Crystals reveals more of its facets
Fri, Jul 10, 2009 (3 a.m.)
MGM Mirage has lured an impressive array of the world’s top luxury retailers for Crystals, the retail component of its $8.5 billion CityCenter, the company announced this week.
Despite the recession that prompted resort and retail project cancellations across the valley and the nation, Crystals is on track to open Dec. 3 with an all-luxury lineup, two weeks before the scheduled opening of Aria, CityCenter’s central casino resort.
But the sour economy made it more difficult to hammer out the deals lining up the retailers. Negotiations took longer, and MGM Mirage assumed more of the risk for many of the leases, said Frank Visconti, CityCenter’s retail president.
“The deals had to change,” he said.
Instead of standard high-end retail leases based on a negotiated cost per square foot with additional payments made on a percentage basis after sales exceed a specified threshold, many Crystals leases were made on a percentage basis only. The deals reduce risk for skittish retailers and provide significant upside for MGM Mirage if Crystals is as successful as he believes it will be, Visconti said.
MGM Mirage took a step back when the economy turned south to consider whether it made sense to continue building the retail component as it was originally planned.
“We did pause and we thought it through and wondered if we were all nuts,” Visconti said. “But you can’t be half pregnant, so we decided to make it the most special, 100 percent luxury.”
Retailers announced this week include Prada, Christian Dior, Bulgari, Carolina Herrera, Hermes, Roberto Cavalli, Cartier, Van Cleef & Arpels and Versace. They will join previously announced Louis Vuitton, Tiffany & Co. and Ermenegildo Zegna stores.
Retailers opening their first Las Vegas stores at Crystals include Tom Ford, Assouline, Kiton, Miu Miu, Paul Smith and Porsche Design. They will be joining previously announced unique-to-the-market stores such as H. Stern, de Grisogono, Marni, Boutique Tourbillon and Mikimoto.
Other retailers include Bally, Emilio Pucci and Ilori, and glass sculptor Dale Chihuly will have a gallery.
Restaurants will include Eva Longoria Parker’s Beso, Mastro’s Ocean Club Seafood House, a new pub concept by Todd English and two Wolfgang Puck offerings.
Taubman Co. is handling Crystals leasing for MGM Mirage, which will operate CityCenter for its joint-venture co-owner, Infinity World Development, a subsidiary of Dubai World.
Many of the stores will be much bigger than sister outlets in other cities, two or three times bigger than New York or Rodeo Drive locations, Visconti said.
The size of the stores will allow retailers to carry more of their inventory and will make Crystals a must-visit shopping destination, he predicted.
“We asked them to open not just a store, but a flagship store,” Visconti said. “I want Los Angelenos to think that they have to come here, to give people another reason to make CityCenter and Las Vegas their destination.”
MGM Mirage is not disclosing the terms of its lease deals nor is it releasing the percentage of the 500,000-square-foot Crystals that is leased.
Visconti said the dramatic architecture, both exterior and interior, was the biggest reason luxury retailers wanted space in Crystals.
Architect Daniel Libeskind designed the building with its jarring angles and abundant glass, while New York’s Rockwell Group provided the interior architecture.
“The architecture, the space, was the key,” he said. “It enabled me to go to these folks and ask them to join us.”
The unique interior spaces didn’t scare off the prospective tenants.
“There isn’t a right angle in the place,” laughed Visconti, who said that luxury retailers have a design aesthetic that was captivated by Crystals’ space.
Las Vegas economic analyst Jeremy Aguero said he expects Crystals’ location directly on Las Vegas Boulevard to be a significant edge as it competes with the Fashion Show mall and Forum Shops at Caesars and retail offerings at Bellagio, Wynn, Encore, Venetian and Palazzo.
“It’s a huge advantage to be out in front of some of the densest foot traffic in the United States,” said Aguero of Applied Analysis.
He sees Crystals as a threat to dominate the luxury retail market on the Strip, much like CityCenter as a whole is a threat at the top end of the resort competition.
“CityCenter and Crystals are each designed to be a category killer,” Aguero said. “They are threats to luxury competitors, on the hotel side and on the retail side. There is only so far you can stretch that (top) end of the market, and each are big enough that I expect them to have a gravity effect in the near term, attracting business that would otherwise go to other luxury competitors.”
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