Slum gets a second chance

Tuesday, Dec. 4, 2007 | 7:14 a.m.

A long dispute over who owns a neglected, empty downtown Las Vegas housing complex is over and the city lost - or maybe won, depending on your point of view.

Two years ago Las Vegas took over Monterey Villas, a virtual rat's nest of sewage, garbage and crime, when Metro Police and health inspectors closed it.

But how the city acquired it so infuriated low-income-housing developer Walter A. Walters, who had been close to buying the complex, that he filed a breach of contract lawsuit in District Court against the property owner and the city.

On Wednesday the city is expected to settle the suit with Walters, allowing him to purchase the property for about the same price the city paid, $5.2 million.

"They made things right," said Las Vegas attorney Matt Dushoff, who represents Walters. "We appreciate everything the city has done to do that."

In settling the case, the city admitted no wrongdoing, City Attorney Brad Jerbic said.

"He pays us $5.2 million in the form of a promissory note, the property immediately goes back on the tax rolls, he takes over the security and, on his dime, he's going to rehab the entire complex," Jerbic said.

Monterey Villas' outside belies what's inside. From Tam Drive, about a quarter-mile southwest of the Stratosphere, where the 80-unit complex stretches over several blocks, its brown and tan stucco is mostly in place, few windows are broken and the iron gates leading to courtyards are painted an unchipped aquamarine.

Inside the complex, however, is what forced its closure a few years ago. In June 2005, police and city officials found units with no electricity, severe plumbing problems, raw sewage, holes in floors and walls, and water damage.

When the city purchased the complex, city officials wanted to create affordable housing managed by a private company.

Walters, however, filed a lawsuit in May 2006 against Monterey Villas LLC, arguing it had broken a contract to sell him the property for $4.2 million. The deal with Walters was in escrow, his lawsuit contended, when a manager for Monterey Villas first offered him $200,000, then $500,000 and the chance to buy another property, if he terminated his contract.

Shortly afterward, the city stepped in and bought the complex. The city said it wanted to offer apartments with rents ranging from $540 to $840 per month in a complex where rents had ranged from $475 to $775 per month.

In his settlement, Walters agreed to drop any claims against the city, pay off the $5.2 million within five years and begin renovations within 30 days of receipt of the property's deed.

The agreement also stipulates that Walters is to target affordable housing for people 55-plus, with rents ranging from $550 to $750 per month.

If Walters follows through, it won't be the first time someone attempted to refurbish the complex.

In 1998 Monterey Villas was considered something of a haven in the middle of a crime-riddled area when it was rehabbed by a group called Apache Enterprises, which described the complex as "uninhabitable" when it took over the property.

Seven years later that same characterization was used to describe Monterey Villas as city officials moved in first to close it, then to buy it.