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Shopping Centers Today -> September 2003
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SIN CITY OUTLETS
Chelsea, Simon open latest joint venture near Las Vegas Strip
BY JILL MAUNDER
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Not all the action in Las Vegas, whether gambling or retail development, takes place on the famous Strip, as Chelsea Property Group and Simon Property Group would be the first to point out. Last month the companies jointly opened, in a 50-50 partnership, the $80 million Las Vegas Premium Outlets in the city’s downtown.
The 126-store, open-air center, which sits mere blocks from historic downtown casinos and only minutes from the Strip, opened Aug. 1. The upscale project brings to the fast-growing, tourist-packed metro area Chelsea’s trademarked Premium Outlets brand, which is positioned to appeal to what the developer calls “discriminating” shoppers.
“We’re going to cross-promote downtown and the Strip,” said Dottie Montana, the center’s general manager, who notes that the center caters to area visitors and residents alike.
Chelsea executives have long savored the prospect of opening in the lucrative Vegas market.
“We came to the conclusion that we could replicate the success of our Orlando [Fla.] project in Las Vegas,” said Tom Davis, president of Chelsea’s domestic outlet business, referring to Premium Outlets, also a joint venture with Indianapolis-based Simon (Simon sold its 50 percent stake of that project to Chelsea last year.) “Outlets already existed in both markets, but those centers didn’t address the international visitor or the more affluent, local customer the way we do.”
And Las Vegas will not be the last joint venture between the two companies. They are now building the Chicago Premium Outlets in Aurora, Ill., which is expected to be completed in the summer of 2004.
Las Vegas Premium Outlets “is being marketed as a shopping destination for area and regional residents and a year-round attraction for area visitors, including motor coach tours, conventions and international visitors,” said Michele Rothstein, Chelsea’s vice president of marketing. “Our key goal is to clearly differentiate our center in the marketplace to consumers and tour and travel professionals.”
Retail brands represented there include A/X Armani Exchange, Coach, Dolce & Gabbana, Elie Tahari, Nike and St. John.
Besides attracting international visitors, Chelsea is also advertising and promoting the center in the metro market and at its centers in Southern California, “where residents are a large percentage of the Las Vegas visitor base,” said Rothstein. Las Vegas Premium Outlets has been included on Chelsea’s consumer Web site since mid-March, and groups can book tours online.
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Chelsea has also established late-night operating times in the town that never sleeps, closing at 10 p.m. weeknights, 9 p.m. Sundays, to attract late shoppers and also to beat the heat. “This is something we also did in Orlando,” Rothstein said.
In the summer of 2000, the company began seeking a site that was 10 minutes by taxi from the Strip’s casinos and hotels and near Interstate 15 to serve the local market, Davis says. By late 2000 Chelsea was contacting key tenants.
The racetrack-designed center includes some unusual measures on Chelsea’s part to tailor the project to the character and habits of Las Vegas. Designers made the center especially accessible to taxis, for instance, to take advantage of the 127,000 hotel rooms in the area.
“This center will be heavily visited by people who are dropped off by taxis,” said Rothstein. “We expect people to pop into a cab and pop into our center.”
Montana even held a “get acquainted” day for taxicab drivers before the center opened to familiarize them with its two drop-off areas. The front entrance is near a city bus lane; the drop-off area at the rear of the center is part of a porte cochere created for motor coaches and shuttle buses as well as taxis and limousines. A glassed-in information center is also positioned there, alongside management offices.
The city bus system is adding a $1-a-ride shoppers’ express to run between the center and the downtown every 15 minutes. Furthermore, Chelsea figures the center will be a favorite lunchtime spot for city employees, many of whom work in the nearby Clark County Government Center. Diners can choose between the glass-walled, air-conditioned food court and the outdoor patio tables. Las Vegas Premium Outlets will also have two spacious restaurants separate from the food court.
The new project is just three miles from The Rouse Co.’s newly expanded Fashion Show Mall, which is home to the full-price retail counterparts of many of Chelsea’s outlets. The shoppers Chelsea courts for the Premium Outlets brand are of the same demographic and income levels as those targeted by Fashion Show tenants, including Bloomingdale’s Home, Neiman Marcus, Nordstrom and Saks Fifth Avenue.
Rothstein discounts the significance of this proximity. “Both Orlando and Las Vegas have had existing outlet centers [Belz Enterprises] that are as close to the full-price stores in each market as Chelsea’s incoming projects,” she said.
Similarly, Simon spokesman Les Morris said the Forum Shops and outlet center aren’t likely to compete. “They meet different customer needs.”
Chelsea’s site is eight miles north of the 635,000-square-foot Belz Factory Outlet World in Las Vegas (which it bought last month for $104 million) and 35 miles north of the 400,000-square-foot Fashion Outlets Las Vegas, a designer-oriented mall on the Nevada-California state line at Primm.
Montana says she is optimistic about how her new center will fare. “Once they shop here, this is the only place they’ll shop.”
Chelsea, which operates 26 Premium Outlets centers in the United States and three in Japan (plus 28 moderate outlet centers and three conventional strips), designed the Las Vegas project in the Southwestern style with a color palette of vivid, desert hues. Its 16 pueblo-like buildings, some with rectangular pop-outs as overhangs, are topped dramatically by eight white fabric-covered pinnacles that soar up to 64 feet, shielding shoppers from the full effects of temperatures that often hit 110 degrees or more in summer.
“During certain times of the day, this building shades this area, and the [pinnacle] shades another area, so you’re not in the sun for long,” Montana said. The center installed 50 misters among as many palm trees to cool the hot, dry air. The 12-foot-tall devices, with a 20-foot spray radius, are placed in the six outside courts that separate the center’s buildings.
The project designer was Adams Hennon Architecture, Mooreville, N.C., the architect of Chelsea’s Orlando Premium Outlets. The work has many parallels with that center, not least its tourist-rich location.
Chelsea says Las Vegas Premium Outlets is creating at least 800 jobs (in addition to the 300 construction jobs of recent years) and will generate $11 million in sales taxes and $600,000 in property taxes annually. The developers expect the stores to generate more than $150 million in retail sales annually.
With the opening of Las Vegas Premium Outlets, Chelsea will be operating in 31 states and Japan. The developer’s leading properties include Woodbury Common Premium Outlets, near New York City; Orlando (Fla.) Premium Outlets; Wrentham Village Premium Outlets, near Boston; Desert Hills Premium Outlets, near Palm Springs, Calif.; and Rinku Premium Outlets, near Osaka, Japan.
This article originally appeared in Value Retail News.
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