Rhodes bankruptcy shows struggles faced by local homebuilders

The bankruptcy filing late Tuesday by one of the biggest private homebuilders in Southern Nevada underscores the ongoing struggles the recession-wracked housing industry is causing area developers.

The Rhodes Cos. and 31 affiliated companies filed for Chapter 11 bankruptcy so they can restructure their debts. The companies reported between $100 million and $500 million in assets and between $100 million and $500 million in liabilities.

Rhodes, who does business as Rhodes Design and Development, has sold only 27 home sales in Clark County so far this year as of Sunday, down from 86 home sales in the first quarter of last year, according to Home Builders Research.

The number of homebuilders in Clark County also is down. Home Builders Research counted 38 homebuilders at year-end 2008, down from 47 at the end of 2007. The total was 77 a year earlier when the economic slump was starting, according to the research firm.

"Every month, more and more of them are falling by the wayside," said Dennis Smith, president of Home Builders Research.

"We’re waiting for the resale (home) market to come around and see some price stability," Smith said. The number of resale home transactions is increasing, but the sales prices are dropping, he said.

"I think we’ve hit the bottom," Smith said. "It’s going to be a long bottom."

Builders who filed for bankruptcy, "will be back when the market turns," Smith predicted. "I guarantee they will be back."

Rhodes said his company’s Chapter 11 bankruptcy was caused by the recession.

"The economic crisis affecting Las Vegas, along with the inability to secure alternative and cost-effective financing, has hurt homebuilders harder than any other industry, particularly independent companies such as ours," Rhodes said in a statement Wednesday.

Station Casinos said the Rhodes bankruptcy would not affect the future of Durango Station, which is planned for 70 acres bordering the Rhodes Ranch community on Durango Drive south of the Las Vegas Beltway.

"The Rhodes Ranch area is built out, which is a key factor for us developing an entertainment destination," Station Casinos spokeswoman Lori Nelson said.

The locals gaming company bought the land from Rhodes in 2000 for an undisclosed amount. The company said last year it plans to build a 201-room hotel with a casino, meeting space, pool, and a large shopping complex.

The main assets of the Rhodes Cos. include Rhodes Ranch and the Tuscany community in Henderson, according to Rhodes.

The assets were collateral for a $500 million credit line arranged by Credit Suisse in November 2005 and funded by Highland Capital, General Electric Investment Corp., Cypresstree Investment Management, Sorin Capital Management and Credit Suisse.

Rhodes said it filed for bankruptcy because the company was unable to make a Tuesday principal and interest payment to the Credit Suisse loan syndicate.

Credit Suisse also is lead creditor for a syndicated loan to Lake Las Vegas, which filed for Chapter 11 bankruptcy last July. The bank has arranged a series of loans for high-end properties in the West, including the Yellowstone Club in Montana; Promontory in Utah; and Turtle Bay Resort in Hawaii, according to a Bloomberg News story updated on March 5.

A spokesman for Credit Suisse declined comment. A spokesman for Rhodes did not to respond to questions Wednesday about possible layoffs at Rhodes’ companies, and James Rhodes did not return a call for comment.

The bankruptcy case was assigned to Judge Linda Riegle.

Review-Journal writer Arnold Knightly contributed to this report. Contact reporter John G. Edwards at jedwards@ reviewjournal.com or 702-383-0420.

Business
Dig This opens new location In Las Vegas
Remember when you were a kid and played with construction toys in the sand box? Dig This Las Vegas has the same idea, except instead of toy bulldozers, you get to play with the real thing. (Mat Luschek/Review-Journal)
Town Square developer Jim Stuart building again in Las Vegas
Las Vegas’ real estate bubble took developers on a wild ride, something Jim Stuart knows all too well. (Las Vegas Review-Journal)
Salon opens at Veterans Village
T.H.E. Salon, owned by Nicole Christie, celebrated their opening at the Veterans Village with a ribbon cutting ceremony.
Southwest Airlines considering Las Vegas-Hawaii flights
Southwest Airlines CEO Gary Kelly says the airline is "very focused" on Hawaii. Hawaiians have a strong presence in Las Vegas.The city’s unofficial status is “Hawaii’s ninth island.” In 2018, at least 2,958 people from Hawaii moved to Nevada. Of those, 88.7 percent moved into Clark County, according to driver license surrender data. According to the Las Vegas Convention and Visitors Authority, 310,249 people came to Las Vegas from Hawaii in 2018.
Fewer Nevadans are celebrating Valentine's Day
Fewer Nevadans are celebrating Valentine's Day. About 1.2 million Nevadans are expected to celebrate this year, a 5 percent drop from 2018. A growing number of people consider Valentine’s Day over-commercialized. Others weren’t interested in the holiday or had nobody to celebrate with. But spending is expected to rise. Those who do celebrate are buying for more people. The average American is expected to spend about $162 this year for Valentine’s Day, a 57 percent jump from a decade prior. Katherine Cullen, director of industry and consumer insights at NRF
Foreclosures of mansions in Las Vegas
Las Vegas was ground zero for America's foreclosure crisis after the housing bubble burst. (Eli Segall/Las Vegas Review-Journal)
Rick Helfenbein talks about the impact of tariffs on the clothing industry
MAGIC fashion convention showcases men's clothing trends
The MAGIC fashion convention has come to Las Vegas at the Mandalay Bay Convention Center to showcase some of the hottest clothing trends for men. (Nathan Asselin/Las Vegas Review-Journal)
Allegiant Air flight attendants learn how to handle a water landing
Field instructor Ashleigh Markel talks about training prospective flight attendants for Allegiant Air getting live training with a raft for a water landing at the Heritage Park Aquatic Complex in Henderson on Monday. (John Hornberg/Las Vegas Review-Journal)
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery speaks
Smith & Wollensky CEO Michael Feighery speaks about the new Smith & Wollensky restaurant coming to the Grand Canal Shoppes at The Venetian in Las Vegas.
Smith & Wollensky CEO Michael Feighery talks about Las Vegas return
Michael Feighery, CEO of Smith & Wollensky Restaurant Group, discusses the restaurant's upcoming return to the Las Vegas Strip.
Apartments to Come to Hughes Center
Developer Eric Cohen discusses his current building project at the Hughes Center office park in Las Vegas, Thursday, Jan. 31, 2019. Caroline Brehman/Las Vegas Review-Journal
Stratosphere to rebrand to The STRAT
The Stratosphere, a 1,150-foot-tall property in Las Vegas will be renamed The STRAT Hotel, Casino and Skypod.
Local designers’ picks for the Las Vegas Market
The trends that local interior designers are noticing at the Las Vegas Market this year. (Rachel Aston/Las Vegas Review-Journal)
Trends in bath products at Las Vegas Market
Camille Herd, the showroom manager for European Bath Kitchen Tile & Stone, talks about the popularity of free-standing bath tubs. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Kitchen trends at Las Vegas Winter Market
Las Vegas Winter Market displayed kitchen trends that mirror common dining accessories at Strip eateries. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Emerging trends in gifts at Las Vegas Market
Julie Smith Vincenti, curator for the First Look showroom tour on gifts and lifestyle, talks about the emerging trends in those categories for this season. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
Las Vegas house prices are rising
Southern Nevada home prices were up 12 percent year-over-year in November.
Caesars Republic Scottsdale
Caesars Entertainment Corp. is building its first non-gaming hotel in the United States in Scottsdale, Arizona. (Caesars Entertainment Corp.)
Interior designer Mikel Welch talks about trends for Las Vegas Market
Interior designer Mikel Welch, who also is the on-camera designer for TLC’s Trading Spaces, discusses the trends he sees for the 2019 Las Vegas Winter Market. (Rachel Aston/Las Vegas Review-Journal) @rookie__rae
SHOT Show 2019: MEGGITT Virtual Training
MEGGIT showcases its virtual training system at SHOT Show 2019 in Las Vegas.
MGM delivers 700 meals to TSA workers at McCarran
Chefs at Garde Manger at Mandalay Bay provided 700 meals to federal employees who are affected by the government shutdown. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: A "nonsemi-automatic” weapon
Brandon Dunham of Nevada-based Franklin Armory show off the company’s new rifle prototype it calls a “nonsemi-automatic” weapon. The gun does not use a gas system to fire.
Las Vegas-based concrete repair company knows how to beat the heat
ART Concrete Solutions, a Las Vegas concrete-repair firm, addresses the challenges of construction in the extreme heat and sun of Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas based company brings color to concrete in the desert heat
Semco Modern Seamless Surface, a Las Vegas surface engineering company, knows how to put color in concrete construction in the Vegas heat. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Fun photo booth at World of Concrete
World of Concrete show at the Las Vegas Convention Center sponsored by DeWalt gives conventioneers a chance for photos with giant tools. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
SHOT Show 2019: Laserstar Technologies
Laerstar Technologies showed off their laser engraving machines, that can be used to personalize anything from guns and knives, to medical tools and household items. (Mick Akers/Las Vegas Review-Journal)
World of Concrete Show has big equipment on display
World of Concrete Show has big equipment on display at the Las Vegas Convention Center including an impact crusher, concrete pump and a self-erecting portable concrete batch plant. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Shot Show 2019: Kalashnikov USA shows off new products
Jonathan Mossberg of Kalashnikov USA talks about new products on display at Shot Show 2019 in Las Vegas.
ad-high_impact_4
TOP NEWS
News Headlines
Home Front Page Footer Listing