LV economy helps profit of Summerlin developer

Wednesday, Aug. 1, 2001 | 11:09 a.m.

The Howard Hughes Corp.'s record-setting pace of land and home sales in Summerlin -- aided by the strong Las Vegas economy -- boosted the Rouse Co.'s otherwise sagging second quarter earnings, the company reported Tuesday.

The national economic slowdown has raised concerns about a slowdown in Las Vegas and has boosted Nevada's unemployment rate to equal the national average of 4.5 percent. But Las Vegas-area employment is up a strong 5 percent from last year.

Rouse, Columbia, Md., parent company of the Howard Hughes Corp., reported earnings of $25.9 million, 33 cents a share, on revenues of $269.8 million for the quarter ended June 30. That compares with earnings of $33.8 million, 44 cents a share, on revenues of $260.2 million for the same period a year earlier.

Revenues and earnings were down for the company's portfolio of office and industrial properties. The company expected the downturn after transferring 37 buildings in Las Vegas' Hughes Cheyenne Center and Hughes Airport Center to a joint venture with Stoltz Bros. Ltd., Wilmington, Del. The $85 million cash transaction reduced Rouse's ownership from 100 percent to less than 10 percent.

But the Howard Hughes Corp.'s Summerlin home and land sales bolstered the company's development land sales division earnings.

Kristi Overgaard, director of marketing for Howard Hughes, said the company has reported 2,132 home sales in Summerlin's 53 active neighborhoods in 2001. That's 14 percent ahead of the 1,877 sold in the same period a year ago when the company had 62 active neighborhoods selling homes.

Overgaard said the company sold 3,173 homes in all of 2000.

Land sales for both residential and commercial development in Summerlin also were up, said David Tripp, a spokesman for Rouse.

For the second quarter, the company had $56.5 million in land sales compared with $24.2 million for the same period a year ago. For the first six months of 2001, sales were $96.3 million, compared with $62.1 million for the year-ago period, Tripp said.

"The company's high-quality portfolio of operating properties is on target to meet its annual objectives," said Anthony Deering, chairman and chief executive officer of Rouse. "Land sales operations in Columbia and Las Vegas should produce another year of record results."

Rouse, through the Howard Hughes Corp., is in the midst of a $300 million expansion at the 840,000-square-foot Fashion Show mall on the Las Vegas Strip. The mall will more than double in size by 2003 and three new anchor stores -- Lord & Taylor, Bloomingdale's Home and Nordstrom -- will move in.

A new mall in Summerlin is planned for 2005.

The company also has hired Merrill Lynch & Co. to seek buyers for the 115-acre Hughes Center office, restaurant and residential complex in midtown Las Vegas.