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A Diamond in the Rough

LAS VEGAS-Located along The Strip, the 475,000-sf Desert Passage mall has been mostly deserted with limited passage for pedestrian traffic. Coined "the poor child of the three big malls," Desert Passage has historically underperformed when compared to the Forum Shops at Caesars and Grand Canal Shoppes at the Venetian. Like its Arabian-themed décor, the mall has a rich history of uphill battles and dramatic controversy. Today, new owners are reworking the mall in hopes of creating Las Vegas's next retail jewel.

By Dana Dubriwny | Updated on May 11, 2005

LAS VEGAS-Like its original theme, the 475,000-sf Desert Passage mall is embedded with a rich history of theatrical tales. As the story goes, Chicago-based Trizec Properties spent nearly $300 million to build the Arabian-themed retail center, which opened adjacent to the Aladdin Hotel and Casino in August 2000. But the events of Sept. 11 flattened Aladdin’s financial holdings and soured Trizec’s interest in the Las Vegas property.

After several slashed prices and a mild bidding war in 2003, the property was purchased by New York-based developer David Edelstein’s TriStar Capital (formerly Sutton East Corp.), with business partner and real estate firm RFR Holding. Collectively, the group is known as Boulevard Invest LLC. Within months of the retail buy, the Aladdin Hotel and Casino declared bankruptcy and relinquished its assets for $635 million to a new owner, Planet Hollywood.

Edelstein says the mall came with much more than 95,000 sf of vacant space. For $204.5 million, Boulevard purchased a stained reputation, poor space configurations and several disgruntled tenants. “It had the reputation of being the poor child of the three big malls,” Edelstein says.

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