Belz, Showcase malls to expand — others quiet

Grace Leong

Wednesday, May 23, 2001 | 11:03 a.m.

Aside from expansion plans by Belz Factory Outlet World and Showcase mall, most big Las Vegas-area mall operators didn't have much to announce at this week's conference of the International Council of Shopping Centers.

Simon Property Group Inc. of Indianapolis, which owns the Forum Shops at Caesars, said previously announced plans are still on tap to expand the mall by 200,000 square feet but have been delayed by Caesars' acquisition by Park Place Entertainment Corp. And General Growth Properties Inc. of Chicago, the owner of the Boulevard and Meadows malls, said it has no immediate Las Vegas expansion plans.

Memphis, Tenn.-based Belz Enterprises' said it plans to build a 50,000-square foot free-standing strip center adjacent to the 630,000 square-foot mall in Las Vegas.

Belz said it enjoyed "record-breaking numbers" of shoppers at its five major factory outlet shopping centers in 2000. Some 34.9 million people visited a Belz outlet in 2000, an increase of nearly 1.3 million, or 3.8 percent, since 1999. These volumes came in a year in which U.S. outlet sales nationwide fell by more than 1 percent, Belz said, citing a report by the International Council of Shopping Centers (ICSC).

Among the Belz outlet properties, traffic increased nearly 7 percent to about 8 million people at the Belz Factory Outlet World in Las Vegas in 2000, Belz said in its Spring 2001 quarterly report.

Errol Flynn, vice president of Belz Construction Co. Inc., the mall's builder, said construction of the new building, located at the southeast corner of Robindale Road and Las Vegas Boulevard, will begin this fall and is scheduled for completion in spring 2002.

Andrew Groveman, senior vice president of Belz Enterprises, in the report, also cited Belz's stategy to "locate malls in highly trafficked areas that benefit from both tourism and a strong resident population."

"Nevada's strong performance underscores the reality that shopping is a key activity for vacationers -- now something done by more than 70 percent of all leisure travelers, according to recent studies," the report said. "Las Vegas is the fastest growing city in the United States, due both to employment opportunities created by the tourism industry and the city's rising role as a high-tech and distribution center."

Separate plans were announced for the Showcase Mall on the Las Vegas Strip.

Forest City Enterprises Inc. of Cleveland, which co-owns the 234,000 square-foot mall with Henderson-based Makena Development Corp., plans to add another 60,000 square feet to the property.

Barry Fieldman, Makena's president, said the expansion project -- estimated to cost more than $30 million -- is expected to begin in early 2002 once project plans have been approved by Clark County.

"We're adding another 60,000 square feet to the property, just north of the giant Coca-Cola bottle on the MGM driveway," Fieldman said. "The site where Denny's restaurant and Martha's Gift Shop are located will be demolished and the multi-level 60,000 square-foot building will be built in their place."

"This project also includes extending the existing Showcase mall and making it more pedestrian-friendly by extending the sidewalk in front of Denny's by several feet and providing some outdoor dining," he said. "We are also looking to add two or three big name retailers, estimated to be in the 10,000-20,000 square feet range each."

Separately, Fieldman said a Makena entity is also involved in New World LLC, a partnership created to develop a previously announced $4 billion project called "World Ports Resorts," which includes proposed hotel-casinos and similar tourist and convention businesses on the south end of the Strip across the street from the Mandalay Resort Group properties.

The New World partners include Makena Entertainment LLC, a subsidiary of Makena Development; Tom Gonzalez, a co-founder of San Jose-based Commerce One, a business-to-business software company and Desert Land LLC, a company controlled by Howard Bulloch and David Gaffin. "Everything is still in the planning stages. We are planning to build three hotel-resorts and one non-gaming property and to connect these properties possibly by a mall or a retail store," Fieldman said.

New World announced early January its acquisition of a 77-acre land parcel across the street from Mandalay Bay for the project.

Meanwhile, Forest City, a co-owner of the 950,000 square-foot Galleria At Sunset mall in Henderson with Leslie Dunn, a local real estate developer, said the mall is considering expansion and may, if approved, add at least one more anchor tenant to its four existing tenants, Dillard's, Robinsons-May, J.C. Penney's and Mervin's.

Forest City, which said it has no immediate plans to build more malls in Las Vegas, also manages the 500,000 square-foot Grand Canal Shoppes at the Venetian, which is owned by the Venetian hotel-casino.

Grand Canal Shoppes is considering adding another 250,000 square feet, said Fred Walters, general manager of the mall.

Meanwhile, Andrew Blair, executive vice president and chief operating officer of TrizecHahn Development Corp., a subsidiary of TrizecHahn Corp. of Toronto -- the developer of the 450,000 square-foot Desert Passage mall at the Aladdin -- downplayed a series of lawsuits filed by tenants complaining that the mall hasn't met traffic flow projections.

"Traffic at the Desert Passage is phenomenal. We're averaging 50,000 people a day, and our sales are over $600 a square foot. That's 75 percent better than the industry average of $340 per square foot for shopping centers," he said.

"In two to three years, we expect Desert Passage's sales per square foot to be up there with figures quoted by our competitors, when the project is fully stabilized."

TrizecHahn Corp. indicated in January its intention to sell its 65 percent ownership in the mall. But Blair stressed: "It won't entertain any idea of selling until the project is fully stabilized and can generate the kind of proceeds we expect. The project deserves a premium price."

Blair also said TrizecHahn doesn't require an anchor tenant for the mall, as some tenants allege. "The entire Aladdin project, that is, the casino, mall and their location within heart of the Strip, is the anchor."

Blair said the mall is now 90 percent leased, with seven new stores scheduled to open later this year. This includes Chiasso, a store specializing in contemporary gifts and home fashion accessories; Crabtree & Evelyn, an English soap and bath accessories shop and the Metropolitan Museum of Art store. Family restaurant Cheeseburger at the Oasis, Nestle's Tollhouse Cookie cafe, and five-star supper club Prana will also be opened.

TrizecHahn, which also owns a stake in Fashion Outlet Las Vegas mall in Primm 35 miles south of Las Vegas, said it has no plans to build other malls in Las Vegas for now.