PRIMM – Edgar Alvarado was walking around the sprawling outlet mall in Primm with his cousin one recent afternoon. Even if they wanted to shop all day, there were only so many places to spend their money.
The mall, Prizm Outlets, has just a handful of retailers left. Almost all of the stores inside are vacant, the food court is closed, and the fountains where people could toss coins for charity are bone dry.
“It’s depressing,” Alvarado said.
“The paintings are cool,” his cousin Javier Alvarado chimed in, citing the murals that blanket the corridors. “Doesn’t change the fact that it’s dead in here.”
Prizm, about 40 miles south of the Strip on the California border, faced increased vacancies and foreclosure proceedings even before the pandemic hit. It has since been purchased for a fraction of what it was once worth, and now a lawsuit has been filed claiming Prizm “exemplifies the death of the American mall in under-serviced areas.”
Funds managed by billionaire Carl Icahn sued Rialto Capital Advisors in Clark County District Court last month, alleging the Miami firm “manipulated appraisals” after it foreclosed on the mall in 2018 and embarked on a “quixotic” plan to reposition the property rather than “promptly” sell it.
The mall, appraised 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 that included one tied to Prizm, and Rialto serviced the soured loans in that pool, the lawsuit indicates. According to the complaint, the funds and other certain bondholders should have obtained certain control rights, but Rialto allegedly “schemed to deny control” to those investors “while running Prizm Outlets into the proverbial ground.”
New York law firm Kasowitz Benson Torres LLP, representing Icahn’s funds in the case, issued a news release in June saying it had filed the lawsuit.
Rialto did not respond to requests for comment.
Attorney Jake Greenberg of Miami law firm Bilzin Sumberg Baena Price & Axelrod LLP, who according to court records is representing Rialto, could not be reached for comment.
Prizm, formerly Fashion Outlets of Las Vegas, sits off Interstate 15 and is attached to Primm Valley Resort. The mall is positioned to lure people who are driving between Las Vegas and Southern California — a heavily traveled route — and want to stop in to shop for bargains.
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, the corridors were lined with vacant shops, stretches of the mall had no one walking around, and the food court was empty and blocked with yellow caution tape.
“DO NOT ENTER. POLICE WILL BE CALLED! RESTROOMS CLOSED!” a sign attached to the food-court caution tape declared.
Only five stores inside the mall were open that day: Bath & Body Works, Polo Ralph Lauren, Levi’s, Michael Kors and Sanithrift. Also, some kiosks had items such as cellphone cases, hats and sunglasses, and the Viva Vegas souvenir shop was stocked with merchandise but wasn’t open.
Attempts to sell Prizm in January 2021 resulted in a final bid of just $1.5 million, but the deal failed to close, according to Icahn’s complaint, which doesn’t identify the bidder.
Ultimately, Kohan Retail Investment Group bought the mall in April 2021 for around $400,000, according to the lawsuit, which says the New York firm specializes in buying “troubled” shopping malls.
Efforts to speak with Kohan Retail founder Mike Kohan about Prizm were unsuccessful.
‘Significant deferred maintenance’
Primm’s outlet mall debuted in 1998 to an opening-day crowd of around 10,000 people, and it was 85 percent leased with a roster of stores that included Versace, Calvin Klein and Kenneth Cole, the Review-Journal reported at the time.
By 2007, the property was reportedly 99 percent leased and among the top 10 outlet centers nationally by sales. As recently as 2015, Fashion Outlets of Las Vegas boasted “100 designer outlets,” including Banana Republic, Coach and Hugo Boss.
Within a few years, though, financial issues were brewing.
A notice of default was filed against the property in late 2017 in connection with a $73 million loan, Clark County records show. By spring 2018, the mall had an appraised value of about $25.5 million, down from $125 million in mid-2012, according to mortgage-tracking firm Trepp.
Rialto foreclosed on the property in September 2018, records show. Around that time, the mall was about 66 percent occupied and had “significant deferred maintenance throughout the property,” Trepp previously reported.
Quiet ‘every day’
After the foreclosure, the mall changed its name to Prizm and underwent a face-lift. It tapped roughly 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 location in the United States, the Review-Journal reported that year.
Empty stores still filled much of the hallways at the time.
Prizm faces hefty competition up the highway in Las Vegas, which offers tourists an abundance of places to shop on the Strip. Las Vegas also has two popular outlet malls — one south of the Strip and another downtown — operated by shopping mall giant Simon Property Group.
Roman Toscano, who operates the kiosks in Prizm Outlets, said he has been working there for 20 years and indicated the mall used to have more business.
Now it’s quiet “every day” in Prizm, Toscano said, noting this is “for sure” his last year at the mall.
Icahn Rialto by Las Vegas Review-Journal on Scribd