ManhattanWest latest casualty of crisis

ManhattanWest had two "savior groups" that wanted to rescue the mixed-use condo project in the southwestern Las Vegas Valley, but the developer refused to talk with them and went into hiding, one of the project's lienholders said.

More than $30 million in liens have been filed against ManhattanWest, which halted construction in December. Developer Alex Edelstein said the project is a casualty of the financial crisis and that he's looking for a group of investors to finish the project.

"Alex won't call them back, won't take their calls and can't be found," said Jeff Glass of Hydro Pressure Cleaning, whose company is owed about $500,000 for seismic repair on concrete columns.

Edelstein, chief executive officer of Gemstone Development, said he's been on vacation for the last month. He said he'd be happy to engage in discussions with "bona fide" investors who bring real offers to the table, but hasn't seen one yet.

"I talk to groups all the time, but so far it's all hat and no cattle," Edelstein said. "They tend to want me to produce masses of material for them but are reluctant to verify any of their bonafides."

The only assets trading hands right now are doing so at the most distressed of possible prices, and bankers aren't willing to write down ManhattanWest to that level, he said.

"They, like me, think it will be worth much more than the market is valuing it at," he said.

Joe DeAngelo, former project engineer for ManhattanWest, said Edelstein is brilliant with computers, having built his wealth during the technology boom in California, but knows nothing about construction.

The problems at ManhattanWest had become quite severe when DeAngelo was hired in August, he said. Gemstone had replaced its original general contractor, Apco Construction, with Camco Pacific.

DeAngelo said he walked the property to investigate some 58 building-code violations that had not been resolved over 18 months. He immediately saw structural concrete that was faulty and a fire safety system that was inadequate.

The entire system had to be ripped out and replaced, said Lance Griffith, vice president of E&E Fire Protection in Las Vegas. It had been installed by an unlicensed subcontractor and did not meet code requirements.

Griffith said Edelstein knew he would be shutting down the job and got six to seven months of extra work out of contractors. E&E is owed about $3 million, he said.

"It's a big legal battle right now because you've got Camco and all their lawyers involved," he said.

Edelstein should have had an accountant on site to perform a complete audit when he switched to Camco Pacific, DeAngelo said.

"I started seeing numbers on line items ... where did this number come from? You paid $500,000 through a third-party construction service. Where did it go? My guys (subcontractors) didn't get paid," DeAngelo said.

Glass said Edelstein had a great idea with ManhattanWest, a $350 million development that would include 700 condo units, restaurants, offices and shops on a 20-acre site near Las Vegas Beltway and Russell Road.

"It's like a hidden jewel," he said. "It's not on the Strip."

Gemstone topped off the nine-story Element House at ManhattanWest in August. The mid-rise residential buildings are about 80 percent finished. Economic events created an extremely difficult environment for real estate development, Edelstein said when he stopped construction.

ManhattanWest is the latest condo project to go belly-up in Las Vegas. Last year, Mira Villa condos and Vantage Lofts stopped construction and went into bankruptcy. Sullivan Square had barely begun excavation before the project was canceled. Spanish View Towers was the first high-rise project to stop construction after partially building an underground parking garage.

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