ICSC DISPATCH: New Owners Set to Reposition Desert Passage

LAS VEGAS—With a new owner at the helm, plans are in the works to revamp the Shops at Desert Passage, the 475,000-sf retail/entertainment complex that adjoins the Aladdin Hotel here. While specific details of the repositioning/renovation program remain under wraps, members of the project team tell Globe St.com that the property will emerge with a completely different look and a new concept when the effort is completed in October 2005. “We are reinventing the center by adding a new facade, new retailers as well as doing a complete renovation,” said Wendy Albert, director of marketing for Urban Retail Properties Co., which is overseeing the management and leasing effort, at the ICSC Spring Conference here. Boulevard Invest, comprising RFR Holding principals Aby Rosen and Michael Fuchs and David Edelstein of TriStar Capital, purchased the property from Trizec Properties in December 2003 for $204.5 million. Though Desert Passage achieves an average sales per sf figure north of $600, which says Albert, is 50% above the national average, it still pales in comparison to the strip’s leading retail venues, namely the Forum Shops at Caesars and the Shops at the Venetian, which garner sales per sf in the neighborhood of $1,000 per sf. “We believe that $600 in this market can be doubled,” says Russell A. Joyner, Urban vice president and general manager of Desert Passage. According to Albert and Joyner, a concept for the property has been decided, but is not being revealed to the public at this time. It will, however, be geared toward “younger, hipper retailers” in the mid-price level. Part of the problem with the property in the past, says Joyner, is that the Aladdin hotel and Shops at Desert Passage went after different types of customers. The new theme for Desert Passage will be cohesive with the new concept of the hotel, which was acquired by a joint venture of Starwood Hotels & Resorts and Robert Earl, Planet Hollywood CEO, last summer, but it will also be able to stand on its own. Albert & Joyner add that the repositioning effort will also involve new lighting and new signage, two major criticisms of the existing property. It will also focus on adding more restaurants and entertainment venues. Overall plans for the project are expected to be announced within next six months, they say. The Desert Passage is currently 82-85% leased and Robert K. Futterman & Associates is the leasing consultant.