Mayor: Mall drawing interest
Las Vegas leaders are negotiating an exit for owners of a government subsidized shopping mall at Fremont Street and Las Vegas Boulevard.
Whether they’ll find anyone willing and able to buy the struggling Neonopolis mall and then close a deal remains to be seen.
But Las Vegas Mayor Oscar Goodman, whose frustration with the current owners prompted him to openly seek buyers for the property, said Neonopolis is attracting interest this week during the International Council of Shopping Center conference at the Las Vegas Convention Center.
In the meantime, current owners Wirrulla Hayward LLC, represented by developer Rohit Joshi, are using the conference to troll for tenants to make the mostly vacant Neonopolis more valuable.
"We’ve made it known to everybody … that we are interested in getting parties involved in Neonopolis," Goodman said.
He said city officials have spoken with two potential buyers and urged them to contact Joshi with offers. Joshi said he’s spoken with at least one of the potential buyers who met with the city, although both sides declined to identify the interested party.
"We are also talking to buyers who say they would like to buy it," Joshi said.
The mall is at the corner of Las Vegas Boulevard and Fremont Street, one of the most prominent intersections in Las Vegas. When Neonopolis is quiet, it creates an area devoid of foot traffic between the Fremont Street Experience pedestrian area and the nascent Fremont East district, an area of hipster bars and live music venues the city hopes will attract more locals downtown.
In addition to a desire to have a bustling link between the Fremont Street Experience and Fremont East, the city has a direct financial stake in Neonopolis.
It owns the underground parking garage beneath Neonopolis as well as an $18 million note on the property payable if the mall hits certain revenue targets.
The city also subsidizes parking in the garage. On May 2, the City Council extended for 30 days an agreement that allows Joshi to buy parking for $1 an hour, half the market rate, which he passes along to customers who visit the mall.
John Knott, executive vice president for CB Richard Ellis Global Gaming Group, who helped Wirrulla purchase the mall last year for $25 million, said he doesn’t think the value of Neonopolis has increased much since the sale.
One reason is because there are few tenants. Another reason is because the property includes the building, not the city-owned parking lot underneath.
"It is not a land value. You are buying the structure," Knott said.
But given the heavy foot traffic in the area around the mall it is only a matter of time before business picks up, Knott said. He said a buyer with enough money to carry the property until it takes off would have a chance to succeed.
"Eventually the property is going to really start to perform," Knott said. "The key is what you do in the meantime."
