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 Videos
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Sam's Town employees and customers talk of their love for the iconic casino
Longtime Sam's Town employees and customers love each other and love their casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Las Vegas apartments rents
Las Vegas’ apartment market has accelerated in recent years. Developers are packing the suburbs with projects, landlords are on a buying spree, and tenants have filled buildings.
William Boyd talks about the birth of Sam's Town
On the eve of the 40th anniversary of Sam's Town, William Boyd, executive chairman of Boyd Gaming and son of hotel namesake Sam Boyd, talks about how the casino became one of the first local properties in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
High Roller observation wheel turns five
The world’s tallest observation wheel celebrates it’s fifth year on Sunday, March 31, 2019. (Michael Quine/Las Vegas Review-Journal) @Vegas88s
Escape Room Industry Growing In Las Vegas
Escapology employees discuss the growing escape room industry in the U.S. and Las Vegas. (Bailey Schulz/Las Vegas Review-Journal)
Impact of parking fees on visiting the Las Vegas Strip
There are no data showing a relationship between Strip resort and parking fees and the number of out-of-state visitors to Las Vegas. But there are data showing a relationship between Strip parking fees and the number of local visitors to the the Strip. ‘’As a local, I find myself picking hotels I visit for dinner or entertainment, based on whether they charge for parking or not,”’ said David Perisset, the owner of Exotics Racing. ‘’It is not a matter of money, more of principle.’’ A 2018 survey by the Las Vegas Global Economic Alliance found 36.9 percent of Clark County residents reported avoiding parking at Strip casinos that charge for parking. 29.1 percent reported avoiding using any services from a Strip casino that charges for parking.
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Faraday puts Las Vegas land on the market
Nearly two years after Faraday Future bailed on its North Las Vegas auto factory, the company has put its land up for sale. (Michael Quine/Las Vegas Review-Journal)
El Cortez owner Kenny Epstein on running the iconic property
Kenny Epstein, owner of the El Cortez Hotel in downtown Las Vegas, talks about Jackie Gaughan mentorship and answers rumors about bodies in the basement at the mob-era casino. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
LVCVA recommends construction of underground people mover
The Las Vegas Convention and Visitors Authority announced the recommendation for an underground people mover for the convention center. The system would have the potential to expand and connect Downtown and the resort corridor all the way to McCarran. (Michael Quine/ Las Vegas Review-Journal)
LVCVA/Boring Company Press Conference
The Las Vegas Convention and Visitors Authority announced a collaboration with Elon Musk's The Boring Company to develop and operate an autonomous people mover system for the Las Vegas Convention Center District.
International Pizza Expo includes green and gluten free
The International Pizza Expo at Las Vegas Convention Center included companies focused on vegan and gluten free, and plant-based pizza boxes. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
International Pizza Expo kicks off in Las Vegas
The first day of the International Pizza Expo at Las Vegas Convention Center is everything Pizza. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
T-Mobile program aids guests with sensory needs
A program at T-Mobile Arena is designed to provide a more sensory friendly experience for guests.
Photo Booth Expo
Danielle May talks about how Simple Booth transformed her Volkswagen bus into a business.
Nevada Gaming Commission's highest fines
The highest fines assessed by the Nevada Gaming Commission, according to commission Chairman Tony Alamo: 1) Wynn Resorts Ltd., $20 million, 2019 2) CG Technology (then known as Cantor G&W Holdings), $5.5 million, 2014 3) The Mirage, $5 million ($3 million fine, $2 million compensatory payment), 2003 4) Stardust, $3 million, 1985 5) Santa Fe Station, $2.2 million ($1.5 million fine, $700,000 compensatory payment), 2005 6) Las Vegas Sands, $2 million, 2016 7) CG Technology, $1.75 million, 2018 8) CG Technology, $1.5 million (also $25,000 in escrow for underpaid patrons), 2016 9) Caesars Entertainment, $1.5 million, 2015 10) Imperial Palace, $1.5 million, 1989 11) Peppermill Casinos, $1 million, 2014
Tiny Pipe Home vs Shipping Crate
A Tiny pipe home was displayed at the International Builders Show this week in Las Vegas.
Auto repair shortage affects Las Vegas
The auto repair industry is facing a national shortage of workers.
Franchising industry booming
Experts say Las Vegas is a hotbed for the franchise industry.
TOP NEWS
Home Front Page Footer Listing