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August 20, 2014

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DEVELOPMENT:

Builder sees green light in red-flag economy

Seeking gaming OK, he says outlying city is coming along

Image

Steve Marcus / FILE

Harvey Whittemore, the lobbyist and businessman behind Coyote Springs, looks out in 2006 over a portion of the 43,000 acres he purchased for $15 million.

BY THE NUMBERS

43,000 acres -- Total land purchased for Coyote Springs project

$15 million -- Price paid to Aerojet-General Corp. for the land

Beyond the Sun

Harvey Whittemore has boasted that his Coyote Springs project, 55 miles northeast of Las Vegas, won’t be just another Southern Nevada housing development. Rather, it will be a master-planned city unlike anything in the state.

Yet like most Nevada communities, it will have at least one casino.

Whittemore, a powerful lobbyist and businessman, is seeking county approval for a 330-room gaming resort.

One was always planned, he said Wednesday. Now that nearly all of the 43,000-acre development’s water system is in place, and 60 percent of its sewer treatment plant is completed, it’s time to bring this piece of the development to the county, he said.

“It’s just about timing,” he said. “We couldn’t present a specific gaming enterprise district until we had other facilities in place.”

The project requires a change in zoning for 125 acres, from rural and commercial to zoning more appropriate for a gaming hotel. The Clark County Zoning Committee postponed a vote Wednesday because Commissioner Tom Collins, who represents the area, was not present.

Whittemore predicted that when the proposal comes back in two weeks, it will pass. “I think our plans will be well received by the board,” he said.

Considered a long shot in good economic times by some developers because of its distance from Las Vegas and existing infrastructure, Coyote Springs faces more doubt about its fate because of the region’s deep housing slump.

But Whittemore said the development, with 159,000 housing units approved, is still moving forward. He noted how far the development has come since its announcement in 1998.

“People said we wouldn’t have a golf course in 20 years,” he said. “I said we’d have one in 10 years.”

The course was finished in 2007.

Asked whether the bad economy has caused Coyote Springs some troubles, Whittemore smiled.

“Well, let’s talk about all the good news,” he said.

The Coyote Springs golf course has been called one of the best new courses in the country, he said, with three golf publications this month ranking it in their top 10.

He attributed delays in construction more to time-consuming work than economics.

“So the news is, despite what is happening in the valley, a lot of working is going on at Coyote Springs,” Whittemore said.

Whittemore said construction will begin in late 2009 or early 2010, roughly 18 months later than initially predicted.

“Obviously, the date can be changed depending upon general economic conditions, but the delays which have been taking place so far really relate to the fact that what we’re doing is developing a new city. And it’s the first of its kind in Nevada — it’s an entirely master-planned city.

“This is not an extension of a subdivision map ... this is a city being built from the ground up,” he said. “The point is, we anticipated this would be a very long process and it’s not one of those things you simply say, ‘We’re going to do X’ and decide to do it. You really have to dot the i’s and cross the t’s to get things done.”

Other master-planned developments aren’t faring well in this economy. Last month, Wachovia Bank foreclosed on the 1,710-acre Kyle Canyon Gateway project, which was approved for more than 16,000 houses.

Yet analysts noted a major difference between Whittemore’s 43,000 acres and the Kyle Canyon acreage: Whittemore and a partner purchased their land from Aerojet-General Corp. for a relatively paltry $15 million, while Focus Property Group and eight homebuilders purchased their 1,710 acres for $510 million at a Bureau of Land Management auction.

Whittemore got 25 times the land at 1/34th the price.

“I’m not suggesting that major master plans won’t continue to face delays, but that lower ... overall investment in the land at a time when there is little development activity gives the project some level of staying power,” said Brian Gordon, a principal in Applied Analysis, a firm that does economic analytical work for government and private interests.

Coyote Springs is a client of Applied Analysis.

John Restrepo, principal of Restrepo Consulting Group, which has also done work for Coyote Springs, also noted a long-term advantage for Coyote Springs is that land remains limited in the Las Vegas Valley.

“Long term, Las Vegas has a bright future,” he said. “We won’t see the hyper-growth that we did in the past, but a restriction on developable land in the valley means that demand for housing will go up again and those kind of satellite communities will likely come back into vogue.”

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