. The company has projects in Green Valley, on the fringe of Summerlin, in northwest Las Vegas and along the rapidly growing Craig Road in North Las Vegas.

The 20 projects completed or under way represent more than 1.7 million square feet of development, including 1.3 million in retail, 300,000 square feet in flex and commercial business park space and 150,000 square feet of office space.

Schwartz said GAC was formed by two branches of the Schwartz family who have done business together in Southern California since 1978. In the mid-'80s, the company entered the Las Vegas market.

Today, about 90 percent of the company's holdings are in Nevada, with the remaining 10 percent in California.