Not that long ago, people driving into Lake Las Vegas were greeted with dead, brown grass on an abandoned golf course — not a very good first impression for a community built with high-end homes, luxury retail and resorts around a 320-acre lake.
But new owners are revitalizing the front golf course, The Falls, and other common space back to its green state, hoping it will symbolize the return of Lake Las Vegas to residents, business and visitors.
However, they admit they still have a long way to go.
Raintree Investment Corp. acquired The Falls and a second golf course, Reflection Bay, in November for $6 million from the Texas-based financial firm Carmel Land & Cattle Co., which had acquired them after the original owner defaulted. Carmel turned the water off on the 375 acres in 2009, closed the courses and let most vegetation fall into disrepair.
Cody Winterton, a Raintree executive vice president, said the state of the golf courses was among the first questions that were asked by homeowners and businesses when the investment company arrived nearly two years ago.
“This 375 acres touches virtually everybody and every major piece of property in Lake Las Vegas,” Winterton said. “Whether you see it or border it, all of the homeowners and businesses are one way or another impacted.”
The Green Grass Project was born. With 375 acres in disrepair, Raintree immediately set about replacing or nursing back to their green state 150 acres across both courses. Also, 100 acres of neglected trees and bushes are being cleaned, and re-irrigated.
Raintree, an investment firm for New York hedge fund manager John Paulson, held a series of meetings starting in 2012 with homeowners discussing plans for the two golf courses. But before Raintree could acquire the two courses from Carmel, changes to the zoning for both properties had to be made to make a purchase economically feasible. While some of the green would be preserved, permission to build houses on The Falls had to be obtained.
“(Raintree has) done a tremendous job in trying to reach out to each one of the communities and explain what’s going on,” said Vicki Hafen Scott, who has lived in a gated community on the lake’s south shore since 1998.
BANKRUPTCY AND FALLOUT
The 3,600-acre Lake Las Vegas project was the vision of developer Ron Boeddeker, who died in 2010. While some of the land was developed with residences, retail and hotels, the remaining land holdings were forced into bankruptcy in 2008 when Boeddeker’s company defaulted on a $540 million loan with financial firm Credit Suisse.
Even before the bankruptcy was filed, development plans halted on the undeveloped acres, mostly along the north shore. The front and north shore golf courses were abandoned, and the once whole resort community began to splinter. Only about 25 percent of the land for houses had been developed.
As the economic slide began, the residents and businesses were left feeling helpless, abandoned. Residents complained to Henderson city officials about the “ugly mess” that has “been an economic detriment” and a “drain on city revenues” from lost business. But the city had no one to work with during the financial problems with ownerships in flux. No one could be forced to turn on the water, bring back the green.
Resident Bill Milone, who also serves on the community’s seven-member Master Association, said the image of Lake Las Vegas started taking hits even before the bankruptcy was filed. Lenders began showing its investors the steps it was taking to conserve money — pulling back on watering, deferring maintenance — damaging the value of everything in the area.
“The word ‘bankruptcy’ then affected the way everybody thought (about Lake Las Vegas),” Milone said. “The bankruptcy, in some way, was a good thing because it was a reorganization.”
Raintree has acquired nearly all its Lake Las Vegas holdings from Carmel and Credit Suisse, which never had any interest in developing the land or operating the golf courses. The firms just had some assets on its hands after a loan defaults.
Raintree controls nearly 1,000 additional acres beyond the golf courses at Lake Las Vegas. The land acquired in 2012 and 2013 includes 875 acres on the north shore obtained in the summer of 2012. About 565 acres are developable. In all, Raintree spent nearly $31 million acquiring the land, including the golf courses.
A challenge facing Raintree is that it has to bring various parties together to work toward a common goal. It hadn’t always been that way at the lake.
The public struggle of the community’s hotels, casino, shopping and restaurant village and lake health, all of it hurt the Lake Las Vegas image. Some of the businesses have changed hands during the past few years, signaling to residents and visitors what could be a new day. More than $100 million has been invested throughout Lake Las Vegas by Raintree and other new owners, Winterton said.
Henderson City Councilwoman Gerri Schroder, whose ward includes Lake Las Vegas, said, in strange way, all the financial upheaval actually brought the community together.
“It’s something when the whole community comes together for the sake of Lake Las Vegas,” Schroder said.
Patrick Parker, division president with Raintree, said the company has spent the past two years with “its head down,” forging relationships and fixing infrastructure.
THE GOLF COURSES
Raintree now owns two of the three golf courses at Lake Las Vegas. At the Henderson Development Association mixer Feb. 20 at the Hilton Lake Las Vegas, Winterton announced an agreement has been signed with Arnold Palmer Golf Management to operate Reflection Bay. The 18-hole Jack Nicklaus Signature course should reopen by the end of the year.
However, there are other plans for The Falls.
Raintree received approval from the city in September to convert 65 acres on the east side of the course into houses, with the area by the front entrance converted to green space with the two miles of golf pathways used for walking, running and biking.
While Raintree controls two golf courses, the Jack Nicklaus-designed SouthShore Golf Club never closed but was acquired for $4.5 million in February 2011 and is operated by Pacific Links International. The course remained open during the downturn.
THE HOTELS, A CASINO AND VILLAGE
While the land developer was entering bankruptcy, one of the Lake Las Vegas resorts also was asking for bankruptcy protection from creditors.
The 349-room Ritz-Carlton hotel opened at Lake Las Vegas in 2003, but it was rebranded the Ravella in 2009. In November 2012, California-based real estate developer Kam Sang Co. acquired the hotel and adjoining casino in November for $46.9 million, rebranding a Hilton hotel last June.
The connected Casino MonteLago, which is now owned by Kam Sang, has been closed since October when operator Intrepid Gaming pulled out of its contract to operate and manage the casino. Although the casino had been closed once before in March 2010, the latest closing was disheartening to employees and management at the Hilton and the lake community in general.
Howard Harris, general manager of the Hilton, announced at the mixer that the property owners are in the process obtaining a gaming license and the casino should reopen later this year.
Down the road at the Westin Lake Las Vegas, a similar story of financial woe can be told. However, the current management staff is upbeat about the partnership being developed with Raintree.
The Westin originally opened as the 493-room Hyatt Regency in 1999, later rebranded Loews. Westin took over full operations and ownership of the 22-acre resort in 2012, around the time President Barack Obama stayed there prepping for his first debate with Republican contender Mitt Romney.
The company then spent $4 million rebranding the property last year, and $2 million on sales and marketing efforts, according to general manager Greg Gooding.
While the hotels, golf courses and land seem to have new ownership interested in developing and investing, The Village, formerly the MonteLago Village, remains the biggest struggle for the lake community, Milone said, “more than anyone’s realizing.”
Developed at a price tag of $500 million, the village includes boutique retail shops and restaurants within a walkable village-style layout. Today, many of the area’s storefronts are empty, leaving the ones still around struggling for customer traffic.
“The village is probably the biggest piece (to the resort community’s success), and it was so poorly designed,” Milone said. “They struggle. The resorts have to start to fill up to get the village to go, but the resorts aren’t going to fill up if the village isn’t going.”
The village was acquired by California investors for $23.5 million in 2007, and Parker said the hope is that new housetops, a projected increase in business at the hotels and a growing entertainment schedule will spur businesses to return to the village.
Buying into Lake Las Vegas as a community to live in is still an expensive proposition. There are 42 single-family homes for sale at the community ranging from $2.4 million to $245,000. However, 13 are listed at more than $1 million.
The resort community also has a big inventory of condominiums and townhouses, with 56 listed. Two carry the $1 million and up price tag. A four-bedroom house sold in January for $2.5 million, another for $975,000.
Milone said seeing houses going up for sale indicates to him that sellers believe they can recoup some of the value lost during the economic downturn. None of the properties listed is a foreclosure, according to realtor.com, the official website for the National Association of Realtors.
About 2,000 people live at Lake Las Vegas, according to census information gathered by realtor.com.
Raintree and others are poised to add more housing in the coming decades. The firm has received early approvals for 3,800 homes, including some on The Falls. On Tuesday, the City Council approved a zone change on the north shore of the lake to allow William Lyon Homes to build a neighborhood of 53 single-family homes on 17.3 acres previously designated for a resort and casino.
The centerpiece to everything at Lake Las Vegas is the lake itself. When events on and around the lake declined, the health of the lake and its surrounding infrastructure suffered from deferred maintenance and less irrigation.
Dr. Steve Weber, lake manager since 1995, said in September that without the golf course and general irrigation, the lake’s salt levels would increase and the lake itself would not survive.
But the lake’s water quality never came close to being a public health issue, and activities such as paddleboarding, fishing and scuba diving continued without concern, Weber said.
The lake does not have a daily inlet or outlet and is replenished by storm water and a water purchase agreement with Henderson. Nearly 4,500 acre-feet of water must be removed from the lake each year and replaced with fresh water to mimic the cycle flow of natural lakes. Lake Las Vegas purchased nearly 1,705 of the needed acre-feet last year from Henderson, paying the city $783,740, or $1.41 per 1,000 gallons, according to the city.
The overall health of any body of water when it comes to salt content is dependent on water turnover. At Lake Las Vegas, irrigation of landscape and the golf course is important to flowing water out. With the courses and other green areas taking water back out, Weber can see the health of the lake returning “better than it was” before the financial downturn.
“Last year we went back to stocking fish again; we’ve been seeing improvements in everything coming back to life again from where it was,” Weber said. “That’s all you can really ask for.”
Winterton said there has been nearly $2 million in recent investments made in the lake’s infrastructure.
ROAD TO SOMEWHERE
One of the biggest issues that has faced Lake Las Vegas since its earliest development is its connectivity to its namesake valley. Located in Henderson 6.6 miles from the U.S. Highway 95 exit on Lake Mead Parkway, there is only one entrance available to visitors.
That is about to change. Construction began in late January on a $9.7 million project that will extend Galleria Drive from where it ends at Pabco Road five miles towards Lake Las Vegas.
The four-lane road will give Lake Las Vegas residents direct access to U.S. 95, the main areas of Henderson and the Galleria at Sunset mall area, including Costco, Wal-Mart and Sunset Station.
“Galleria (Drive) gives you a straight shot to the shopping and the freeway,” Parker said, “gives you access to all the amenities that are lacking here.”
Looking to the future
Part of Lake Las Vegas turning the corner in public perception could be the recent announcement of two high-profile events that will use parts of the resort community. The military-style endurance event Tough Mudder will be held April 26-27, and the IronMan Silverman recently signed a seven-year contract with the city.
And the lake will be the continued backdrop for several concerts and other events throughout the year.
Harris said working together with Raintree, residents and other businesses is important for the long-term success of everyone involved at Lake Las Vegas.
“We can’t succeed without a healthy lake, Reflection Bay and a green entrance,” Gooding said. “Those are the three biggest obstacles out of our reach.”
Milone said the green returning is a positive first step, but homeowners are still weary.
“The overall feeling for the residents is positive,” said Milone, who moved there in 2008.
“Have things really changed? No. But I see it going in a positive direction and a positive feeling.”
Contact reporter Arnold M. Knightly at email@example.com or 702-477-3882. Follow him on Twitter @KnightlyGrind.