Diners and workers at Social Bistro & Wine Bar, a restaurant in Tivoli Village, have a close-up view of the Las Vegas property’s expansion. And lately, staff say, there hasn’t been a whole lot of action.
Three buildings are under construction nearby, but one is just a steel frame and “has been the same since I’ve been here,” said cook Peter Witter, who’s been on the job a few months.
Joel Finkielsztein, a line cook, said he recently spoke with other workers at the Mediterranean-themed shopping and office complex near Summerlin, and “nobody knows what’s going on.”
Construction crews are working, but not around the clock, and while the project has made big advances this year, things are sluggish at times, according to employees at Tivoli.
“It’s slow coming,” one worker said.
Tivoli’s expansion — poised to bring more than 270,000 square feet of retail, offices and entertainment space — is one of the bigger commercial construction projects underway in the Las Vegas suburbs. But it’s years behind schedule, and management is staying mum on when it will open and which tenants are lined up.
The expansion isn’t the only delayed retail project in the neighborhood, and it comes amid hefty new competition: A few miles away, the 106-acre Downtown Summerlin opened last fall and has been luring shoppers, retailers and office users.
Meanwhile, a company is claiming in a lawsuit that Tivoli management signed a lease with it merely to trigger millions of dollars in funding for the expansion and then reneged on the rental contract.
Tivoli’s only announced tenant for the new portion is upscale home-furnishings store Restoration Hardware. Discount-clothing chain H&M has reportedly signed a lease, as well, and a local broker said hotel group Kimpton — known for sleek designs, pet-friendly properties and, as the broker put it, “good people watching” — has been in talks to open a hotel there between fall 2016 and spring 2017.
Tivoli, owned by Israeli conglomerate IDB Group, and Downtown Summerlin, owned by Dallas-based Howard Hughes Corp., “undoubtedly compete” for many of the same tenants. But thanks in part to the area’s demographics — Summerlin is one of the most affluent places to live in Las Vegas — both projects can succeed “if managed correctly,” said broker Dan Hubbard, a senior director of retail services with Cushman & Wakefield Commerce Real Estate Solutions.
One of the biggest problems for Tivoli has been its “lack of critical mass due to the limited size of the first phase, and the extended timing on getting the second phase completed,” Hubbard said. Landing Restoration Hardware and H&M was a “huge win” for Tivoli, he said, but the property’s success “will still ultimately depend” in part on signing other tenants.
Another broker, an industry veteran who described himself as a “cautious fan” of Tivoli, blamed the construction delays in part on Tivoli going after tenants who ultimately took space at Downtown Summerlin. He also said there’s “a lot of fatigue with people,” given how long the expansion has been planned.
“Everybody’s heard about it for so long,” he said.
Overall, Tivoli has fared “OK,” RCG Economics founder John Restrepo said. The stylish property has a number of restaurants that draw strong crowds, but he said other retailers there have "kind of suffered.”
“Personally, I don’t understand why they’re expanding at all at this point,” said broker Ray Germain, associate vice president of retail investments with Marcus & Millichap.
Efforts the past few weeks to interview Tivoli President Patrick Done about the project's timeline and tenants were ultimately denied by a public relations representative.
Tivoli management announced in May that Restoration Hardware, based in the San Francisco Bay Area, would be the new portion’s anchor tenant. The four-level store was set to open in 2016, the news release said.
Restoration Hardware spokeswoman Emily Reaman said this week that “we do not have any further information to share” at this time.
Kimpton, based in San Francisco, operates more than 60 hotels.
"At this point we don’t have any news to share. …I look forward to talking with you down the road," spokesperson Brandyn Hull said, in response to inquiries about the possible hotel at Tivoli.
Tivoli’s expansion is a long time coming. Built during the boom years at Rampart Boulevard and Alta Drive, Tivoli was supposed to open in 2009 with 500,000 square feet of retail and 200,000 square feet of offices, but then the recession hit. Developers considered mothballing the project but chose to build in phases instead.
The first portion opened in spring 2011. In fall 2012, Done said the second and final phase — the current expansion — was expected to be completed in late 2013. But construction didn’t begin until October 2013, and at that time, developers expected to finish in spring 2015.
About five months after construction began, New York-based Carlton Group announced that IDB had hired the firm to sell a 50 percent stake in its Las Vegas real estate holdings. The portfolio included Tivoli; a dozen unsold units at high-rise condo complex One Queensridge Place; and almost 20 acres of nearby land.
At the time, Carlton said H&M and Restoration Hardware had signed leases for 25,000-square-foot and 70,000-square-foot stores, respectively, in the new section.
A call to Carlton seeking comment for this story was not returned, and efforts to speak with H&M also were unsuccessful.
Meanwhile, a lawsuit filed in May by First 100 LLC — which buys delinquent accounts from community associations which then foreclose on properties in exchange — claims that it signed a lease for office space at Tivoli in spring 2013. The Las Vegas company received 40 months of free rent, a perk valued at more than $2 million, says the lawsuit in Clark County District Court.
However, in late 2013, Tivoli allegedly terminated the lease with “a curt” four-line letter and changed the locks on First 100’s offices, without first getting an eviction notice or hearing, the lawsuit claims.
While first meeting with First 100, the landlord said the amount of space the company wanted “would satisfy” a rental threshold that would let Tivoli “access ‘millions of dollars’ of funding or financing” for the expansion project, the suit alleges.
According to the complaint, Tivoli signed the lease “for the purpose of” getting that money. Management “defrauded and deceived” First 100, as the landlord “did not intend to honor” the lease, the lawsuit claims.
Hashem Karoum, general counsel for Tivoli Village, did not respond to an email seeking comment.
IDB developed Tivoli and One Queensridge — two 18-story towers across Rampart — with Las Vegas-based EHB Cos. The two companies reportedly split ways a few years ago, with IDB taking control of Tivoli and One Queensridge.
Before that, EHB filed plans with the city in spring 2011 to build a 750,000-square-foot indoor mall and 100 condo-type units across the street from Tivoli. The company had bought the 23-acre site, adjacent to shopping center Boca Park, from City National Bank, which had foreclosed on it.
The planned mall, dubbed Las Vegas Renaissance, was poised to be connected to Tivoli via a pedestrian bridge over Alta Drive, and slated to open by spring 2015.
Today, however, the fenced-off dirt site is empty with no signs of work. On a project sign, space has been blackened out under the words “For leasing information on this enclosed retail center.”
City National sued the landowner in spring 2013. The lender claimed it gave a $4.7 million loan to the buyer, who allegedly owed that much and more by the time the lawsuit was filed.
Asked for an update on the mall’s development plans, EHB President Frank Pankratz said: “We’re in litigation, so I can’t provide any further comment.”