Construction crews were dismantling wood and metal framing Friday for the $50 million Mercer condo project on Tropicana Avenue west of the Las Vegas Beltway.
The 113-unit project, a joint venture between Chicago-based JDL Development and Modern Living Holdings of Las Vegas, had halted construction in November, a casualty of the faltering Las Vegas real estate market.
Bundles of lumber are still sitting on the 5-acre site and the completed concrete podium deck and underground parking remains in place.
“They’re getting rid of much of the hazard on the property before they sell it,” said Tom McKinley, managing member of Vanguard Construction, former general contractor. “That’s the gut feeling I get.”
Vanguard is in litigation with the developer and tried to halt the foreclosure process on the project, McKinley said.
The Mercer is among many condo projects in Las Vegas that have been delayed, suspended or canceled, including Spanish View Towers, Spa Lofts, Vantage Lofts, Paxton Walk and Sullivan Square.
But it’s the first to be taken down.
“It wouldn’t surprise me if we see some more of it, as long as this takes to shake out,” local housing analyst Dennis Smith of Home Builders Research said. “A lot of projects are just sitting there, closed down. Pick anything vertical. You could even say that about projects with lot improvements that aren’t conducive to the type of market that exists today.”
JDL President Jim Letchinger had said the Mercer was 60 percent sold and fully financed by First American Bank in Chicago. Units were priced from $275,000 to more than $700,000.
He said he was “proceeding cautiously” with construction of the project, originally scheduled for completion in summer 2008, when the market started to slow.
“The real estate market doesn’t correct itself in little steps,” Letchinger told the Review Journal in a 2007 interview. “It has to take one huge hit and then it starts to recover. It’s all driven by the capital markets. When capital markets wake up with too much product and too many loans, they shut the faucet off. That might be the wrong time.”
He did not return phone calls for comment.
Smith said nobody has a grasp on real estate values in today’s market.
“What’s the land worth? What’s the vertical construction worth? It may be cheaper to tear it down and replace it later,” he said.
Contact reporter Hubble Smith at firstname.lastname@example.org or 702-383-0491.