Condo developers seek bankruptcy protection

Las Vegas-based Westmark Homes, doing business as HDB LLC, has filed for bankruptcy protection on its 134-unit Mira Villa mid-rise luxury condominium project in the master-planned Summerlin community, near the JW Marriott.

It's the latest in a number of financially distressed Las Vegas condo projects that have canceled or suspended sales or have been taken over by creditors.

Randa Bishop, who placed $25,000 in escrow for a $740,000 unit at Mira Villa, said she received a notice from the bank about a bankruptcy meeting of creditors scheduled for March 3. The bankruptcy was filed Jan. 29 by HDB.

Bishop reserved her two-bedroom, 2,200-square-foot unit at Mira Villa in February 2004 and was expecting it to be finished within nine months to a year.

"I'm being penalized," she said. "We're all being penalized. I'm an investor. I wanted to rent the unit."

Calls to Westmark Homes founder Mark Oiness and attorney Mark Ferrario of the Kummer Kaempfer Bonner law firm were not returned. The voice mailbox for Mira Villa's sales office was full and could not take any more messages.

After trying unsuccessfully to contact someone at Westmark by telephone, Bishop said she drove to the company's office at 4350 S. Arville St. and was met by a security guard who told her to call Colonial Bank. The bank told her to call Westmark.

"I got your typical Las Vegas mouthpiece on the phone," she said.

Mira Villa is planned for 134 units of two to four bedrooms up to 4,000 square feet. Amenities would include an enclosed garage, private elevator and community recreation center with a pool, fitness center and card room. Prices start from the low $900,000s, according to Westmark's Web site.

Larry Murphy of SalesTraq, a housing research firm, said Mira Villa units started at $450,000 in November 2003 when he first listed them in his brochures.

"I think that's why people are being patient is because they perceive they have several hundred thousand dollars in equity," he said.

Las Vegas has seen a number of luxury condo projects preselling and taking deposits without ever starting construction. New projects that started construction are running into problems, including Mira Villa and Cosmopolitan, Murphy said. Spanish View Towers halted construction and is now mired in litigation.

"We're seeing more and more auctions. I think it's just a sign of the troubled times we're in," Murphy said.

Terrin Griffiths, an economist and industry analyst for California Credit Union League, said part of the problem with condo projects in Las Vegas is that they're being built during a time of elevated inventory of homes for sale.

"There's nowhere for this added inventory to go," she said.

With the fallout from subprime mortgages, luxury condo buyers just aren't there and prospective buyers can't get financing, Griffiths said.

Westmark is also building Coronado courtyard condominium village in Summerlin and Terra Bella gated active adult condo community in Sun City Anthem. The company's Web site is advertising Montechiaro, Summerlin's newest active adult condo community "coming soon."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or (702) 383-0491.