Downtown Henderson development back on track after bankruptcy

A big project in downtown Henderson that stalled and went bankrupt is now poised to be completed this year, after the developers landed nearly $28 million in new funding.

The Watermark, a seven-story complex on Water Street, is scheduled to be finished by the end of May, said Tom Wucherer, a partner with project developer Strada Development Group.

Plans call for 151 apartments and more than 30,000 square feet of commercial space in the $65 million project, located across from the America First Center ice rink.

Henderson’s once-sleepy downtown corridor has seen waves of construction, new eateries and more foot traffic in recent years, with the Watermark standing out as an especially big bet on the area.

“When you look at our project, it absolutely fits in with the future of Water Street,” Wucherer said.

But the building faced an uncertain future last year amid halted construction, lawsuits and bankruptcy proceedings.

‘Vital project for Henderson’

Gillett Construction, the lead contractor, provided a draft news release this week that said construction is “officially moving forward” at the Watermark after the necessary funds were secured.

The developers recently closed on a $27.9 million loan to finance the Watermark’s completion, according to filings in U.S. Bankruptcy Court in Las Vegas.

A newly appointed owner’s representative also has joined the project at 215 S. Water St. to “provide an additional layer of oversight and ensure all project timelines are met,” according to the release.

Construction is expected to be completed in late spring to early summer, it noted.

“The Watermark is a vital project for Henderson, and we are thrilled to see it moving forward again,” Gillett owner Darren Gillett said.

Wucherer’s group acquired the 1.2-acre project site from the city of Henderson’s Redevelopment Agency in 2020 and broke ground in 2021.

But construction on the Watermark stopped around late 2023, Wucherer said in an interview.

Like other projects at the time, it faced cost increases and supply-chain shortages, according to Wucherer, who said its overall costs rose by more than 20 percent.

Court cases

The project also faced litigation.

In early 2024, Gillett Construction sued the developers in District Court, alleging it was owed more than $11 million for its work on the project.

According to the complaint, Gillett started working on the site by summer 2021, but the developers stopped making their payments to the contractor in spring 2023.

New York lender Acres Capital Corp., which had announced that it teamed with another firm to issue a $37.5 million construction loan for the Watermark, also sued.

Acres, through an affiliate, sued the developers in spring 2024 in Clark County District Court. It alleged the developers had defaulted on their loan, and the firm sought the immediate appointment of a receiver to take charge of the property.

Gillett filed a notice of foreclosure in court in late May. A week later, the Watermark’s developers pushed the project into Chapter 11 bankruptcy, giving them protection from creditors.

‘A great way to start’

The bankruptcy filing stated that construction had stalled because of a “series of issues and disputes” with the contractor, including delays in securing permits and disputed change orders.

In December, however, the developers filed court papers showing plans to obtain new financing from Acres, saying the funds would let them finish the project.

They closed escrow on the loan on Feb. 14, according to a filing in the bankruptcy case.

Acres did not respond to requests for comment.

When the firm announced its loan for the project more than three years ago, Acres President and CEO Mark Fogel said “now is the ideal time” to create a mixed-use project that fills the big demand for rental units.

Wucherer said there was some minor vandalism at the Watermark after construction stopped, including a few broken windows and some graffiti.

He also said that Water Street is a great little entertainment district and pointed to the changes in the area.

If you want to keep businesses vibrant in the corridor, Wucherer added, having 151 new apartments nearby “is a great way to start.”

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342.