DESERT STORM
Jul 1, 2004 12:00 PM, Renée DeGross
The retail stepchild of the Las Vegas strip is due for a makeover, but is it too late to save Desert Passage? Neighboring rivals Fashion Show Mall and Forum Shops at Caesars are expanding and have unveiled fresh tenant rosters. Now, Desert Passage's new owner, Boulevard Invest LLC, is planning more than a few nips and tucks at the property, which is adjacent to the Aladdin Resort & Casino.
Boulevard Invest was established last December when RFR Holding LLC, Tristar Capital and Investcorp acquired Desert Passage from Trizec Properties for $240.5 million. Trizec, which is now totally out of retail development, modeled the 450,000-square-foot Desert Passage after a Middle Eastern bazaar when it opened four years ago. But it never took off.
The planned overhaul will include a new name and Strip-front façade. Boulevard will also revamp the layout inside into retail zones, and add drama to the exterior. The company lined up Urban Retail Properties to manage the property and leasing adviser Robert K. Futterman & Associates to oversee repositioning, renaming and re-merchandising. “With 36 million visitors annually, we think we can achieve our goals,” says Russ Joyner, Urban Retail Properties' vice president and general manager of Desert Passage. “We'll take advantage of what's already at our doors.”
Among the re-merchandising changes, Joyner says the interior will be transformed into eight zones. Zone One, for example, will feature trendy retailers, while Zone Eight will be for dining, drinks or just people-watching. Planet Hollywood is one of the tenants Aladdin hopes to attract for this area. Desert Passage will stay open during the makeover, which is scheduled for a fall 2005 completion.
The property has been plagued by turnover since its opening, though it rang up a respectable $603 per square foot from its 140 stores in 2003. But that's still less than its more productive counterparts, including the Forum Shops, which is opening a new wing this fall. Forum Shops sold $1,400 per square foot in 2003, according to owner Simon Property Group.
“We are a beneficiary of timing,” says Michael McCarty, Simon's senior vice president of research and communications. “Caesars was already established as a dominant casino so we had immediate name recognition being next door. Aladdin didn't have that identity when they opened across the street.”
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