Out in the desolate, dusty Nevada desert on a lonely road 17 miles from the Las Vegas Strip, sprung by dreams aplenty and lots of elbow grease, a haute, larger than life and get-away-from-it-all Italian-style community was born. Lake Las Vegas symbolized the best life had to offer in Las Vegas. Shangri-la homes clustered around a man-made dazzling two-mile-long azure lake, encircled by palm trees and three championship golf courses (two designed by Jack Nicklaus), featuring complimentary spas and two world-class hotels – Loews Lake Las Vegas Resort and Ritz-Carlton.
A stylish replica of Florence’s Ponte Vecchio Bridge, a popular venue for weddings, crosses the water on the south end, near a tasteful, small casino.
Even singing diva Celine Dion saw fit to build with her husband, Rene Angelil, their home on the lake’s south shore.
Now, those symbols of opulent affluence and good times largely ring hollow, the dreams from which they were spawned largely dashed, remaining sour tributes and testimonials to our deep and continuing recessionary woes.
The idea of exclusive desert resort living originally was the brainchild of J. Carlton Adair, an actor and businessman. Adair acquired the land in 1966 in a swap with the federal government that also included the rights for 10,000-acre feet of water. Creating what he planned to call Lake Adair would require damming water destined for Lake Mead, the Colorado River reservoir that provides water to Southern Nevada.
But Adair went bankrupt before his dream was realized and a subsequent group of investors also failed to raise the necessary money.
Developer Transcontinental Corporation took up the cause in 1990, a year before the dam was completed. The city of Henderson, a bedroom community next to Las Vegas, was attracted by the promise of a new solid tax base. It agreed to sell the community the water it would need to replenish the evaporation under the scorching sun. The community pays a water bill of about $2 million a year.
Last year, Transcontinental lost the property in foreclosure after defaulting on $540 million in loans. The new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. One if its anchor hotels, a Ritz-Carlton owned by Village Hotel Investors LLC, also filed bankruptcy to stave off foreclosure and has been sold to new owners. One of three premier golf courses has been abandoned.
The current owner of much of the land and amenities is now Atalon Group. “Like many large-scale second home and resort communities throughout the country, Lake Las Vegas has had to adjust to the decreased demand for property and pricing of investments,” Frederick Chin, president of Atalon subsidiary LLV Holdco LLC, said in a statement.
“Atalon’s goal for Lake Las Vegas is to reset and reposition the community to flourish as market conditions improve, thereby achieving what is in the best interests of homeowners and stakeholders alike.”
After the development filed for bankruptcy in July, corporate officials won approval to pay for urgent repairs to prevent the premature deterioration of two pipes underneath the lake. They argued the damaged pipes threatened to drain the lake like water from a bathtub.
Some residents are fighting like mad, trying to stave off what many think will be the inevitable demise of their homes and the community, while working to hold Atalon to its commitment. One group is trying to arrange to buy the private South Shore Golf Club now tied up in the bankruptcy.
But other residents and businesses are ready to move to less remote pastures.
New-home construction has slowed to a crawl, though the community is far from built out. Foreclosures have spread like a virus, and home values are falling.
Resident and real estate agent Lynne Hoffman has had her Lake Las Vegas home on the market for three years with an eye toward moving to a community closer to more ordinary comforts — supermarkets, clothing stores, and a bank.
She’s dropped her price to $488,000 – $40,000 less than she paid in 2001. She gets offers from potential buyers, she says, but they lowball her lowball price.
Plenty of properties have fallen much further from the height of Southern Nevada’s real estate bubble, one of the most inflated in the nation.
Real estate listings show a 4,000-square-foot mansion that sold in 2005 for $2.7 million was marked down to $1.2 million in May. A 1,700-square-foot condominium that sold for $1.2 million in 2004 is now listed for $389,000.
Celine Dion’s home was purchased for $1.2 million in 2002, as the Canadian songstress began what became a five-year run at Caesars Palace on the Strip. Since then, Dion has moved on to other gigs and the home has only sunk in value to about $795,000, according to estimates on Zillow.com.
Residents are jumping ship. In May, nearly 10 percent of the homes on the market at Lake Las Vegas were either bank-owned or short sales. Nearly 80 percent of the homes listed were vacant.
And although home values have dropped to affordable levels for potential middle-class buyers, homeowners’ association fees that go to pay for upkeep of common areas have not. Some residents pay three such fees, adding more than $500 to a monthly housing bill.
Lake Las Vegas, a community designed as both a resort and residential destination, is heavily dependent on second-home buyers and tourism. Both faltered when the economy sputtered, leaving now a big question mark on the future viability of the once stylish, trendy community.