The mall south of Las Vegas is largely empty

Edgar Alvarado was strolling through the sprawling Primm mall with his cousin one recent afternoon. Even though they wanted to shop all day, there were only a limited number of places to spend their money.

The mall, Prizm Outlets, now has only a handful of retailers. Almost all of the stores inside are vacant, the food court is closed, and the fountains where people can toss coins for charity are dry.

“It’s depressing,” Alvarado said.

“The paintings are cool,” added his cousin Javier Alvarado, citing the murals that cover the hallways. “It doesn’t change the fact that it’s dead here.”

Prizm, about 40 miles south of the Strip on the California border, faced an increase in vacancies and foreclosure proceedings even before the pandemic hit. It’s since been bought for a fraction of what it was once worth, and now a lawsuit has been filed claiming that Prizm “exemplifies the death of the American mall in underserved areas.”

Funds managed by billionaire Carl Icahn sued Rialto Capital Advisors in Clark County District Court last month, alleging the Miami firm ‘manipulated valuations’ after it seized the mall in 2018 and launched in a “chimerical” plan to reposition the property rather than “quickly”. “sell it.

The mall, valued at $125 million a decade ago, was sold last year for just $400,000, according to the complaint.

Icahn’s funds were investors in a pool of commercial real estate mortgages including one tied to Prizm, and Rialto serviced that pool’s impaired loans, the lawsuit says. According to the complaint, the funds and certain other bondholders should have been granted certain rights of control, but Rialto allegedly “conspired to deny control” to those investors “while running Prizm Outlets on proverbial ground.”

New York law firm Kasowitz Benson Torres LLP, representing Icahn’s funds in the case, issued a press release in June saying it had filed a lawsuit.

Rialto did not respond to requests for comment.

Attorney Jake Greenberg of the Miami Bilzin Sumberg law firm Baena Price & Axelrod LLP, which court records show represents Rialto, could not be reached for comment.

Stores closed

Prizm, formerly Fashion Outlets of Las Vegas, is off Interstate 15 and attached to the Primm Valley Resort. The mall is positioned to attract people driving between Las Vegas and Southern California – a busy road – who want to stop in for a bargain.

The single-story enclosed mall spans more than 370,000 square feet, but is largely empty.

When a Review-Journal reporter visited a few weeks ago, hallways were lined with vacant stores, stretches of the mall had no one walking around, and the food court was empty and blocked with trash. caution yellow tape.

“DO NOT ENTER. THE POLICE WILL BE CALLED! TOILETS CLOSED!” a sign attached to the food court’s warning tape said.

Only five stores inside the mall were open that day: Bath & Body Works, Polo Ralph Lauren, Levi’s, Michael Kors and Sanithrift. Additionally, some kiosks offered items such as cell phone cases, hats, and sunglasses, and the Viva Vegas gift shop was stocked with merchandise but not open.

Attempts to sell Prizm in January 2021 resulted in a final offer of just $1.5 million, but the deal was not completed, according to Icahn’s complaint, which does not identify the bidder.

Ultimately, Kohan Retail Investment Group purchased the mall in April 2021 for about $400,000, according to the lawsuit, which says the New York-based company specializes in buying “distressed” malls.

Efforts to speak with Kohan Retail founder Mike Kohan about Prizm were unsuccessful.

“Important Deferred Maintenance”

Primm’s mall debuted in 1998 to a crowd of around 10,000 on opening day, and it was 85% rented with a list of stores including Versace, Calvin Klein and Kenneth Cole, reports the Review-Journal at the time.

In 2007, the property was reportedly 99% leased and is among the top 10 outlet centers nationally in terms of sales. As recently as 2015, Fashion Outlets in Las Vegas boasted “100 designer stores,” including Banana Republic, Coach and Hugo Boss.

Within a few years, however, financial problems surfaced.

A notice of default was filed against the property in late 2017 in connection with a $73 million loan, according to Clark County records. As of spring 2018, the mall had an estimated value of about $25.5 million, up from $125 million in mid-2012, according to mortgage tracking firm Trepp.

Rialto seized the property in September 2018, records show. At that time, the mall was approximately 66% occupancy and had “significant deferred maintenance throughout the property,” Trepp previously reported.

Calm “everyday”

After the lockdown, the mall changed its name to Prizm and underwent a facelift. It enlisted approximately 30 muralists and street artists from more than 15 countries in 2019 with the goal of making the mall the largest street art and mural venue in the United States, the Review reported- newspaper that year.

Empty stores still filled much of the hallways back then.

Prizm faces stiff competition on the Las Vegas Freeway, which offers tourists an abundance of places to shop on the Strip. Las Vegas also has two popular malls – one south of the Strip and another downtown – operated by mall giant Simon Property Group.

Roman Toscano, who operates the kiosks at Prizm Outlets, said he had worked there for 20 years and said the mall had more business.

Now it’s quiet “everyday” at Prizm, Toscano said, noting it was “for sure” his last year at the mall.

Contact Eli Segall at [email protected] or 702-383-0342. Follow @eli_segall on Twitter.

Icahn Rialto by Las Vegas Review-Journal on Scribd

Luz W. German