Michael Tseng – Emphasis On Athletics Gives Las Vegas A Sporting Chance
Shopping Center Business
May 8, 2019
The city known for entertainment has been given a boost, thanks to its infusion of professional sports.
Las Vegas is known for many things. Being a 24/7 city. Reveling in excess. Providing a good time to tourists on any budget. And catering to said tourists’ every whim. You can find almost anything in Vegas, which made this desert oasis the capital of experiential long before that was a retail buzzword. More than 42 million people visited Las Vegas in 2018, according to the Las Vegas Convention and Visitors Authority. Many of these weekend warriors, road trippers, conventioneers and others undoubtedly partook in what makes Vegas “Vegas” — the fact that you can’t find this type of atmosphere anywhere else.
This narrative only tells part of the story, however. The city that built its reputation on Sin has long ago repented, becoming a family friendly destination — a strategy that has extended to the Valley’s submarkets.
“We are seeing a shift toward more family friendly environments in Las Vegas and Henderson to compensate for the decreasing gambling population,” says Michael Tseng, associate principal at KTGY Architecture + Planning’s Retail and Mixed-Use Studio. “The entertainment and food industries in Las Vegas have become very competitive to Los Angeles and Hollywood. Now you see world-famous chefs and entertainers residing in Las Vegas. In addition to the Vegas Golden Knights, the Raiders and a professional baseball team will soon be relocating here to make Las Vegas a more family and entertainment-oriented community.”
SPORTS BETTING
Much of the Valley’s recent development wave can ironically be attributed to the one thing Las Vegas is lacking that most major metros enjoy: a professional sports presence. All that changed in 2017 when the Golden Knights, an NHL expansion team, took center ice at the newly built T-Mobile Arena, situated between the New York New York and Monte Carlo (now Park MGM) casino resorts. The Knights reached the Stanley Cup championship that year, something no one in Vegas, nor anywhere else, saw coming. While the 50-to-1 odds of this dark horse winning the Cup didn’t ultimately pay off (the Knights lost to the Washington Capitals), those who bet big on the team saw significant returns.
“The impact of sports in Las Vegas cannot be overstated; it’s huge,” says Andy Ciarrocchi, vice president of management and operations at Howard Hughes Corporation. “Sports are the great convener. They bring people and communities together in ways nothing else can. We’ve seen that with City National Arena. There are hundreds of people here every day to watch the Vegas Golden Knights practice, and the team has truly become hometown heroes.”
That’s good news for Howard Hughes. The corporation debuted Downtown Summerlin, a 400-acre mixed-use destination in northwest Las Vegas that includes more than 120 shops and restaurants, in 2014. It opened City National Arena in 2017 ahead of the Knight’s inaugural season. With the cup on the line and a new injection of energy into a city that previously lacked a direct identity, it was no surprise that traffic to Downtown Summerlin jumped 8 percent in 2018. Howard Hughes isn’t done capitalizing on this sports-centric momentum. In fact, the developer double downed, building a new Triple-A baseball stadium immediately adjacent to City National Arena that opened this past April. The stadium will be home to the minor league Las Vegas Aviators (previously the 51s), and will host a number of community, civic and sporting events, from high school tournaments to concerts and more.
“It will become a community resource for everyone in Southern Nevada, just as City National Arena is a popular destination for the entire Valley,” Ciarrocchi says. “We are confident this new stadium will do wonders for everyone involved. In major cities across America, sports facilities also serve as catalysts for economic development, and we expect the same here. Hockey and baseball, together, have put Downtown Summerlin on the map in ways nothing else could, and the level of vibrancy and excitement they create is palpable.”
Howard Hughes is growing its offerings to keep pace with the additional anticipated traffic. This means adding more than 40,000 square feet and more than a dozen new stores and restaurants in 2019. Among the new entries is True Food Kitchen, a staple in California but a new entry in Nevada.
The Knights and Aviators are just the beginning, however. The city also has the Las Vegas Aces, a WNBA team formerly known as the San Antonio Stars that has taken up residency at Mandalay Bay Events Arena, a multi-purpose entertainment complex inside the Mandalay Bay Resort and Casino. Up next is a big one. The Raiders are set to relocate to Las Vegas from Oakland, Calif., for the 2020 NFL season. They will occupy a $1.8 billion stadium that is being constructed on 62 acres west of Mandalay Bay and Interstate 15.
Jim Stuart, a partner at Matter Real Estate Group, which developed the open-air shopping center Town Square just south of the Strip and is developing the mixed-use community UnCommons between Henderson and Summerlin, believes sports will continue to be a game-changer for Las Vegas. Its effects felt Valley-wide.
“Las Vegas’ move into a major-league sports city adds a new dimension for local businesses and residents, as well as global tourism,” he says. “What has been most surprising is the galvanizing effect the NHL has had on the local community. The product being offered and the entertainment value it’s creating is turning Las Vegas into the sports capital of the world. This influx of new venues is providing more social gatherings and fueling a passion that serves as the foundation of many great communities.”
The NHL and NFL action may remain in and around the Strip corridor, but, like Summerlin, Henderson is priming itself for an influx of the true fans — the locals.
MIXING BUSINESS WITH PLEASURE
The city of Henderson sold the Raiders 55 acres off St. Rose Parkway near Henderson Executive Airport for $6 million in January 2018. Development along this corridor has spurred since then. The Raiders offices and practice complex might have only broken ground in mid-January, but the impending sports addition has penetrated all corners of this southeastern submarket. The immediate effects were felt when Costco laid down roots for its fifth Southern Nevada outpost just down the street. The 148,000-square-foot store opened this past October. Activity has only increased from there.
“The West Henderson area, just down the street from the Raiders practice facility, is growing,” Tseng says. “This development is driven by the move of the Raiders franchise and the opening of a Google data center.”
This development includes the Village, a 300,000-square-foot, mixed-use project from local player Stable Development. The location, on the westbound side of St. Rose Parkway, was chosen in large part due to the nearby amenities.
“This development is perfectly situated in the growing West Henderson area just down the street from the Raiders practice facility, existing retail and the Henderson Executive Airport,” notes Lance Bradford, Stable’s CEO. “We anticipate bringing unique and upscale dining and retail options to Henderson where there is a high demand for these services.”
While there’s room to grow, the Henderson West submarket may become a bit more crowded with the Block, Sauvage Real Estate’s 103-acre, mixed-use project being proposed near the M Resort. The development would feature a 250-room boutique hotel, 2,920 high-rise units, office space, a theater, several parks, and about 500,000 square feet of retail and entertainment space.
“The goal of this project is to have the look and feel of a community,” says Eric Rogosch, vice president of retail at Sun Commercial. “All these new projects speak volumes to the strength of the Southern Nevada retail market and the confidence investors and developers have in it. It’s great to watch the city continue to grow and evolve.”
The Block and the Village certainly provide evidence Vegas is a growing community, ready to capitalize on its new identity as a destination for not just entertainment, but sports as well. The question remains, however, whether the Valley, primarily known for its sprawling suburbs, will embrace the influx of mixed-use developments — and whether it’s ready to fully accept the live-work-play trend most metros adopted years ago.
“More multifamily construction is happening, and Las Vegas is beginning to move in this direction, but it is not currently a true live-work-play environment as it is still heavily suburban,” Tseng says. “We are, however, seeing Las Vegas embrace the live-work-play concept in newly approved developments.”
Ciarrocchi also believes this trend can take shape in the Valley, noting that this lifestyle is part of Howard Hughes’ ultimate vision for Downtown Summerlin.
“Downtown Summerlin is not just a retail destination,” he says. “It is a 400-acre urban center that is taking shape as a live-work-play destination. Downtown Summerlin plans to continue to evolve with the times and will remain a prime location in Las Vegas for patrons to shop, dine, live, work and be entertained.”
Angie Kory, associate vice president of leasing at Vestar, believes many developers are playing catch up now that sports have caught fire and the Great Recession is firmly in the Valley’s rearview mirror.
Her firm’s project, the District at Green Valley Ranch in Henderson, was ahead of the curve when it opened in two phases between 2004 and 2005. The District contains more than 70 shops and restaurants, 76,400 square feet of boutique office space, 88 condominiums, and green and event spaces.
“Las Vegas is behind,” she says. “There aren’t many mixed-use centers here like you see in other major markets, but the more Vegas develops, the clearer it becomes that this live-work-play community is what the locals want. The verticality you see in Las Vegas has primarily been on the Strip, but the suburbs have lacked the essential placemaking that other markets have embraced as part of the mixed-use trend. Our consumers want it, and we see that confirmed by the volumes of people flocking to our restaurants.”
As such, the District is still evolving its offerings. Local favorites SkinnyFATS and PKWY Tavern, known for its beer taps and numerous interactive games, replaced Lyfe Kitchen and Whist, respectively. The 2,500-square-foot Due & Proper bar adjacent to PKWY was recently replaced by a new concept, Irish pub Ritchie McNeely’s.
The appeal of Henderson’s evolving live-work-play concept is what attracted these brands to the District to begin with, Kory asserts.
“SkinnyFATS has wanted to be a part of the tenant mix here for a very long time because the location at the District at Green Valley Ranch gives SkinnyFATS direct access to the southeast trade area in Henderson, the office workers in Green Valley and, of course, fabulous exposure to the Green Valley Parkway. The same can be said for PKWY Tavern and Ritchie McNeely’s ‚— as well as just about any tenant at the District at Green Valley Ranch; these are the prime reasons a location here is so desirable.”
EXPERIENTIAL ENCORE
Though the Strip will likely remain the epicenter of experiential, experts believe that options on and off Las Vegas Boulevard will continue to thrive as the city develops its identity, infrastructure and amenities.
“With rideshare services and GPS accessibility, many tourists are going out into our communities to experience new local concepts,” says Penny Mendlovic, vice president at CBRE. “China and Korea Town in central Las Vegas are great examples of inner-city projects that are attracting tourists. In fact, new retail projects are going vertical as we speak. Visitors to this area are from all over the world. Gabi Café on Spring Mountain Road is another example of a project with a strong local clientele that also attracts visitors in significant volume every day.”
Circa, a new 777-room hotel being constructed on Fremont Street in Downtown Las Vegas, is also attempting to lure visitors to its area of the city. Developer brothers Derek and Greg Stevens are not only tackling the first ground-up resort development in the area since 1980, but they’re making sure it attracts the masses. The 1.2-million-square-foot property will feature the longest outdoor bar on the Fremont Street Experience, five restaurants and a two-level casino connected via pedestrian bridge to a 1,201-space parking garage dubbed “Garage Mahal.” The resort, set to open in late 2020, will also feature a six-tier pool with views of a 125-foot high-resolution screen that will be used for pool events and, you guessed it, sports-watching parties.
“This parking garage was designed specifically with the convenience of ride-hailing drivers and their customer pickups and drop-offs in mind,” Rogosch notes. “The Stevens brothers designed the pools and party concepts using what they learned from holding events at the Downtown Las Vegas Events Center, which they also own. These new amenities are unique anywhere in Las Vegas, including the Strip.”
Then you have perhaps the most provocative project in Las Vegas — and that’s saying a lot. Billed as “an experience of entertainment reimagined,” AREA15 will feature up to 126,000 square feet of customized tenant space for a curated collection of experiential and retail businesses; the SPINE, a 30,000-square-foot curated artistic, interactive common area; and a 40,000-square-foot, indoor-outdoor event space that will host live music, festivals, corporate events, esports tournaments and more.
The project will be anchored by Meow Wolf, a multi-media production company based in Santa Fe, New Mexico, that touts Game of Thrones author George R.R. Martin as one of its investors. Meow Wolf creates immersive experiences through fabrication, painting, sculpture, architecture, virtual and augmented reality, sound, performative experiences and interactivity. Meow Wolf will collaborate with area artists and talent to create experiences in AREA15.
“AREA15 understands the current cultural shift into new dimensions of experience, whether that’s in telling a story, entertainment, dining or retail,” says Vince Kadlubek, Meow Wolf’s CEO. “Meow Wolf has envisioned an entirely new way of telling a story — more immersive, more interactive, more exploratory than anything before — and we are looking forward to producing an otherworldly experience for the vibrant local population of Las Vegas, as well as the year-round visitors from around the globe.”
AREA15 is a joint venture between real estate development firm Fisher Brothers and creative agency Beneville Studios. The first-of-its-kind experiential and interactive entertainment, retail, dining and nightlife complex is being constructed on the southwest corner of Sirius Avenue and Rancho Drive near Palace Station, about 15 minutes from the Strip. It is scheduled to open this December.
Winston Fisher, AREA15’s CEO, knew he had a tall order in front of him, given his proximity to so many other entertainment destinations. He also knew that the experiential aspect of entertainment was at a crossroads. One that essentially requires venues to rethink how entertainment impacts a guest nowadays.
“People are seeking different forms of entertainment that produce authentic connections, immersive experiences and real emotions, things traditional retail does not offer,” he says. “AREA15 sees an opportunity to fill this niche — especially with the local community. Weaving together events and entertainment, immersive experiences, curated retail, art installations, restaurants, bars, nightlife and 900-plus free parking spaces, AREA15 will be a unique proposition in a city that takes entertainment very seriously.”
Fisher views his space differently than most other offerings. To him, AREA15 supplies the space and opportunity, while allowing area creatives to showcase what they do best.
“With the Strip in our backyard, we knew we couldn’t compete, so how do you get people to come to a destination?” he asks. “Authenticity. The power of AREA15 is that we aren’t pretending. We are creating a platform – a content box — for bold visionaries to plug into. It’s not just entertainment, it’s not just retail. It’s for content and commerce to thrive, grow and evolve together. We believe AREA15 is the new business model: an immersive experience housing other immersive experiences. The success of AREA15 is predicated on creative partnerships and curating tenants that fit into our larger ecosystem, providing a community for emerging art and tech to engage.”
True to form, Las Vegas’ newest retail, restaurant and entertainment projects offer something for everyone, including tourists and locals alike. These offerings are made all the more enticing and diverse thanks to the sports components that have given this city something to believe in. Las Vegas may be far removed from the glamorous era of the Rat Pack, but that doesn’t mean its best days are behind it. Quite the opposite, in fact.
“The live-work-play mentality remains a vital component to the continued growth and success in our city,” Mendlovic notes. “Gaming and non-gaming amenities along the Strip corridor and throughout the Valley are important drivers for retail, shopping and dining. There is no question that the continued growth in the Southern Nevada community with the influx of new residents, professional sports, new entertainment venues and ongoing commercial development have added to our robust economy.”
As Frank Sinatra once crooned, “The best is yet to come.”
