Housing project wins funds

Las Vegas leaders gave their blessing -- and public funds -- to a developer and former city councilman who wants to build low-cost senior housing on what's now a large vacant lot near the intersection of Decatur Boulevard and Vegas Drive.

Overall, public funds will cover 89 percent of what's being called the Residences at Village Square, which plans show will consist of 416 senior apartments, 65,000 square feet of commercial space and a fire station.

It's being spearheaded by Michael McDonald, which raised the level of scrutiny because of his former position with the city and investigations that made his tenure stormy.

"I have said in the past, only an idiot wouldn't look carefully at this because of your relationship with the council when you were on the council," Mayor Oscar Goodman said. "I'm proud of the fact that the city is going forward with a project of this nature.

"No apologies here. This is a great project. It's long overdue."

McDonald singled out Goodman and Councilman Ricki Barlow, crediting them with keeping the project's approval moving along.

"This was not easy to do, especially if I'm the one bringing it," McDonald said. "That's why the mayor and staff made this the hardest (development agreement) ever written. We had to go through more hoops and more walls."

On Wednesday, the Las Vegas City Council approved allocating $26.8 million from various funds targeted at developing affordable housing. The project is also in line to receive $33.7 million from the Nevada Housing Division.

McDonald's company, Alpha Omega Strategies, is buying the 13.3 city-owned acres for $6.5 million, which is about $3 million less than its appraised value and $2 million less than what it cost the city to acquire.

About half the purchase price will be used to build a fire station on the property.

The company also is investing $7.2 million of what's known as a "developer's fee," money provided by the state to companies that build affordable housing. McDonald has partnered with Bruce and William Bayne of Peccole Nevada, which has built several high-end residential projects in Southern Nevada.

The property has been considered a blight for years.

During his tenure on the council, McDonald said he looked for people to take the land for free and build senior housing on it.

"We had nobody," he said.

Barlow related similar experiences as a council staff member before he was appointed to his seat.

"On numerous occasions we have attempted to do something with this site, and there was no one interested," Barlow said.

The property is to be developed in phases, with the first phase scheduled to start by the middle of next year. The deal is structured so that the city doesn't sell the land until construction is ready to begin. If the project doesn't start, the city keeps the land, and none of the money allocated for the project is spent.

McDonald was one of the people investigated in the scandals involving two local strip club owners, Michael Galardi and Rick Rizzolo. Several elected officials were convicted of taking bribes from Galardi, and Rizzolo pleaded guilty to tax evasion.

McDonald was not indicted, but the taint of the investigation contributed to his losing his re-election bid in 2003. A grand jury convened last year to look into McDonald's taxes.

McDonald and Bayne said they wouldn't make much money off the project -- about $300,000 a year in the best of circumstances, which Goodman said was about a 1.5 percent return.

"I don't understand why you're going into the project," he told Bayne.

McDonald said he's long wanted to do something with the vacant acreage, which is in the neighborhood where he grew up. It also once was home to a store named Wonder World, where he used to work.

"There's never been $75 million brought into this area, ever," McDonald said. "So to say this is a shot in the arm is true."

If the project works, the developers plan to look at forming a nonprofit corporation to build more low-cost senior housing. It's estimated that more than 40,000 senior citizens in the area spend more than half their income on housing or live in substandard housing.

"This is one of many to come, hopefully," McDonald said.

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.