Kyle Canyon Gateway foreclosure slows northwest development

For northwest Las Vegas residents in favor of slowing growth, there is a silver lining in the recession-driven foreclosure of Kyle Canyon Gateway.

Wachovia Bank foreclosed on the 1,712-acre development owned by Focus Property Group and several homebuilders on Sept. 23. The land is located off U.S. Highway 95 near Highway 57, the turnoff to Mount Charleston and the Spring Mountain National Recreation area.

Focus and its partners purchased the land for $150 million at a Bureau of Land Management auction in 2005. Wachovia filed a lawsuit against the developers in October seeking payment for defaulted loans.

The Kyle Canyon Gateway plans called for thousands of homes, three schools, parks, commercial development and a hotel and casino. With Wachovia Bank taking over, what will happen to the land and the project — especially in the ever-worsening economy — is anyone's guess.

In September of 2007, a grass-roots neighborhood organization called Northwest Residents for Responsible Growth rallied against the project and specifically the casino plans, which were approved by the Las Vegas City Council later that month.

One of the organizers of the group, Lisa Mayo-Deriso, said she sympathizes with Focus, but that the development isn't appropriate for the area.

"I feel sorry for any company that goes bankrupt or loses property. It's difficult for everybody involved," she said. "On the other side of it, that was a big property — 1,200 acres and 26,000 homes. I was very vocal against the casino site because I think it wasn't appropriate. So, on the positive side, I think it slows growth up a little here in the northwest, and that's a good thing."

It is not known what Wachovia plans to do with the land at this point. Focus Property Group officials declined to comment on the foreclosure.

Officials from Wachovia and Winchester Carlisle Real Estate Partners attended the Dec. 3 City Council meeting, where the council approved a required review of the development agreement between the city and the previous owners, Kyle Acquisition Group LLC. Wachovia has hired Winchester Carlisle, a real estate management and consulting company, as its local agent and representative.

"The bank is in the initial stages of evaluating what it is they now own," Brian Walsh, vice president of development for Winchester Carlisle, said. "We are just starting to get our hands on (plans). I hate to say it's our discovery or due diligence stage, but they've only owned it for two months, and they're just looking at what they have from a planning standpoint."

Walsh said it's far too early to make a determination as to what comes next.

"It's not up for sale or for development. It's all in the evaluation stage, as any new owner would put it," he said. "They didn't plan on owning it, but now they're just looking at what it is they own."

Without Kyle Canyon Gateway leading another area housing boom, many valley residents are wondering what the impact will be on area projects like the Streets of Montecito mall and the proposed Sheep Mountain Parkway.

"It doesn't mean the project is done forever," Mayo-Deriso said. "A lot of people are saying, 'Great, now the Sheep Mountain Parkway won't happen.' I'm hoping it won't happen, too. Then we won't have a huge highway cutting through that land. But I think this (foreclosure) really gives us all a chance to come back and ... see how we are going to grow, how we are going to look. Does it make sense to have a town across the freeway from a national conservation area? Does it make sense to nest this project in between these things? Maybe it has to be something different. Maybe it can be something a little more creative."

Mayo-Deriso said the slowdown could allow the local economy to recover before another expansion takes place, but if similar development plans return for the Kyle Canyon site, she'll be around to voice her opposition.

"Does this mean a casino is not going in? Hopefully not," she said. "Hopefully, we'll all be involved in the process when it comes back around. Everybody feels bad. Not one person I talked to didn't feel bad for Focus, but it gives us the opportunity not to have that growth in the area. But we'll have to wait and see what it looks like five years down the road, wait and see what the economy looks like.

"To just put another casino there, I would hope the community has learned by now not to put all the eggs in one basket. We need to diversify."

Contact Centennial View reporter Brock Radke at bradke@viewnews.com or 383-4629.