Strip’s Hawaiian Marketplace loses appeal for many tenants

Jennifer Shubinski

Thursday, Dec. 9, 2004 | 10:55 a.m.

Less than a year after opening the Hawaiian Marketplace on the Las Vegas Strip the majority of its tenants have closed down -- including its food court -- leaving the owners to rework the center and the remaining retailers struggling to survive.

Opening up any type of retail outlet on the Strip to some would seem like one of the easiest things to do, the proverbial if we build it they will come. Malls along Las Vegas Boulevard are some of the highest grossing centers in the nation and even drugstores along the Strip are reported to be among those companies' highest revenue-generating locations.

With more than 35.5 million people visiting Las Vegas last year, many of them walking up and down the length of the Strip, who would think it would be any different?

The Hawaiian Marketplace hoped to reach out to the "average tourist" with its highly themed Polynesian decorations, entertainment and moderately priced stores.

"Everybody counted on the numbers being generated from Walgreens; they hoped to capture that market," said former property manager Glenda Shaw, of the drugstore just south of the Hawaiian Marketplace. "But you have to capture them and I don't think the Hawaiian Marketplace really captured the people. People always take the easy route, from A to B and they don't want to have to go through C to get there."

Surrounded by boxes full of holiday sun catchers and nightlights, Magdi Youssef worked to change out his inventory at his kiosk at the Hawaiian Marketplace.

"I haven't been making any sales," Youssef said. "I'm trying to put out stuff that might sell for Christmas."

Looking around at the empty center court of the Hawaiian Marketplace, Youssef said it probably won't matter much what he puts in his cart.

"Look, you see absolutely nobody," he said, adding that the management company is working with him in regards to rent.

At a nearby restaurant, with no customers to serve during the lunch hour, workers gathered around a TV. Some retailers left their kiosks and shops unattended, talking in the center's common area.

Worker Nazmi Baker, who was sitting in the Tropical Jewelry and Gifts kiosk, said he used to be surrounded by kiosks, and estimated that as many as 16 have closed since the opening of the center.

Now as he sat near the entrance of the closed food court, he lamented the traffic and zero visibility he has from the street.

"I sell some, but sometimes it doesn't cover rent," Baker said. "I feel bad; what can I do? Nothing."

Thirteen kiosks, five stores and six restaurants remain open at the 80,000-square-foot center, south of the Aladdin on the east side of the Strip.

"I think Brett had a big dream and thought he could entice people to be there," Shaw said. "What I think they miscalculated is how many other shows are on the block. They nor the tenants did their homework."

Many retailers blame the center's woes on mainly two things: traffic flow and visibility.

Some retailers claim that before the center opened, the project's developer, Brett Torino, promised to close down the sidewalk and redirect pedestrian traffic through the center that would generate 50,000 visitors a day.

That sticking point was a reason some retailers have failed, according to lawsuits filed against tenants for late rent in Clark County District Court.

In reply to a lawsuit filed by Torino's Metroflag Polo LLC against tenant China Star buffet, the restaurant's owners asserted that it had been stated to them as an enticement to sign a lease that Metroflag "would obtain permission from the appropriate governmental agencies" to redirect the sidewalk to increase pedestrian traffic. That lawsuit was recently dismissed, with the agreement of both parties.

In a reply to another lawsuit filed by Metroflag against tenant Animal Antics, Animal Antics also alleged that the sidewalk was not diverted into the center as promised.

As a result, both tenants claimed in their replies, pedestrian traffic did not venture into the center, hurting their business.

Torino said the center opened in late May with the premise that traffic would be directed, at least in part, through the Hawaiian Marketplace.

"When we opened, it became apparent to us that there has been some misunderstandings at the county and developer level as to what we could and couldn't do regarding pedestrian traffic," he said. "The county told us there can be no obstructions to pedestrian traffic and that changed the character of what we hoped to obtain with the marketplace."

Bobby Shelton, Clark County Public Works spokesman, said once the county became aware that the sidewalk had been closed to force traffic through the center, they contacted Torino.

"We explained to them that they can't do that," he said. "If they want to do something, they have to come up with a plan."

Shelton said on a number of occasions the sidewalk was closed, but instead of enticing people into the property, many people chose to walk in the street.

"That became a problem," he said. "People are like water, they like the path of least resistance."

In November, Torino received approval from the county commissioners to create an alternative sidewalk at the center.

"I'm not going to say that it will help anything, we have gone back and enhanced our plan," he said. "It gives us the opportunity, when looking at a macro level, to make some design enhancements that could be beneficial."

As far as obstructions blocking the view from the sidewalk, Torino said those two freestanding stores at the front of the center were always in the plans.

"I wouldn't characterize them as obstructions but they've always been there, that's why people walk around and through," Torino said.

He said the center is a destination marketplace that is supposed to draw people in with the mix of stores and restaurants and daily entertainment, such as hula dancers.

Torino said he has plans for other alterations to the center, but declined to elaborate.

Shaw, president and owner of Shaw and Associates and ASR, the property management arm of the company, said she argued from the beginning that because of those obstructions and the design of the center it blocked visibility and recognition for the tenants.

She also said the tenant mix did not act as a draw for potential shoppers.

"If you were an In-N-Out (Burger) they would find you, but if you put Mr. Hot Dog back there, they're not going to get back there," Shaw said.

But not everybody considers the Hawaiian Marketplace a lost cause.

Dolly de Leon, owner and manager of Weddings on the Strip, opened a wedding chapel at the center in November and has plans for a banquet facility that will sit up to 300 people.

Leon had a location in the strip retail center that was torn down to make way for the Hawaiian Marketplace.

"It is much prettier than it was; before it was not really something to be proud of," she said. "I am really looking forward to it."

Torino said he is working to address the needs of the existing tenants and once those issues are resolved, he will then make decisions about changes to the center.

"We don't want a knee-jerk reaction, we want to be thoughtful in how we approach this," he said.

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