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October 30, 2014

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redevelopment:

Plans limp along for mall meant to spur NLV renewal

City, developer still negotiating amid drought in financing

Image

STEVE MARCUS / LAS VEGAS SUN file

The Strip skyline is the backdrop for the area of North Las Vegas where a $100-million retail mall has been in planning for two years.

Map of Silver Nugget Casino

Silver Nugget Casino

2140 Las Vegas Blvd., Las Vegas

For nearly a decade, North Las Vegas has been pursuing ambitious plans to give its aging downtown a makeover.

To help execute the effort, the city’s Redevelopment Agency began plotting ways to draw fresh businesses and new excitement to the beleaguered 2-mile stretch of Las Vegas Boulevard North.

What would really help trigger interest in the area, city officials concluded, would be a large shopping center — nearly a half-million square feet of shops and eateries, the kind of place that would draw traffic downtown, create jobs and generate tax revenue.

Last year, to further boost the effort, the City Council decided to build a nine-story, $165 million City Hall in the redevelopment area, too.

The center has taken on even more importance after the Silver Nugget decided to hold off plans to upgrade its property, leaving the weight of downtown’s future on the shoulders of the new retail mall. In 2007 a Southern California development company promised to build just what the city needed. It would be called Las Flores, a two-story, $100 million shopping mall that would, because of its mix of tenants, be especially attractive to North Las Vegas’ Latino community.

But in the roughly three years since Las Flores was conceived, its construction seems no more of a sure thing today than it was when it was first pitched — and it may be in jeopardy because of tightfisted lenders.

City officials still hold great hopes for it.

The City Council last year approved preliminary plans for the center that showed architectural renderings and sketches of how the complex would be laid out. There was so much excitement, the meeting was covered on the evening news.

And this month, the City Council, sitting as the city’s Redevelopment Board, adopted a 300-page redevelopment strategy that envisions downtown workers — including City Hall and courthouse employees — walking across the street for lunch at Las Flores, and shoppers from throughout the Las Vegas Valley visiting the mall.

But an agreement that would lay out the owner’s and city’s responsibilities, called a participation agreement, has not been finalized.

Mike Majewski, the city economic development director, says the agreement should be finalized — fingers crossed — in 60 days.

The agreement will settle who pays for public improvements, including roadwork, sewer and water line improvements and traffic lights at the center’s entrances.

If the two sides can’t come to terms, the project could be scrapped. The only thing tying Las Flores to North Las Vegas is that its developer owns the 32-acre parcel.

Majewski said the parties are still negotiating the project’s time line, the city’s participation in the development, and, perhaps most important, the financing of the $100 million project. He says progress is being made during weekly discussions.

Other’s aren’t so sure.

“With the market, there’s a chance it just won’t happen,” said Councilman Robert Eliason. “That’s certainly possible.”

Jose de Jesus Legaspi, owner of the Legaspi Co., the Southern California-based development group that has been touting the project for more than two years, did not return calls. His company has developed shopping centers in California and Arizona.

Dallas-based Sarofim Realty Advisors had also been involved in negotiating the development agreement. Representatives of that company also did not return calls. Neither did Michael Pederson, the senior project manager of Montecito Commercial LLC, a local development and building company working on the project.

Majewski said the city has yet to see a study of the full economic impact and jobs to be created by the center. That information would be part of the developer’s proposal.

The city says the project would create more than 700 full-time jobs.

Legaspi previously hasn’t been shy about promoting his big plans in North Las Vegas.

In May 2007, at an International Council of Shopping Centers conference, Legaspi said the 32-acre shopping center would be anchored by La Curacao, a Spanish-language store similar to Best Buy that uses the slogan “A little bit of your country.”

City officials attended last year’s conference to promote the shopping mall plans and build interest among big-box stores and small merchants to become tenants.

Majewski said at the time that two major tenants were lined up, but both sides have kept the names under wraps.

Sources identified the second anchor store as Burlington Coat Factory.

Many in the development community are curious about what kinds of merchants would fill the mall.

Part of Las Flores’ strategy is to have 120,000 square feet of “entrepreneurial shops” for local merchants to rent small spaces, which in some people’s minds sounds akin to an indoor flea market.

Majewski said the small shops could be regulated through business licensing and that the city would likely ban the sale of secondhand goods.

The city says small retail spaces would serve as incubators to help nurture small businesses into becoming tenants of full-size storefronts.

While the participation agreement is hammered out, the city is determining what infrastructure upgrades are needed to support a project the size of Las Flores in the 50-year-old neighborhood.

The city’s long-term capital improvement plan calls for spending $5 million on utility upgrades of Las Vegas Boulevard.

Eliason has questioned whether that investment is intended to benefit primarily Las Flores, at the expense of others. He also questioned whether the city would be able to get a bond to support the improvement plan wish list during this economic climate.

City Manager Gregory Rose said the upgrades along the street, including fiber optic cables and improved drainage, would provide the groundwork for future development.

But for now only Las Flores is on the radar screen, and that blip may be growing weaker.

Plans from 2007 called for the center to open in the first quarter of 2009.

The recession, if nothing else, has derailed that expectation.

“I’d be silly to say there’s no danger,” Majewski said. “I don’t have a crystal ball.”

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