Moving in on the furniture market

Jennifer Shubinski

Saturday, Nov. 13, 2004 | 12:12 p.m.

WEEKEND EDITION

November 13 - 14, 2004

Las Vegas, known the world over for its nightlife, entertainment and gambling, is hoping to cash in on a different industry: furniture.

Many expect the World Market Center -- now under construction with 1.3 million square feet in downtown Las Vegas -- to be the beginning of a new industry in the valley and to be the economic kick-start that downtown needs.

"I think it is going to diversify our economy overnight," Las Vegas Mayor Oscar Goodman said. "I think it will make Las Vegas the focal point on a worldwide basis for furniture displays."

Publicly announced four years ago, the World Market Center was viewed with skepticism and was even the butt of industry jokes for a time. But now industry leaders have said the furniture market will be a force to be reckoned with and could affect existing regional markets such as those in San Francisco, Dallas and Tupelo, Miss., as well as the main industry market in High Point, N.C.

The Las Vegas furniture market, planned to be an eventual 7.5 million square feet or more of furniture and home-accessory space, is expected by some to revitalize an industry that is struggling to adapt to a changing global marketplace.

The first Las Vegas market, scheduled for July 25-29, will include at least 2.3 million square feet of exhibition space at the World Market Center site at Grand Central Parkway and Bonneville Avenue and at the Las Vegas Convention Center. It is expected to draw 40,000 to 60,000 attendees.

In the World Market Center's first week of registration -- which opened online during the fall High Point market -- 1,200 people signed up to attend, according to Dana Pretner, Las Vegas market spokeswoman.

"What is significant about our project is it is a brand new addition to the economy," Shawn Samson, co-managing partner, said. "There are no existing furniture-industry trade show facilities in Las Vegas or Nevada. By establishing that base, we are clearly being told by the industry that there will be additional opportunities."

Furniture markets are not open to the public. Instead, exhibitors and manufacturers use the shows solely to pitch products to retail stores. Markets around the country are generally held twice a year and can last from a few days to more than a week.

What is unique about the World Market Center is that developers are pitching it as space that can truly be used year-round by companies.

"Companies have said they plan on using the permanent showroom as a sales and distribution facility throughout the year, not just twice a year as goes on in other cities," Samson said.

There are 230 permanent showrooms planned for the first phase of the World Market Center.

Another unique concept at the World Market Center is the two floors of showroom space that will cater to those who work in interior design and to buyers of hotel furniture. The design center, also not open to the public, will be open year-round.

"We are very excited about that, that we will be able to draw on a year-round basis not only from people in Las Vegas, but other people in the West, and that people can look at this as a major facility that can provide the whole range of home furnishings," Samson said.

Beyond the feature of the World Market Center, industry experts said Las Vegas itself boasts amenities that will appeal to buyers throughout the year.

"One of the great advantages of Las Vegas over North Carolina is you can't get there," said Keith Schwer, UNLV's Center for Business and Economic Research director. "And once you do get there (North Carolina), there's not a place to stay, where we have great travel connections and ample accommodations."

The World Market Center also is encouraging manufacturers to introduce new product lines at its biannual shows -- to be held in January and July. New offerings are a key ingredient in drawing people to a trade show and for a show's importance within the industry. The majority of new products are introduced at the High Point markets, held in April and October.

"Companies don't usually introduce new product at regional markets," said Dave Palmer, World Market Center general manager. "That's the essence of a good market -- new and exciting product."

Developers said the presence of new products and the expected draw of exhibitors and buyers nationally and internationally will make the Las Vegas market more than a regional one.

"I don't think it's going to be a regional market when it opens up. People want it to be more than that," Palmer said. "It will be an international market with international staff."

Samson said there isn't a U.S. trade show that specifically caters to an international audience, even though many international buyers and exhibitors attend other markets. Las Vegas is in the unique position, because of its infrastructure, to make its furniture show truly a market that reaches out to the international community, he said.

"We have the opportunity, for the first time, to make it a worldwide event not only to draw international exhibitors, but also international buyers," Samson said.

But not everyone expects it to become more than a large regional market.

Randy Spak, president and chief executive of Lane Home Furnishings, said the Las Vegas market is simply a regional market for the West Coast. Lane has plans for a Las Vegas showroom, but also shows in High Point. The company is pulling out of the San Francisco furniture market.

"The product development cycle is April and October (High Point furniture market months), and that's the way it's always been," he said.

Whether the World Market Center grows or stays a regional market, it is seen as a boon for downtown redevelopment.

The World Market Center, as well as the opening of the Las Vegas Premium Outlets in August 2003 near Interstate 15 and Grand Central Parkway, appear to be the shot in the arm that downtown needed.

"The World Market Center is the cornerstone project for downtown redevelopment," said Steven Ressler van Gorp, redevelopment officer for Las Vegas.

An economic impact study for the furniture mart prepared by Schwer found it would annually generate more than $60 million in additional local and state tax revenue, and lure more than 1.7 million new visitors to Las Vegas.

It also would add almost 35,000 jobs to the local economy and have more than a $1.5 billion impact on annual personal income, according to the study.

Developers said the actual economic impact will far exceed the 2001 study's projections because the size and scope of the project have grown.

"It's development of a new business activity and it's really leveraging what we do very well," Schwer said.

Samson said the World Market Center is working with downtown hotels to explain how there can be a benefit if the "new captive audience is brought downtown."

The World Market Center will be the beneficiary of the city's tax increment financing program, which funnels property taxes back to the developer for 20 years as an incentive.

In this case, 18 percent of the property tax revenue will go toward local low-income housing initiatives, and the remaining amount will be split between the city and the developers. The money that is returned to the World Market Center must be put back into the site.

The World Market Center is to be built in phases, with seven buildings on 57 acres formerly owned by Union Pacific Railroad Co. While 7.5 million square feet is planned, the land can actually hold up to 10 million square feet of exhibit space.

Original plans called for buildings to house permanent and temporary exhibits and a convention center. Ideas for office, retail and residential components were floated.

But with the demand developers said they are receiving from retailers who want permanent showroom space, the best use of the land is a dense complex of permanent showroom buildings.

"We are constantly looking at the master plan. One of the challenges has been accommodating all the demand that we have," Samson said. "We are very focused on using the totality of the 57 acres, first and foremost for the benefit of the industry and various segments of the industry."

The need for office, residential and retail is still there, but the World Market Center expects those needs to be met by the adjacent 61 acres owned by Las Vegas.

The Related Cos., a partner and co-developer of the World Market Center, has been selected by Las Vegas to be the proposed developer for the land, which the city has been working to develop for years.

Related, a real estate company headquartered in New York, is well known in the industry for its mixed-use developments such as CityPlace, a 72-acre urban area in West Palm Beach, Fla., and the $1.7 billion Time Warner Center in Manhattan.

"We are excited about the opportunities on the 61 acres, and we think it is very synergistic with our project," Samson said.

In fact, the convention center originally slated for the 57-acre World Market Center site could now end up on the 61 acres, Pretner said.

Nearby developers already are seeing a trickle-down effect.

Mark Fine, president of Mark Fine & Associates, had previously announced plans for a 100,000-square-foot building offering retail, restaurant and office space on 4.5 acres at the southwest corner of Bonneville and Grand Central.

But since Fine's announcement last year, he said he has received so many phone calls from office and furniture users looking for space, he is re-evaluating the plans.

"We can only do so much on five acres, but we have the architect looking at different alternatives," Fine said.

Fine said the site will still have office, residential and retail space, but will be much more dense than originally planned.

City officials said the World Market Center is creating a need for corporate housing in downtown Las Vegas and is helping to drive the recent interest in high-rise condominium development.

Developers of the planned condo tower Sky Las Vegas took a full-page ad in Furniture Market Today, an industry magazine that was distributed during the High Point market in October.

Bea Goodwin, Sky Las Vegas director of marketing, said one of the project's principals, David Pourbaba, is a furniture manufacturer who has a showroom in High Point and has plans for a showroom at the World Market Center.

"He knows these people and has a great relationship with them. It's a natural," Goodwin said. "There are already several people who have leased space at the market who have purchased a unit at our property."

She said the close proximity of the proposed 45-story Sky Las Vegas, on Las Vegas Boulevard south of Sahara Avenue, to the World Market Center makes it a natural for buyers and exhibitors.

City officials also expect that the World Market Center will act as a driver for new companies to locate to Las Vegas.

"I think that the next step to come is manufacturing, once companies see what Las Vegas has to offer," Goodman said. "It's a natural to make this a home in order to manufacture. It will create a synergy that will just change the way the nongaming industry will do business."

The city already has begun discussions with manufacturing companies, said Doug Lein, economic development manager of the Office of Business Development.

He said he has talked with a furniture manufacturer, which he declined to name, that would need up to 300,000 square feet of space and would create more than 350 jobs.

"There's a new industry out there that is being born," Lein said.

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