LV housing leader K&B in infill building venture

Steve Green

Monday, Aug. 7, 2000 | 11:42 a.m.

A lack of affordable housing. Rising costs for raw desert land. Initiatives to limit growth within a ring around the Las Vegas Valley.

These three market forces would seem to indicate that infill housing development could work in Las Vegas. And today the city's largest home builder stepped up with plans to do just that.

Kaufman and Broad Home Corp. of Los Angeles said it's teaming with Henry Cisneros, former president of Univision Communications, former mayor of San Antonio and former secretary of the U.S. Housing and Urban Development Department, to develop residential areas in the central zones of Las Vegas and two dozen other cities in Texas, Arizona, Colorado and California.

Called American CityVista, a Cisneros Communities Venture, the partners said they would focus principally on building large distinctive communities in areas where new residential development has not occurred in recent years -- areas like downtown Las Vegas and the older portions of central Las Vegas and North Las Vegas.

"The demand for homes in central neighborhoods, or 'infill housing,' is at an all-time high," said Cisneros. "Nationally, there is great momentum for new development in central cities, and city leaders recognize that large-scale homeownership provides community stability.

"Many Americans want to live closer to work and enjoy a more metropolitan lifestyle. There is also a definite increase in demand for homeownership among minorities and immigrants. These factors have created a tremendous opportunity for American CityVista to build a successful business, because it is based on an ever-growing need," Cisneros said in a statement.

While the companies couldn't immediately say how extensive their operation will be in Las Vegas, the new venture will likely be warmly welcomed here as central Las Vegas and central North Las Vegas have been largely neglected by home builders as developers instead focused on the newer parts of both cities as well as areas like Summerlin in Las Vegas and Green Valley in Henderson.

Las Vegas housing industry analyst Steve Bottfeld, executive vice president of Marketing Solutions, praised Kaufman and Broad's participation in the market. As the No. 1 builder in Las Vegas, it sells about 3,000 new homes annually here.

"Kaufman and Broad has again demonstrated their ability to innovate, which is why they're the leader," Bottfeld said.

Bottfeld said he isn't sure there's a demand for housing in the downtown Las Vegas inner city core. "In Las Vegas there is no inner city core," he said. But Bottfeld said infill housing would work in the Las Vegas area because of the rising costs and political problems in developing the outlying desert areas of the market.

"What they've done is taken a negative and made it a positive," Bottfeld said.

A big plus for the proposal in Las Vegas is the lack of truly affordable housing here, Bottfeld said. He said Las Vegas is on track to sell some 20,500 new homes this year at an average price of $156,000 and another 33,000 existing homes at an average of $130,000.

"There's very little affordable new product in the market. There is a gap in that demand for affordable housing is not being satisfied due to land costs," Bottfeld said.

Bruce Karatz, chairman and chief executive of Kaufman and Broad, said the Las Vegas K&B staff will work with Cisneros's staff to gauge the market and study the interest among local governments in infill development in the Las Vegas area.

"We're the dominant builder in town. Las Vegas is growing so rapidly there is a lot of the city that gets overlooked for further-out development," Karatz said.

While there's a need for affordable housing in Las Vegas and Kaufman and Broad specializes in building moderately priced homes, Karatz said low-priced housing is not the focus of the new initiative.

"It's going to be market rate housing," he said, explaining the developments to be built will be wired for the Internet and new technologies.

Key to the level of development in the targeted cities will be the level of cooperation with local governments on land-use efforts.

"Part of our communications effort ... is to see which cities really are most anxious to get inolved and work with Henry's team to develop within their boundaries," Karatz said.

American CityVista said it will work with Kaufman and Broad to identify sites, plan neighborhoods, acquire and develop land, build homes, and market them as competitively-priced "villages within cities" that are wired for technology and designed to honor local tastes and traditions.

"By building neighborhoods that mirror the face of America, American CityVista will provide new residential options for buyers of all backgrounds and incomes, from immigrants and first time homeowners to empty nesters and hip urban dwellers," the company said.

American CityVista will be jointly capitalized by Kaufman and Broad and Cisneros, and will begin operations in September. Financial details weren't disclosed.

Cisneros will serve as chief executive officer and will have majority ownership of American CityVista. He also will chair its executive board, which will include a representative of Kaufman and Broad and a jointly selected outside director. Kaufman and Broad, which has minority ownership of American CityVista, added Cisneros to its board of directors.