Unlikely confidence: Developer sticking with Henderson tower plan

By Mike Trask

Monday, Dec. 22, 2008 | 2 a.m.

The adage in the real estate and development business is location, location, location.

But here may be a case of timing, timing, timing.

A medium-size developer, hoping to stare down the recession, is ambitiously designing a high-rise residential, hotel and office park with a nearly $1 billion price tag.

He wants to build his Park Heights towers at the northwest corner of Stephanie Street and Wigwam Parkway, just off Interstate 215 in Henderson.

To be reminded of the enormous risk of his undertaking, all that Kenneth Smith need do is look cater-corner, where a proposed urban village has petered out with nothing more to show for it than one unoccupied building and a gaping hole in the ground.

But Smith will not allow himself to be depressed by the scene of a failed economic gamble. He’s no pessimist.

Smith, principal of GSG Development, calls this intersection the best infill location he’s ever seen, situated between a freeway and a thriving retail corridor at Stephanie and Sunset Road.

And by the time he’s done designing his project, he hopes the credit market will have relaxed enough to provide the necessary financing — and that by the time construction is done, Southern Nevada will be back on track and tenants will want to be in his buildings, with expansive views across the Las Vegas Valley.

Timing, timing, timing.

The corner of Stephanie and Wigwam might someday serve as a kind of time capsule for the economic waves crashing over the region, the intersection of optimism and pessimism.

A few years ago, each corner was undeveloped.

One remains empty.

On another, a medical office building has gone up and is partly occupied.

The third corner is the partly excavated site of an unfinished effort — a $200 million project known by two names — 17th and Vine, and Stephanie Village. It promised 466 condo units, two restaurants and 58,000 square feet of retail space. On the edge of the property, a sales center teased the condo models.

The development was supposed to open in 2005 but was delayed, and delayed again, before being suspended. The building permits have expired and the 22-acre site is for sale.

The developer, Dan Shaw, co-founder of Las Vegas-based Realty Management and chairman of the Henderson Planning Commission, did not return repeated phone calls.

Smith said he has been approached about selling the land, but he is not interested.

It’s on the fourth corner where Smith envisions his Park Heights. The lending market may be snare-drum tight but he says he has interested lenders, even if no commitments.

Timing, timing, timing.

“I’m a big believer in the health of this valley, and we have two years’ worth of work before we start construction,” he said. “We have two years to work on it (getting money). I hope the valley has turned around by then. If not ...” and his voice trails off.

Smith is nothing if not ambitious. He wanted his main tower to be 330 feet tall — 30 stories, the tallest in Henderson, eclipsing Sunset Station’s hotel tower by 100 feet. The Planning Commission told him to keep it to 250 feet. He appealed to the City Council and won. He’ll get his 330 feet.

“I think this project needs to work however it works best,” Mayor James Gibson said. “I don’t see a problem.”

The project, estimated to cost $900 million, will also include a 13-story condominium tower, a 12-story hotel and accompanying retail outlets and office space. It would be connected to a planned 110-acre city park that would surround a 20-acre man-made lake on the site of a former gravel pit.

“It’s ironic this piece of land was an old gravel pit that was raped and pillaged for years and from that will come one of the most iconic buildings in Henderson,” Councilman Jack Clark said.

This is the most ambitious undertaking yet for Smith’s GSG Development, whose portfolio includes several high-end office complexes in the valley, including The Park at Spanish Ridge.

The company also pushed the $800 million Sullivan Square at Sunset Road and Durango Drive. Construction on that project stopped after funding problems, and GSG filed suit against an Irish lending company alleging breach of fiduciary duty. Most of the claims were later dismissed. Smith called it an “unfortunate situation.”

He has higher hopes for the new project, billing it as a prime example of true mixed-use development benefiting from an environmentally friendly design.

“Sometime soon we are going to run out of land and the people are going to keep coming,” Smith said. “Some will buy homes in Coyote Springs halfway to Utah and commute in. Others will be looking for projects like ours.”

Now he just needs to get the money.

“As bad as things are, the money doesn’t disappear,” he said. “It’s just waiting on the sidelines. It is waiting.”

Timing, timing, timing.