Tuesday, September 25, 2012

25-store expansion planned for downtown outlet mall

By Eli Segall- Vegas Inc

The cab line on a recent afternoon at the Las Vegas Premium Outlets downtown snaked but moved quickly as tourists carrying bags of merchandise piled into cars. Hundreds of shoppers roamed the open-air center, shuttling from one store to the next, looking for bargains.

The popularity of the discount mall, and its sister property a few miles south of the Strip, has skyrocketed in recent years. Cab driver Michelle Garcia said she shuttles more people there now than in 2005 when the economy was roaring.

“People are shopping more than they’re gambling,” Garcia said from her car while waiting for passengers.

Mall owners are looking to capitalize on that popularity by expanding the downtown outlet for a second time.

Simon Property Group plans to add about 25 stores, comprising at least 150,000 square feet, to the 150-store mall. It also plans to add four levels to one of the parking garages, increasing parking by as many as 685 spaces.

Indianapolis-based Simon expects to finish the project in 2015, said Alexandra Goranson, marketing director for Premium Outlets. She declined to provide construction costs and did not say when work would begin.

On South Grand Central Parkway near the Spaghetti Bowl, the mall, formally known as Las Vegas Premium Outlets-North, is fully leased and typically packed with tourists. It underwent its first expansion in 2008, about five years after opening.

One new tenant planning to move into the new expanded space is Saks Fifth Avenue Off 5th, which is no stranger to the local discount shopping scene. The New York-based retailer has an Off 5th store at Las Vegas Premium Outlets-South on Las Vegas Boulevard South at East Warm Springs Road. That mall also is fully leased.

Saks’ market research shows that the valley’s customer base and tourist traffic are strong enough to sustain two Off 5th stores, vice president of marketing Amber Cacali said. She said the downtown mall is one of the country’s best performing outlet centers.

At Wilsons Leather, sales are up 30 percent year-over-year, store manager Bree Mitchell said. Three-quarters of customers are tourists, many of whom live in cold climates and flock to Wilsons for low-priced jackets.
“In the next couple of weeks, it’s going to be slammed all the time,” Mitchell said.
Tanja Rajic, a graphic designer from Germany, was one of the foreign tourists buying clothes at the mall earlier this month. She said she learned about the outlet from a travel guide and while surfing the Internet in Germany.

Rajic came to Las Vegas to shop and sightsee, not to gamble, she said. She wants to visit again.
“It’s beautiful,” she said.

Simon, which owns or partially owns 332 retail properties, describes itself as the world's largest real estate company. Nevertheless, when it bought land for the mall expansion, it showed that even the largest of corporations can miscalculate deals.

Las Vegas developers Mark and Jeff Fine sold the expansion site to Simon for $16 million in May — almost a decade after they bought it from Simon and its development partner Chelsea Property Group for $4.9 million.

The Fines had planned to build 100,000 square feet of retail, restaurant and office space on the lot, but the project never materialized. So they sold the land back to its previous owner for a tidy profit.

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