Lake Las Vegas: Elusive Mirage or Delusional FAIL?

Today's Sun has a blistering story on the disasters now plaguing the once grand and luxurious Lake Las Vegas. It's hard to imagine that anyone was imagining this for the synthetic "lakeside village".



I guess one can find a little "dark humor" in the end of the video when they flashed this disclaimer:

NOTE TO VIEWER

Please remember that some of the concepts described in this show are, at this stage, just that: ideas and possibilities that will be tested and explored as the vision for Lake Las Vegas Resort continues to evolve.

I have a feeling Ron Boeddeker and California-based Transcontinental Corporation did not consider foreclosure (even of their development, and only then for Atalon Group, the company that took over in 2007, to file for Chapter 11 Bankruptcy in 2008!), an abandoned hotel, a shuttered casino, three closed golf courses, and a nearly empty shopping center as great "ideas and possibilities"... But nonetheless, that's what testing everyone in Lake Las Vegas today.

Marianne Freeman, who owns Tesoro, a home furnishings and accessories store, blames the slowdown in the village on the bankruptcy buzz.

“When the news of the bankruptcy information hit last year, the perception by the local clients was that Lake Las Vegas is closed,” she said. “People stopped coming out.”

Some residents shrug off the depressing scene.

“I don’t think what’s going on in our community is any different from what is going on in the rest of Las Vegas,” SouthShore Homeowners Association President Vicki Hafen Scott said.

Her custom-home neighborhood is one of 19 in Lake Las Vegas, where home prices range from $365,000 to $3.3 million, according to SalesTraq.

During 2005-06, 10 custom homes were selling a month, SalesTraq President Larry Murphy said.

In 2009, custom-home sales slowed to fewer than one a month.

Home Builders Research President Dennis Smith said the difference between Lake Las Vegas and Summerlin, whose developer is also in bankruptcy, is Summerlin’s varied offerings.

“Historically, Lake Las Vegas has targeted one small segment of the spectrum and that is your luxury buyer or investor. When the market went bad and you don’t have that diversity, it’s going to affect you more,” Smith said.

So what's to blame for Lake Las Vegas' many troubles today? Is it simply the bad economy, or was it a bad plan from the get-go? Are all the naysayers who told Ron Boeddeker in the 1980s that his dream of a grand lake in the middle of an uninhabited desert proving to be postmodern Cassandras?

Or should we just pay more attention to my favorite philosopher... LADY GAGA!!!!



OK, so I use whatever excuse I can to slip one of her awesomely fabulous vids in my diaries. But really, are we plagued by the monster again? You know, the monster of unsustainable exurban sprawl and overall environmental waste. Now yes, real efforts are being made to make Southern Nevada a more sustainable place to live, work, and play...

But how the hell does a synthetic lake in the middle of an otherwise uninhabited stretch of desert fit into the "sustainable development, smart growth" equation? Lake Las Vegas stakeholders, including the City of Henderson and SNWA, really need to think about real, workable answers to this tough question.

And hey, since we're talking about sustainability, what about the economic sustainability of this place. The Vegas Gang discussed the (lack of) tourist appeal in staying in a remote "village" some 17 miles away from the endless party on The Strip, and Steve Friess has chronicled the hot mess of this place for some time. And when one thinks about it, it just becomes even more difficult to understand: What's the appeal to tourists coming to Las Vegas? Why would they fly into Las Vegas just to get away from Las Vegas?

Going back to Dennis Smith's comments, it's really difficult for me to see a way out for Lake Las Vegas since it mostly appeals to uber-high-end vacationers and part-time "residents". And unless they're really attracted to that lake, they can already either find comfortable suburban luxury in the more convenient gated communities of Red Rock Country Club and MacDonald Highlands, or make the ultimate "status statement" by buying one of the (bargain priced!) penthouse condos on or near The Strip at CityCenter or one of the Turnberry communities.

So what is the future of Lake Las Vegas? Honestly, I keep trying to find an answer myself. All I know right now is that residents and shop owners there have some tough questions to consider, and our government and local developers will have to think long and hard on how to avoid any more environmental and economic catastrophes of this proportion.

Station Casinos: Bankruptcy Judge Urges Station & Creditors to Negotiate

So is US Bankruptcy Judge Greg Zive punting? Is he ruling in favor of Station Casinos? Is he ruling in favor of the creditors? Why don't you take a look here.

After six hours of arguments, a federal bankruptcy judge advised Station Casinos and unsecured creditors to hold negotiations over a $2.3 billion debt, rather than face legal action.

U.S. Bankruptcy Judge Greg Zive withheld a ruling on the petition by the unsecured creditors to be allowed to sue over the arrangement of the 2007 leveraged-buyout deal that took the casino company private.

Susheel Kirpalani, attorney for the creditors, told the judge the creditors “were left holding the bag” while “insiders and fat cats” got big payouts in the $8.9 billion buyout by Colony Capital and the Fertitta family.

“The unsecured creditors were harmed by the transaction,” Kirpalani argued. He called it a fraudulent transfer.

But Thomas Kreller, attorney for Station, said a suit would result in “acrimonious litigation” and would disrupt the chances of coming up with a plan for the company's reorganization.

He said denial of the unsecured creditors' right to sue wouldn't extinguish the money owed. But permitting a suit, Kreller said, would result in “significant and irreparable harm” to Station. [...]

Zive said he didn't see any evidence of fraud in the buyout by Colony and the Fertitta family in taking the company private.

Zive advised Station Casinos to allow the unsecured creditors to be a “meaningful participant” in the talks toward reorganization. He said he believed there would be “unintended consequences” if he permitted a suit go forward at this time.

“I find people negotiate when people have a little bit of risk,” in advising the two sides to talk, Zive said. “The creditors deserve to be heard.”

If there are no negotiations, Zive said “I’m willing to rule. It may not be in the best business interest but it will be on the law.”

So reading the tea leaves, it seems the judge thinks the creditors are making some sort of legitimate claim, but they're overplaying their hand and Station isn't helping by not even wanting to listen to them. And who knows, maybe a judge ordered "mediation" can do the trick? Nah, they're all still bickering and more law suits are being threatened every day.

So the creditors won't be getting their new law suit, but it looks like they'll be getting something out of Station soon... And Station remains in a precarious situation as they teeter on the edge of fading out of existence. I'm sure Boyd Gaming is loving every minute of this...

F-bleau: Well Ain't This Interesting, Carl Icahn Takes It After All

OK, back to the important news of the day. Carl Icahn is back, and he wants another Strip casino.

Carl Icahn is expected to take over ownership of the bankrupt Fontainebleau Las Vegas resort after two potential competitors vying to buy the property failed to submit qualifying bids as of a 5 p.m. deadline Friday.

The U.S. Bankruptcy Court in Miami, where Fontainebleau filed for bankruptcy protection last year, is expected to conduct a hearing Jan. 27 to approve the sale of the Las Vegas Strip property to Icahn, who bid $156.2 million for it last year. [...]

Icahn could not be reached for comment. In a court filing, attorneys for Examiner Jeff Truitt said Truitt received two "submissions" for Fontainebleau on the bid deadline. The filing didn't identify the parties that made the submissions.

"However, for various reasons, including that neither of the submissions were accompanied by either the requisite deposit or satisfactory evidence of the financial ability to close a sale transaction, the examiner has determined that the submissions are not qualified bids," the court filing said. "Accordingly, the only qualified bid received by the examiner is the Icahn Nevada Gaming Acquisition LLC bid. Based on the foregoing and in accordance with the bidding procedures, there will be no auction for the assets."

San Francisco real estate investor Luke Brugnara is also trying to bid on F-bleau, but it doesn't look like the court wants him anywhere near this property. Lesson learned, kids... Don't come to a cash game begging for credit.

And what exactly will become of F-bleau once Icahn does take control as now expected? No one knows for sure, except everyone seems to agree this means the finished project most likely won't completely resemble what original developer Jeffrey Soffer had planned for it.



And not that long ago, Liz Benston read the tea leaves and offered a strong possibility for Fontainebleau's future.

With lower and middle classes flocking to Las Vegas during boom years, Stratosphere [Icahn's last big Vegas purchase] was in the right place at the right time.

Perhaps Icahn wants to create a mid-market resort out of Fontainebleau — a strategy that might appeal to bargain-hunting tourists soured on fancy hotels. The property might complement the nine casinos Icahn is acquiring as part of Tropicana Entertainment, which includes the MontBleu resort in Stateline, Tropicana Express in Laughlin and Tropicana resort in Atlantic City. (The Tropicana in Las Vegas, acquired by another buyer out of bankruptcy, wasn’t part of the deal.)

Or perhaps Icahn is bluffing.

In one sense, he has shown his hand. Icahn has gone where other investors have feared to tread — making a fortune on the business missteps of others. [...]

While $156 million sounds like a steal, it might still be too much for others — without Icahn’s knack for timing — to stomach.

This may make sense, as it seems The North Strip (or at least everything north of Wynncore) is destined (or doomed, depending on one's point of view) to remain a lower-end "Vegas experience". There's still a possibility Icahn may not do anything but let it rot a la Echelon for a couple year, but judging by Icahn's past Vegas moves it seems more likely he'll finish F-bleau, but not in the uber-high-end manner that Soffer and his Miami buddies had intended. Instead, he may spend less than the $1.5 billion that Penn National Gaming suggested was needed to finish the project (as Soffer had intended) and open F-bleau (Or is it "New Tropicana"? Or "Stardust Reborn"?) as a more mid-range or bargain casino.

Who knows? Maybe we're all wrong? Or maybe Carl Icahn has a few more tricks up his sleeve that he doesn't yet want to show us?

Nevada Still #1 in Bankruptcies, But Credit Card Delinquency Down

Uh oh, more bad news...

The Administrative Office of the U.S. Courts reported that nationwide, bankruptcies for the fiscal year ended Sept. 30 surged 34.5 percent to 1.4 million -- with Nevada posting the highest rate in the nation.

Nevada led the nation in filings for the year with a rate of 10.49 per 1,000 people, well above the national rate of 4.52 filings per 1,000 people.

In 2008, Nevada was No. 2 in the nation with a filing rate of 6.39 per 1,000 people and the national rate was 3.38 filings per 1,000 population.

In Nevada in the 2009 fiscal year, bankruptcy filings totaled 27,560 -- up 64.5 percent from 2008.

It's obviously still hard times in Nevada this holiday season with so many people at risk to lose it all... But at least more people are taking extra precautions to avoid this financial disaster.

Also, credit report company TransUnion.com issued third-quarter credit card delinquency statistics, with Nevada again leading the nation with a rate of 1.98 percent.

That's the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards and compares to the national rate of 1.1 percent.

The national rate was down from 1.17 percent in the second quarter.

Despite leading the nation in this category, Nevada's numbers improved from the second quarter (2.19 percent) and the first quarter (2.44) percent.

In terms of dollars, the average credit card balance in Nevada was down 3.16 percent from $6,517 in the second quarter as Nevadans reduced spending and banks limited lending.

TransUnion.com projected that by the end of the year, the rate in Nevada is expected to drop again -- yet still lead the nation at 1.9 percent. Nationwide, the rate is expected to remain steady through the fourth quarter at 1.1 percent.

The new forecast reflects slightly more optimism about credit card performance in Nevada and around the country. Just three months ago, the national rate was expected to hit 1.2 percent and Nevada's rate was expected to grow to 2.25 percent by the end of the year.

Ain't it funny how it takes an economic meltdown like this to get people to become more financially savvy and prudent? It's too bad the federal government didn't require the big banks to be more prudent last year. But then again, it's always we the consumers who are required to be "fiscally responsible" while Wall Street gets more bailouts.

Well, at least people are being more responsible and credit card debt isn't as bad it used to be not too long ago. I guess we have at least some somewhat cheerful news today. Now excuse me while I check my bank account balance and prepare my December budget...