Potential buyer says no thanks to Neonopolis deal

Saturday, April 14, 2007 | 7:29 a.m.

General Growth Properties, the Chicago-based retail giant that recently met with Las Vegas officials about purchasing Neonopolis, has decided not to get involved with the troubled downtown retail complex.

Jim Graham, public affairs director of General Growth, said in a statement that company officials Friday "told the city of Las Vegas that we have decided not to pursue the opportunity at Neonopolis that was presented to us."

"We have to choose new ventures very carefully, and for a variety of reasons this opportunity was not a good fit for us at this time," the statement said.

The company's decision is a setback for city officials who had hoped new ownership might invigorate the 250,000-square-foot, $100 million retail center that since opening in May 2002 has had trouble attracting and retaining tenants.

Prudential Real Estate Holdings spent almost two years trying to unload the structure before Delaware-based Wirrulla Hayward LLC paid $25 million for it last year.

City officials had hoped the purchase would breathe life into the complex at Las Vegas Boulevard and Fremont Street .

Currently there are only three anchor tenants - Jillian's restaurant, Galaxy Theatres and the custom-built Poker Dome, which televises poker tournaments - and one retailer, Del Prado Jewelers.

The city has expressed growing disappointment with plans offered by Rohit Joshi, the developer Wirrulla put in charge of the project. At a City Council meeting last month, Las Vegas Mayor Oscar Goodman referred to Joshi's presentation as "gobbledygook."

Goodman said Friday he was disappointed with General Growth's decision. "This would have been a major addition to our redevelopment efforts."

As first reported in the Sun, Benson Flanzbaum, a local developer, arranged a private meeting last month between Lyneir Richardson, General Growth's vice president of urban land development, and representatives from the city's business development office.

At the meeting, Flanzbaum said , city officials expressed displeasure with the lack of progress at Neonopolis and revealed a strategy to put pressure on Wirrulla to sell.

The city owns the parking garage under Neonopolis and the structure's foundation, while Wirrulla owns the building itself. Under the city's parking validation deal with Wirrulla, customers at Neonopolis may park for free. Without the parking agreement, the struggling businesses at Neonopolis might not be able to survive.

General Growth has invested heavily in Las Vegas. Its projects in the valley include the Fashion Show mall, the Grand Canal Shoppes at the Venetian and retail and housing developments in Summerlin. It is the nation's second-largest real estate investment trust, with interests in more than 200 shopping malls in 44 states.

Michael Matkins, an attorney for Wirrulla, said he, too, was disappointed that General Growth has pulled out of negotiations.

"I don't think we have ever been trying to sell, but I think we thought the fix was easier than it has turned out to be," Matkins said. "I think General Growth, in the last week and a half, has found that out as well."

That appears to leave the immediate future of Neonopolis in the hands of Joshi and Wirrulla.

"We aren't in the driver's seat . I wish we were," Goodman said. "The city doesn't do the pursuing. We tell people Neonopolis is an albatross around our neck. It's a blight on the downtown, as far as I'm concerned, but it has tremendous potential."

General Growth, however, apparently did not agree.