Bank stops payments on NLV Housing Authority project

Friday, Sept. 17, 2004 | 10:49 a.m.

The bank financing a North Las Vegas Housing Authority project of 123 low-cost homes has stopped payments since April, causing the authority to seek other backers, Don England, executive director, said.

The deadline for new proposals was today, England said. Eight to 10 banks have asked for information about the project in recent weeks, he said.

The official said Nevada State Bank stopped making payments on the Desert Mesa subdivision in April "because of increases in costs and delays." The bank said it would have to do a new appraisal of the project, which was supposed to cost $15 million but may wind up costing about $19 million.

The new appraisal, which has been completed, may prompt the bank to seek a change in the terms of the loan.

"But we wanted to see if there was other interest out there," England said.

Meanwhile, the project, at Carey Avenue and Commerce Street, has had to change subcontractors and may wind up three to six months behind its scheduled May 2005 deadline, England said.

Potential tenants have shown interest in 52 houses, which are expected to wind up costing between $135,000 and $150,000 each. Of those, 14 are nearly completed, England said.

Problems plaguing the project have included firing the former subcontractor, American General Engineering, because of issues with its performance, England said. The company disputes the allegations and has filed a lawsuit against the authority.

The new subcontractor, Rock and Roll, has been working on the project since late June.

"They're rocking and rolling even though they're not getting paid," England said.

The official said he was "confident (the project) will succeed."

"I have no doubt," he said. "We just have to get over this hump with the money."