Divide and Conquer

At a power center near you, Las Vegas is starting to carve up its big boxes

Scot Marker knows every nagging commercial real estate statistic. He knows what’s empty (and there’s a lot of it), what’s not and why. But if you really want to see the senior vice president of Collier’s International’s Las Vegas retail leasing division get enthused, say these words: Cardenas Market.

At the mere mention, shoptalk loses momentum and the topic of savory marinated chicken dominates. But what Marker really loves about Cardenas is that it used to be a Mervyns. Cardenas is part restaurant, part cultural meeting place and part grocery store. Its specialty in Latin American varieties somehow brings in a crowd exclusive to no particular demographic. It has become an inviting place for a diverse Las Vegas crowd, both white-collar and blue—and brings a cultural richness that a homogenous discount clothes retailer like Mervyns clearly couldn’t.

To fill the glut of empty commercial space, this kind of repurposing is the name of the game. Look around your neighborhood: What was once envisioned for a strip mall or anchored power center could likely be something very different in the coming years.

The repurposing movement is young but energetic as our city ponders a new economic approach, one less dependent on real estate bubble dreams.

There are many fingers pointed in many directions to explain how we got here. We grew incorrectly and we knew it, says June Williamson, co-author of Retrofitting Suburbia (Wiley, 2008), and an associate professor of architecture at the City College of New York.

In her book, Williamson looks at Wall Street’s influence on sprawling suburban development around the country and also in high-growth areas of the South and Southwest. She argues that too much emphasis was put on a developer’s past success with a particular development type, whether it was strip centers or anchored power centers or malls. Looking only at that piece of the development puzzle for any site created a one-sided motivation: short-term profit. Little thought was put into a building’s use and functionality a decade down the road. Shopping-center space per capita was in an oversupply long before the recession started.

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And so, at shopping centers across the Valley, the subdividing of yawning big boxes has begun: A recent marquee example is the Nike Outlet store taking over half of the 30,000-square-foot former Nordstrom Rack space at Silverado Ranch Plaza. This type of transformation brings a measure of hope to the market—but it comes at a cost: Physical changes take time and money, and subdivided spaces often go partly unfilled.

“This is more than just throwing up a wall,” Marker says. “It’s electrical. It’s plumbing, HVAC. … It needs to make sense.”

But with shrinking consumer spending, the value play is huge. Marker foresees dollar stores and other discount retailers filling big real estate voids like those left by Borders and others. He’s heard of Walmart playing at the mom-and-pop game, too, tinkering with a smaller grocery concept to take a competitive run at Trader Joe’s.

These are temporary fixes—not so much paradigm shifts as replacements for failed retailers. But more inventive ways may be afoot.

Growing disenchantment with the county’s school system is fueling the charter school movement, says Eric Roberts, vice president of SH Architecture. Several groups looking to open schools have approached his firm. And where will they set up shop? Likely in those many anchorless small strip centers dotting our suburbia, he says.

“You’re not going to get a better anchor tenant than a school for those,” the architect adds.

Roberts also boasts Faciliteq on his company’s résumé, an office furniture supplier that a few years ago opened up at its downtown Main Street location in an automobile-repair shop built in the 1940s.

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Williamson envisions a 60-year retrofitting process on the horizon, since it took about 60 years from the post-World War II expansion to create so much oversupply. It will be one that includes what she and co-author Ellen Dunham-Jones call “re-inhabitation,” with new kinds of products and institutions moving into traditional retail spaces. Even churches can take up a big-box retailer location, Williamson says.

Overall community planning and interconnectivity of locations will be a bigger dialogue. In some cases, commercial space may be given up for public space or civic enjoyment, or “places you can go where you don’t have to buy something,” Williamson says.

One example of this could be Las Vegas’ Tonopah Community Garden, a 5-acre site zoned for commercial development. When the commercial idea was abandoned, the land was donated for the garden.

Williamson is optimistic that the coming changes will strengthen communities and may help establish a more sustainable development approach overall. For now—when it’s difficult to find financing for any small project—pad and paper may be the best tools in place.

“The good news is that planning is cheap,” she says.