Group seeks aid for outlet mall

Diana Sahagun

Tuesday, June 18, 2002 | 9:47 a.m.

A high-end outlet mall might be built in downtown Las Vegas -- but it could come at a price.

More than $200,000 per year in city funds, to put a number on it.

When Chelsea Property Group announced plans in July to build a high-end retail mall on 39 acres across from the Clark County Government Center, company officials said the project would need no city subsidy.

But after Sept. 11, company executives say, the project suffered from a dramatic decrease in interest from prospective tenants due to a decline in tourism and retail sales in the market.

As a result, Chelsea Property Group will ask the Las Vegas City Council on Wednesday for a property tax rebate over 13 years, based on the same formula approved for the mall's neighbor, a proposed 56-acre furniture mart.

Without the subsidy, the project will not be built, according to a letter written by John Klein, senior vice president of real estate for Chelsea Property Group.

The council on Wednesday is scheduled to consider a rebate of 41 percent of the property taxes the project is expected to generate over 13 years, estimated at $220,000 per year, said Lesa Coder, the city's business development director.

The council applied the same formula to developers of the $1 billion furniture mart, amounting to approximately $40 million over 20 years.

Once taxes are collected from the outlet mall project, 18 percent will automatically go to the city for housing. The city will split the remaining 82 percent with the developer, according to the proposal.

Coder said she will recommend approval of the proposal, saying the company has experienced the same setbacks other local projects have experienced since Sept. 11.

"The reason for the additional influx of money is so they can offer better rates to their tenants, and get more competitive in the market so they can open their doors," she said.

If the council approves the rebate, company officials estimate they will close escrow on the property by July 1, with an immediate groundbreaking. The project is scheduled to open in October 2003.

The outlet mall will sit on 30 acres of the property at Grand Central Parkway and Bonneville Avenue. Two other parcels, at the north and south ends, will be sold or leased to other developers.

The 478,028-square-foot outlet mall is expected to draw 8 million tourists annually, according to the developer.