Tivoli Village bucks trend with cash

By Buck Wargo

Friday, Dec. 10, 2010 | 3 a.m.

Las Vegas is about to get an ambitious and highly anticipated development that combines some of the best elements of Lake Las Vegas, the District in Green Valley and Town Square.

Tivoli Village at Queensbridge, the 23-acre mixed-use complex, is expected to be a focal point of the Summerlin area, where analysts say there aren’t enough shops and restaurants to serve the upscale development.

Until now.

Tivoli is an aberration in a market where construction has been at a virtual standstill for the past two years.

The developers of the luxury condominium tower One Queensridge Place, Las Vegas-based EHB Cos. and Israel’s IBD Development Corp. have shown their deep pockets and confidence in pursuing the $850 million retail, entertainment and office development whose fall 2009 opening was delayed by the recession.

Tivoli is on track to open 225,000 square feet of retail space and restaurants and 145,000 square feet of office space by the end of March as part of its first phase.

A second phase of 300,000 square feet of retail and entertainment uses, including a multiscreen movie theater complex, is scheduled to open by the end of 2012. That will be followed by a third phase of about 300,000 square feet of office and retail space, and as the market dictates, 342 condominium units in three buildings during a fourth phase.

Tivoli beats the half-built Summerlin Centre to the punch after the recession halted its construction in 2008, suspending 1 million square feet of retail, office and condominiums in an urban village atmosphere.

Tivoli’s developers attribute their ability to move forward to using cash and not relying on financing.

“I think since they had the cash, they got the jump on everyone else when all of the funding dried up,” said retail market analyst John Restrepo, principal of Restrepo Consulting Group. “If you have no debt service, that makes things pencil out that other projects can’t do. They’ll have a good foothold in the Summerlin area, which will delay, if it’s ever done, Summerlin Centre.”

Tivoli said it has more than 50 percent of its office and retail leased in the first phase, and it should be completely full by the time the second phase opens in 2012. The second phase is expected to open about 75 percent leased.

In the first phase, it has already inked Merrill Lynch and a law firm as office tenants and several boutique retailers, including some national chains such as Charming Charlie, a fashion accessory boutique.

Restrepo said Henderson has the Galleria at Sunset mall and the District, and Town Square serves the southern valley and the Strip, but Summerlin lacks a cluster of retail with restaurants and entertainment. The exception is Boca Park, south of Tivoli, but it caters more to shoppers of big-box retailers rather than Tivoli’s boutique stores of 2,000 to 4,000 square feet. Boca Park lacks entertainment venues, such as movie theaters.

“One of the things everyone recognizes if they live in the Summerlin area is a shortage of retail opportunities, especially clothing stores and food and beverage establishments.” Restrepo said. “They’re taking advantage of the shortage.”

That opportunity isn’t lost on Tivoli’s developers, who said that was part of their reasoning for moving full-speed ahead, especially after construction slowed for more than a year because of the recession. The plan was to open the center’s entire 785,000 square feet at once, but the developers opted to do it in phases to match the economy and still enable income to be generated.

“There are some people we’re talking to right now who feel by the time we open (the second phase by the end of 2012), the economy will be in such a place that they need to open stores. It’ll be good timing,” EHB President Frank Pankratz said.

Tivoli, which is not far from the Las Vegas Beltway or Summerlin Parkway, mirrors the European village look at Lake Las Vegas, the boutique stores of the District and urban village setting and destination point of Town Square. Tivoli officials are counting on it being a destination point where people hang out for hours at its farmers’ market, outdoor patio dining, park setting or entertainment venues.

“Everyone asks me all the time what it compares with,” said Tonia Chafetz, manager of specialty retail and marketing at Tivoli. “I don’t think Tivoli is like anything else in Las Vegas. It’s hard to believe that in a shopping mall here you have inlaid marble and new-concept boutiques and restaurants. It’s so meticulously thought out.”

When the main phases are complete, Tivoli will have 400,000 square feet of retail and entertainment venues, 125,000 square feet of food and beverage establishments and 260,000 square feet of office space.

Restrepo said the center will cannibalize Boca Park and other retail centers in the Summerlin area, but questions remain on how its luxury retailers will fare. Filling office space will be a problem, since that area has a 40 percent vacancy rate in high-end offices, he said.

“I think it will probably do OK at the beginning because the economy is so slow. But if they have the right tenant mix, it will hold its own over time,” Restrepo said. “If it does well, it will delay building by competitors for a while.”

Pankratz said many companies want to be in an environment where they can entertain clients and where their employees can go to lunch or coffee close to their offices.

Chafetz said despite the center’s look, there will be a mix of retail with plenty of opportunities for shoppers of all price ranges.

“A lot of Middle America will be shopping here,” Chafetz said. “This isn’t going to be like Palazzo or Crystals. You can shoot a canon through those places. We’re in a place right now where people don’t have that kind of money.”

The 29-acre site on a former wash is catty-corner to One Queensridge Place, the luxury high-rise towers that have sold 140 of 219 units.

In October, Tivoli’s developers double downed by acquiring 23 acres on Alta Drive, on the south end of Boca Park and across from their development. The parcel is expected to be a fourth retail phase. The development group paid $11.75 million for the property, taken over by City National Bank via foreclosure from Triple Five Development.

Plans are being developed for that site, which will be connected to Tivoli by a pedestrian bridge, Pankratz said.

EHB is fortunate to have IBD as its partner because of its ability to sustain a project like this in difficult economic times, Pankratz said. Once Tivoli opens, other retailers and businesses will be spurred to sign leases and want to be in the center as well, he added.

“We look at a lot of things and what we had invested and what was happening in the environment and with the economy and how long it would be this way,” Pankratz said. “But based on the investment we had, we wanted to get it open and produce revenue.

“We thought the market was ready for it. Everybody we talked to has been excited for the last several months of what we have been doing here. The consumer is ready for this. There’s phenomenal interest.”

In October, Tivoli’s developers double downed by acquiring 23 acres on Alta Drive, on the north end of Boca Park and across from their development. The parcel is expected to be a fourth retail phase. The development group paid $11.75 million for the property, taken over by City National Bank via foreclosure from Triple Five Development.