Sunday, October 05, 2003
Copyright © Las Vegas Review-Journal

NEVADAN AT WORK: GARY FREY, President, Frey Development Co.

Helping golf tourney oversight group suits property builder to a tee

When he's not building projects around Las Vegas Valley, Frey Development Co. President Gary Frey works with the Las Vegas Founders' Club, the nonprofit group overseeing the Las Vegas Invitational. Photo by Amy Beth Bennett.

It's no secret that businesspeople and golfers are often synonymous, but Gary Frey remains convinced most locals are unaware of just how much that combination benefits the Southern Nevada community.

When he's not building residential and commercial projects around the Las Vegas Valley, the 42-year-old president of Frey Development Co. works with the Las Vegas Founders' Club, a nonprofit group that oversees the Las Vegas Invitational, the city's annual Professional Golfers' Association of America tour stop.

As fans this week follow the local actions of many of the world's best golfers, they're also supporting the Founders' Club's efforts to assist multiple local children's charities.

"The PGA is based on the format in which most of the money is given back to communities," Frey said. "People don't realize we've given up to $1 million a year back to the community."

Frey said that in addition to its charitable efforts, the golf event, now in its 21st year, plays a vital role in boosting the city's tourism industry by promoting Las Vegas as a leading golf destination.

This year, the loss of recent event sponsor Invensys has heightened the need for locals to support a sporting event that in turn supports them, Frey said.

"Mayor Oscar Goodman talks about bringing the Montreal Expos (baseball team) here, but let's worry about keeping an event we already have, something that has a track record," Frey said. "If we lose this, it will be a huge detriment to bringing any other sport to Las Vegas."

Away from the links, Frey Development's notable projects include the Sante Fe Mining Co. tavern at 5021 N. Rainbow Boulevard, the 220-unit Opus condominium project at 5750 E. Hacienda Ave. and the new Seven Hills Medical Center in Henderson.

In addition to his work as a developer, Frey heads Creative Sales & Marketing, a Southern Nevada home selling venture, and Third Eye, a construction documentation company.

Question: How does the Las Vegas Invitational benefit local charities?

Answer: Money made by tournament goes to foundation, which gives it back to locals children's charities. Our contributions aren't geared toward operations but `sticks and bricks.' It might be paving a parking lot for the Boy Scouts and Girl Scouts or buying buses for Classroom on Wheels. We also give to the building funds for places like the Shade Tree Shelter, Southern Nevada History Museum and First Tee, a golf program for underprivileged kids.

Question: Why focus on capital contributions?

Answer: You can't control how someone operates a business, even a charity or foundation. This is something tangible we can say we gave. We don't want to offer grants for postage or copy machines; programs that really help the kids are more beneficial to us.

Question: How will the loss of its primary sponsor affect the golf tournament?

Answer: You can do it (without a sponsor), but you won't be able to give as much money to local charities.

Question: Given the number of local businesses that benefit from its exposure, why hasn't the event been able to locate a new sponsor?

Answer: PGA tour regulations prevent use of the term `casino' in promoting the event, but I'm hopeful those restrictions will relax over time.

We have huge support from the Las Vegas Convention and Visitors Authority to help us buy the TV time we're obligated to purchase as part of the tour package, but we don't have a main sponsor.

We've tried to make up the difference through sales and sponsorships to local companies such as Station Casinos, which is giving away free tickets to anyone who goes inside their places and asks. We're trying to get the word out to the local community that we need their help.

Question: If the primary backer can't be a casino company, is a locally based sponsor available?

Answer: It could be a local company, but more than likely not.

We're talking about $3 million to $4 million a year, depending on what a company wants to do. But if you're a car manufacturer or an electronics company and could pick between this or some other city in terms of event hospitality, where would you go? It's not all just about golf. Invensys used it as a huge time to come together for corporate meetings, networks and executive events here in Las Vegas.

Question: On to your day job. How did you get into the construction industry?

Answer: My family has been building in Las Vegas for many, many years. I worked for my stepbrothers at Pacific Properties and the Molasky family of companies as a family member participating. That's where I learned to appreciate the business.

Question: Looking ahead, what challenges do you see in store for local builders?

Answer: Land prices are astronomical. You see home builders buying commercial and industrial land and downsizing it for housing.

It's scary to see that entry-level price has gone up such a huge percentage in recent years that we might price ourselves out of the market. It's the same for apartments; if you pay $250,000 an acre you're paying $18,000 a door. The rent is going to have to be so much higher than it is now.

I see huge opportunities for redevelopment, not just in downtown areas but in older neighborhoods where you might be able to buy 10 houses, tear them down, and build eight new ones.

Question: Why did you recently shift your company's focus from building multifamily condominiums to commercial, retail and medical office projects?

Answer: The main part is the construction defect lawsuits that have been plaguing our industry here. They've pretty much driven me out of the multifamily business by making insurance both harder to get and very costly.

My insurance has gone up from $100,000 to over $500,000 a year. It's really easy to pass that increase on to the homeowners, but at some point you're going to price yourself out of the market.

Question: Given those circumstances, is it frustrating to hear about the growing lack of affordable housing in Southern Nevada?

Answer: People don't understand that these lawsuits drive up the prices they pay for homes. I'm building a project in Green Valley that is the same product I built on East Sahara Avenue a couple of years ago. The new product sells for almost $25,000 a door more than a year or so ago.

Some of that increase comes from higher land costs and fees, but the insurance is almost $5,000 per unit.

Question: Are there other factors that are driving up construction costs?

Answer: Lumber prices have gone through the ceiling, almost doubling from a year ago and up nearly 30 percent from just last month. Part of that is from the hurricanes, but people also don't realize the U.S. government bought the next six months' worth of lumber to ship to Iraq to help rebuild things.