When it comes to mixed-used development, Las Vegas is still in its infancy, but that won't last for long.
Several projects that combine residential uses with retail and office elements are either under construction or moving forward. Town Square, a mixed-use project that combines retail and entertainment with office space, is expected to open by the end of the year south of the Strip near McCarran International Airport.
Since The District opened at Green Valley Ranch in April 2004, developers have been cautious about building mixed-use projects, while local governments have changed their zoning codes to facilitate them. They are complex and take longer to plan than single-use projects and are risky for those who don't have the experience to build them.
"So far we have only seen little baby steps," said Alex Edelstein, founder of Gemstone Development, whose $350 million ManhattanWest project calls for 700 condominiums on 20 acres, 50,000 square feet of shops and restaurants and 150,000 square feet of office space. "It is hard to do well. That's one of the reasons you hear a lot of talk but a small amount of projects that break ground. It is easier to make money on vanilla office, retail and condos, so there is not motivation to go out there and do this more complicated stuff."
As projects move forward like ManhattanWest and Sullivan Square, a 16.5-acre project in southwest Las Vegas that will feature 1,300 condo units and 25 shops and services normally found in neighborhoods of major urban centers, the concept is expected to grow in popularity. It will spawn similar projects for Las Vegas-based residents to live in low-rise and mid-rise condos especially as the supply of land dwindles.
Mixed-use development took center stage in Las Vegas this week during the annual International Council of Shopping Centers spring convention. The convention held two programs to highlight mixed-use development and help people understand its importance.
ICSC Chairman John Bucksbaum, chief executive officer of General Growth Properties, which owns more than 200 regional shopping malls, said attendance at this year's convention is up because of home builders and other developers who recognize the importance of including retail with their projects.
"Mixed use is here to stay," Bucksbaum said. "People have grown tired of a commute that has gone from 20 minutes to 30, to 45 and 60 minutes both ways. They are prioritizing what's important to them and seeking out a different lifestyle."
Lee Wagman, chief executive officer of the Martin Group, a Santa Monica, Calif.-based mixed-use developer, said the concept is the hottest trend around the country today even though it isn't new.
Major American cities have incorporated a mix of uses since their inception with little planning or regulation until the Supreme Court ruled in the 1920s that cities had the right to separate zoning uses. That decision along with the automobile's popularity after World War II spurred development on the edge of cities defined by separate uses.
"I believe we are witnessing a generation in which millions are redefining the American dream not as a four-bedroom home and backyard in the suburbs but a two-bedroom condo with a Whole Foods downstairs and a skyline view from their living room," Wagman said.
Edelstein said the nuclear family is making up a smaller percentage of home buyers. Many homeowners are frustrated by their social lives because it's harder to make new friends walking from their garage to their kitchen. When you live in a condo with amenities around it, that's possible, he said.
"The TV show 'Friends' is what buyers want. They want to spend more time with their friends and hang out like they do at the coffee shop," Edelstein said.
Kenneth Smith, president and managing partner of Glen, Smith & Glen Development, co-developer of Sullivan Square, said many mid-career professionals want to stop at a full-service deli at the foot of their door and pick up dinner for the night. Younger generations are willing to live in a 600-square-foot condo, one-third the space they could have in Coyote Springs.
Most of the interest is from newcomers who have lived elsewhere and like the concept, Smith said. Longtime residents scratch their heads and ask where the gates are when they see the plans, he said.
"Vegas has had a mentality, I think that is a little bit behind the curve," he said.
Smith said he believes somewhere between 10 percent to 20 percent of Las Vegas buyers want mixed use, which is a large percentage given 35,000 to 40,000 homes are built a year. There's not enough units to keep up with that demand, which is why Smith said he believes that like the high-rise condo market, there will be a lot of firms announcing mixed-use plans, only to see them fall by the wayside.
"People who don't know what they are doing will jump on the bandwagon," Smith said.
Las Vegas housing analyst Steve Bottfeld said it's only a matter of time before the concept explodes in Southern Nevada with younger generations preferring a lifestyle where they can park their car on Friday and not have to get in it all weekend.
The District was first but the wave of projects that are coming will take it to the next level by providing housing in more affordable price ranges from local residents. Even the Henderson master-planned community Inspirada will have mixed-use development at its core. With residential land running $750,000 an acre, the only way the make housing work is increasing the density, he said.
"The District was the forerunner, but we have been looking at this concept get closer and closer," Bottfeld said. "It is running across all levels of the economic spectrum. I am a big believer in the entertainment village, but I believe it is going to be a mainstay for some time to come."
The mixed-use concept has even been embraced by what would normally be traditional retail and entertainment projects.
Town Square Las Vegas, a 1.5 million square foot lifestyle center developed by Turnberry Associates and Centra Properties includes office space with its 150 retail shops, 12 restaurants and a movie theater. It will open in November and include the Las Vegas Chamber of Commerce.
"For an office owner and their employees, it is important to have those amenities, said Mike Wethington, general manager of Turnberry. "It is part of their decision on where they put their office. It's not only for your employees but the people who come to do business with you. If you have a lunch meeting, all you have to do is walk downstairs. You don't have to drive for 30 minutes."
Town Square couldn't include residential because of its proximity to McCarran International Airport.
Brian Wargo covers real estate and development for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4011 or by e-mail at wargo@lasvegassun.com.