General Growth Properties' first payment on the Shoppes at Palazzo came in about $200 million less than originally projected thanks to the effect of construction delays on the complex transaction with Las Vegas Sands Corp.

Still, by 2011 when General Growth is scheduled to make its final payment on the mall in the Palazzo, Las Vegas Sands officials expect they will have received more than $700 million.

Las Vegas Sands, owners of The Venetian, Palazzo and Sands Expo and Convention Center, reported in January it had been expecting an initial payment of $500 million from General Growth, according to the real estate Web site GlobeSt.com. It came in at $290 million.

The deal changed, however, when the mall opened in January with fewer stores than expected ready for business.

A source close to the deal said the reason was construction delays, not a slowdown in demand for space in the mall.

"We would have loved to see the mall open all at one time," the source said. "It is about construction, not about lack of tenants."

The reason for changes in payment amounts is due to the structure of the transaction. Terms of the sale call for payments to be tied to a percentage of the mall's net operating income.

General Growth will pay a 6 percent rate on net income up to $38 million and an 8 percent rate on income above $38 million.

When the mall opened without a full roster of stores, it meant net operating income, and the initial payment, would be low.

The two sides retooled the deal, however, by increasing the number of payments from four to seven.

As more stores open and income rises, the payment amounts will increase.

And when the deal closes, General Growth will have spent more than $1 billion buying malls from Las Vegas Sands. In 2004, the Chicago-based company agreed to buy the Grand Canal Shoppes at The Venetian. It would end up paying about $776 million for the approximately 400,000 square-foot mall.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or (702) 477-3861.