Neonopolis being sold

Jennifer Shubinski

Tuesday, Dec. 7, 2004 | 10:54 a.m.

The distressed downtown Neonopolis mall has a buyer with the sale expected to close by year's end, its broker and operator said.

Although CB Richard Ellis, Las Vegas, would not identify the name or company of the buyer, informed sources said that the planned buyer is fronted by local developer Rohit Joshi.

When reached for comment, Joshi said he is not the buyer.

"People say a lot of things and it's not really true, I have nothing to do with it," he said.

When asked if he represents the buyer, Joshi declined comment.

Neonopolis, a three-story, 236,000-square-foot center, currently features several retail shops, the 40,000-square-foot Jillian's nightclub, the 71,000-square-foot Crown theater complex and two restaurants -- The Saloon Bar & Grill and La Salsa Cantina.

Joshi is known within the local real estate community as a behind-the-scenes operator who rarely seeks out community attention. He has been tied to plans such as working to bring Touro University College of Osteopathic Medicine to the city of Las Vegas (that university opened in Henderson), and as the point man to lure the Las Vegas 51s minor league baseball team to land in Henderson from Las Vegas.

Christina Roush, first vice president of investment properties at CB Richard Ellis, said no price was placed on the property when it was put up for sale earlier this year. She said she could not divulge what the accepted bid price for the property was.

"The asset went out unpriced, which is typical in offerings like this," she said. "This was not an income-based purchase, it's a turnaround property."

She said someone would buy the property based on its location and its physical attributes.

Roush said because of a confidentiality agreement, she could not comment on who the potential buyer was and said she also could not say how many offers the beleaguered property had received.

In October officials with CB Richard Ellis, which is handling both the sale and management of the property, told the Las Vegas City Council that it had three buyers interested in the property.

Current owner Prudential Real Estate Investors put the property up for sale after it continued to be mired in controversy since its opening in May 2002. Prudential owns the property on behalf of investors in a real estate investment fund for institutional investors, Theresa Miller, Prudential spokeswoman said.

The downtown property, which cost a reported $99 million to develop, was heralded as the beginning of downtown redevelopment, but never turned into the panacea that many had expected it to be.

Retail tenants came and left despite being near the Fremont Street Experience and its hotels and casinos. The property also never generated the foot traffic and sales that were expected, local industry experts said.

Guido Akerman, managing member of Viva Vegas Gifts, which has one of its 11-area stores at Neonopolis, said the location has been a difficult location since the beginning.

"If they have a miracle, maybe things can turn around," Akerman said. "Maybe these people have new ideas. Since day one we have not done well at all and almost everybody has left."

Akerman, who said he has heard a buyer had been found, said he has stuck with Neonopolis because he has a long-term lease and because he has exclusive rights to sell Las Vegas merchandise.

"I'm always thinking something will come up and they will keep up with their word and that they will bring more people, more stores," he said. "I made a large investment and I have a lease and I obey that lease. In the meantime I am over paying them rent."

When Neonopolis was put up for sale earlier this year, Miller said at that time the company was neither a developer or redeveloper and had no interest in working to revamp the property.

Earlier this year the property became embroiled in a dispute with the city after an Ohio businessman who planned to open a gay cabaret-style nightclub alleged he was discriminated against by Neonopolis' property management group, which at that time was New York-based JSS Advisors.

The city, which invested $32 million in Neonopolis, has closely followed the developments at the property since the discrimination allegations were made public.

John Restrepo, president of real estate research firm Restrepo Consulting said a number of factors contributed to Neonopolis' lackluster beginning.

He said the current owners don't appear to be interested in investing in management or committing the financial resources to make the property successful. The project was not accompanied by a residential component. And perhaps the most crucial piece of the puzzle -- it was ahead of its time.

"The project was a bit premature when it was built, downtown was not ready for that type of redevelopment," Restrepo said.

Restrepo said new owners that invest time and money into the property may be able to turn it around. He also said a renewed interest by the city and by investors in downtown will also make a difference.

"Assuming all those things are done, from an evolutionary standpoint, downtown is ready for a rejuvenated Neonopolis," he said.