Lake Las Vegas to leave bankruptcy in two months, official says

Lake Las Vegas is on track to emerge from bankruptcy in about two months with
$24 million in hand to reinvest in the Henderson community, a company official said.

Jim Coyne, senior vice president and chief operating officer for Lake Las Vegas Resort, said a federal bankruptcy court recently signed off on the development's 670-page disclosure statement and reorganization plan.

Creditors could vote to approve the plan in late June, clearing Lake Las Vegas to emerge from bankruptcy protection.

"We have turned a major corner," Coyne said.

The announcement came during a Thursday night town hall meeting that drew more than 500 people to a ballroom at what will soon be the development's sole remaining resort, the posh 493-room Loews Lake Las Vegas.

Coyne said the $24 million in financing would be used for road and utility improvements left unfinished during the bankruptcy.

In July 2008, the Atalon Group, which had taken over ownership of the Lake Las Vegas development seven months earlier, filed for Chapter 11 bankruptcy protection with more than $700 million in liabilities.

Since then, two of the development's three 18-hole golf courses have shut down, as has Casino MonteLago, its only gaming establishment.

The 349-room room Ritz-Carlton Lake Las Vegas is set to close its doors on May 2.

Clark County Commissioner Steve Sisolak said he organized Thursday's meeting after hearing a variety of concerns from residents of the 3,600-acre master-planned community.

As victims of the economic downturn go, the folks at Lake Las Vegas don't seem like the most sympathetic bunch.

Sure, many of them have seen their houses lose a third or more of their value. And all the business closures have left the development with few attractions for visitors and entertainment options for residents.

But this isn't some neighborhood of tightly packed single-family starter homes. Lake Las Vegas is one of the valley's most opulent addresses, a lushly landscaped enclave of custom homes, mansions and high-end condos, more than a few of which serve as second or third vacation getaways for their owners.

This is where you'll find a guard-gated community priced for the upper-middle-class, and inside of that another guard-gated community for the truly rich and, in some cases, famous.

That said, homeowners in Lake Las Vegas were hit harder than others were when the housing market collapsed.

From 2008 to 2009, the development saw the eighth largest decline in home values among 56 ZIP codes across Southern Nevada.

According to Las Vegas-based SalesTraq, the average home value in Lake Las Vegas' 89011 ZIP code sagged 31 percent last year from $199,000 to $137,550.

As one woman put it during Thursday's meeting, it's painful to read real estate fliers touting houses in the high $200,000s just down the street while living in what used to be a million-dollar home.

Others complained during the meeting about unsightly brown grass on the empty golf courses, vacation homes turned into party houses by short-term renters, decorative waterfalls that no longer run, and a recent algae outbreak that killed hundreds of fish in the development's signature man-made lake.

One resident said the golf courses are central to the success of the entire community, and he urged the development to do whatever it can to get them back open. "Why would anyone drive 20 miles off the Las Vegas Strip to come out here and do nothing?" the man said. "Because that's what we have out here right now -- nothing."

But Coyne and other officials assured the crowd that things are beginning to turn around for Lake Las Vegas.

Sisolak said the shuttered golf courses and other businesses are worth more open than closed, and he fully expects what is now the Ritz-Carlton to be sold, rebranded and reopened in short order.

In the meantime, he encouraged those in the audience to patronize the resort, restaurants and shops that remain at Lake Las Vegas.

"Those folks are really hurting," he said.

Contact reporter Henry Brean at hbrean @reviewjournal.com or 702-383-0350.