Furniture mart rebate OK’d

Diana Sahagun

Thursday, Nov. 8, 2001 | 9:41 a.m.

With news that a new industry is heading to downtown Las Vegas, officials for the Nevada Development Authority wasted no time in announcing plans to court spin-off business.

Developers for the World Market Center have committed to opening a 7.5-million-square-foot furniture mart downtown, which means, said NDA President Somer Hollingsworth, manufacturers will have access to the largest furniture mart in the West.

"We think it opens the door for us to go out and solicit furniture manufacturing companies that can be huge and employ huge numbers of people," Hollingsworth said. "We think there's an unlimited amount of furniture manufacturers that would be a perfect match for Las Vegas."

The fate of the furniture mart on 57-acres near Grand Central Parkway and Bonneville Avenue has been uncertain for months. City officials -- unsure as to whether the project would help revitalize downtown -- have struggled over how much money the city would be willing to spend to guarantee the developers' $1 billion investment.

But the City Council, citing a clearer understanding of the furniture industry, on Wednesday unanimously approved granting the developers a 50 percent property tax rebate over the next 20 years, estimated to be about $40 million. Developers had been waiting on the council's decision before committing to construction of the furniture mart.

When completed, the World Market Center will be the largest home furnishings complex in the West.

Officials in High Point, N.C., have been skeptical, and even fearful, of the mart, which would rival a 10-million-square-foot project in that city.

Las Vegas Mayor Oscar Goodman said he was lukewarm toward the idea when it originally was presented. He called it a "foreign concept" and said he wasn't convinced that the project would help revitalize downtown. Goodman initially said a 10 percent tax rebate seemed more appropriate.

But everything changed Sept. 11, he said, when officials learned that a city dependent on gaming becomes vulnerable when the economy takes a downturn.

Goodman said he began to learn more about the furniture industry and the implications of giving away tax revenue. But, once he understood that the developers had to pay property taxes before receiving the rebate, he decided that the city had nothing to lose.

"The city isn't out any money," he said. "And we have a new industry, a downtown that needs it, and that's what redevelopment is all about."

Councilman Lawrence Weekly, who represents the area, had similar concerns. At least initially. But, after meeting several times with the developers, Weekly decided that the project would benefit downtown.

"My concern was the developers didn't ask for anything in the beginning, and then that changed," he said. "I was concerned about (whether) this thing was going to get built or not."

Councilwoman Lynette Boggs McDonald traveled to High Point last month and said she was impressed with the hundreds of buyers from around the world who traveled there for conventions. The city, though, lacked the entertainment and hotel accommodations available in Las Vegas.

"Every buyer I talked to wanted to be in Las Vegas," she said. "High Point has one hotel, and there's nothing to do. The buyers said there was no reason to bring their families. Having seen it up close and personal, this is a win-win situation."

The project is proposed to open in phases. The council in May approved the first phase -- a 10-story, 1 million-square-foot showroom. Construction on this phase should begin in the spring, with an opening in 2004.

Phase two calls for a convention center, including temporary exhibit space. The third component will house three separate buildings, including areas for home decor and accessories. The final phase will be a retail home furnishings mall open, to be open to the public by 2007.

According to a study by Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas, the city could benefit tremendously because of the furniture mart.

More than 35,000 additional jobs and $60 million in additional local and state taxes will be generated when the project is fully developed, according to the study.

Developers expect the project to attract more than 1.7 million new visitors to Las Vegas, many of whom will be international buyers.

"Are there any risks? Absolutely," Schwer said this week. "It's going to be the risk of a competitive nature, but Las Vegas is head and shoulders above High Point. The key thing is diversification within the travel and tourism industry."

The developers must still negotiate a final development agreement with the city. Shawn Samson, a managing partner of the World Market Center, thanked the council for its decision and said he was excited about being part of downtown redevelopment. "This new development will be a part of the overall vision of the renaissance of downtown," he said. "We will pave the way for other developments and projects looking to come to downtown."