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North Las Vegas eyes foreclosure solution

Federal crisis aid may pay for demolition at cost of moving people into homes

Leila Navidi

North Las Vegas wants to use federal foreclosure aid to tear down this vacant apartment complex, which has gone into foreclosure. The alternative is to use the money to help more people buy foreclosed single-family homes. Officials say the demolition will increase property values and boost development in the neighborhood.

By Timothy Pratt (contact), Mike Trask (contact)

Friday, Nov. 14, 2008 | 2 a.m.

Leila Navidi

North Las Vegas' proposal, joined in by Clark County, is the only one in the area that calls for using federal foreclosure crisis aid to demolish housing. Officials say the government limits what they can do with the money, and this is the best plan for North Las Vegas' future.

Leila Navidi

A man carries a mattress to the dumpster inside Buena Vista Springs.

Leila Navidi

The park area is fenced off inside Buena Vista Springs, the now shuttered apartment complex at Carey Avenue and Martin Luther King Boulevard in North Las Vegas.

Real Estate in Crisis

North Las Vegas wants to spend about $7.6 million of foreclosure crisis aid money to buy and demolish a failed apartment complex, the only idea of its kind among the plans for the $54 million allocated to Southern Nevada.

A divided North Las Vegas City Council chose the Buena Vista Springs apartments over a plan that would have helped more people buy foreclosed homes.

Fifty apartments for low-income seniors, a community center and possibly stores would replace Buena Vista’s 252 units.

Opponents of the plan say it is not the best way to deal with the worst foreclosure rate in the nation. The question is: Will tearing down empty properties and replacing them with better ones improve a neighborhood, even if the result is less housing, or is it better to help as many people into foreclosed houses as quickly as possible?

If the Housing and Urban Development Department approves the Buena Vista proposal, the project would be the only major one in Southern Nevada involving demolition of housing. North Las Vegas and Clark County propose spending much of the rest of their “neighborhood stabilization” money on helping people buy foreclosed homes. Las Vegas proposes spending the lion’s share of its $20 million allocation on helping people into houses.

North Las Vegas City Councilman Robert Eliason said his city originally considered two approaches to spending its $8.6 million share of the federal aid. The main component of one plan would have provided $20,000 each for 290 individual purchases of foreclosed homes. The one chosen by the council, however, reduces the buyers’ assistance to 150 foreclosed homes, spends $4.6 million on buying Buena Vista and calls for the county to kick in an additional $3 million for Buena Vista.

Eliason said his main objection to the Buena Vista package is that it offers less direct help to people.

“I’d prefer to help 290 single-family-home buyers,” he said. “That’s what it’s (the funding) designed to do.”

Councilwoman Stephanie Smith, who also voted against the proposal, said Buena Vista is not the right use of the money.

“I voted against it because I think this money should go to homeowners,” she said. “Buena Vista has been a blight for years. But I don’t think it has anything to do with the foreclosure crisis.”

As administrator of North Las Vegas’ Neighborhood Services Department, Kenny Young would oversee the Buena Vista project. He said there was a lot to consider with both options.

On the paperwork listing the pros and cons of the two options, city staff listed six items in favor of the Buena Vista plan. As for the other plan, it had one thing in its favor: “meets ... guidelines.”

Young said one of the considerations was that buying a lot of foreclosed houses and selling them at below-market rates could lower property values in those neighborhoods.

Buying and demolishing Buena Vista, then building something better on the site, would help “maintain lower crime rates” in North Las Vegas’ “most unstable neighborhood,” and would attract new investment into the neighborhood, according to the city staff presentation.

“So how do we best stabilize neighborhoods?” Young asked, echoing the name given to the vehicle for the federal money, “Neighborhood Stabilization Program.”

The money came from federal legislation approved in July, with nearly $4 billion passed out nationwide based on state-by-state foreclosure and subprime mortgage rates, as well as the number and percentage of homeowners in default.

The funding is being handled with greater speed than most federal programs; Clark County, North Las Vegas, Las Vegas and Henderson must receive all public comment and then approve their respective plans in time to submit final drafts to HUD by Dec. 1.

The Clark County Commission is to vote Tuesday on its joint proposal with North Las Vegas, which includes the Buena Vista project.

Brian Sullivan, a spokesman for HUD, wouldn’t comment on the value of one approach or another for using the funds, but noted that the law allows states and municipalities to buy foreclosed houses, help first-time homebuyers or demolish blighted, foreclosed properties.

Young said tearing down Buena Vista would not leave the surrounding community with less housing. Rather, he insisted, “We’re losing blighted housing, not housing that we consider usable.”

Buena Vista is no stranger to HUD money either.

In the city’s proposal, an attachment notes that the area received an average of nearly two calls to North Las Vegas Police daily for at least five years — until late 2007. Then owner Creative Choice West failed its fifth HUD inspection in four years. The federal agency removed a $212,000 monthly subsidy it had been giving to about 800 occupants of 233 apartments, and, together with other agencies, used Section 8 rental vouchers to relocate most of them to all parts of the valley.

Since then, according to Young, most of those apartments have been unoccupied and boarded up. Calls to Florida-based Creative Choice West were not returned. Jeffrey Cogan, a Las Vegas-based lawyer who represented Creative Choice during summer 2007, this week said he was suing the company for $1,875 in unpaid fees. And North Las Vegas’ proposal indicates that Buena Vista entered the foreclosure process in September.

It also says the neighborhood surrounding Buena Vista is at a “tipping point” and that without demolishing Buena Vista, “the community may never recover from this foreclosure crisis.”

County Commissioner Lawrence Weekly, in whose district Buena Vista sits, thinks the proposal “makes sense” because getting rid of the apartments there would make the neighborhood more attractive to homebuilders in the future.

Weekly, like Young, noted there were a great number of restrictions on using the federal money and little time to come up with a proposal.

The county commissioner also said he wished the legislation authorizing the funds would have allowed local governments to offer direct help to people who had lost their homes to foreclosure, instead of focusing on neighborhoods and houses.

“But,” he said, “it is what it is.”

Discussion: 9 comments so far…

By DMCVegas

11/14/08 at 7:59 a.m.

Suggest removal

This is a horrible idea. NLV has worked VERY hard for many years to shed it's image of being a perpetual ghetto. New development has helped quite a lot. But this idea will counter all of this.

1. If you pull money from homeowners who need it to keep their homes, and ultimately their communities together, you're gonna kill property values, and turn these tract home developments into slums.

2. If you move the displaced residents from public housing into these foreclosed homes, you'll just turn these places into ghettos all that much faster.

This has nothing at all to do with race, so don't even try to play the race card here. Public housing is for disadvantaged people. The kind of people who are in no financial condition to take care of their properties and perform home improvements, let alone basic maintenance. Simply shoving them into these homes isn't fair to them, nor other residents especially.

Make HUD pay for these units to be rebuilt. And if need be, impose jail time on those responsible for letting things get so out of control at Buena Vista Springs. But don't kill the entire city to earn some votes from a few poor and disadvantaged people. Do that, and the city will never recover.
By doubledown_deadender

11/14/08 at 8:22 a.m.

Suggest removal

Let me guess...Another Harry Reid owned investment LLC?

Just wondering...

And the demo company would not be "Mormon" owned, by any chance?
By bluez1

11/14/08 at 9:55 a.m.

Suggest removal

In 1982, I came to Las Vegas as a newly minted teacher and was assigned to Booker Sixth Grade Center, a block away from these apartments. I had thought it was a good idea to live in the neighborhood where I was teaching. (I did say "newly minted"). One of the places I checked out was Carey Arms, the previous name of Buena Vista. As I drove up to the office, I was met by a police officer of the North Las Vegas PD, who was responding to an incident. He told me moving in would be an unwise move. I never forgot those words.
The Gerson projects were on the opposite side of Booker. The PE teacher had a drill for the students that, in case of gunfire, they should lie prone on the ground. The Gersons were demolished, Booker was replaced, now the Buena Vistas are next. Progress!
By boftx

11/14/08 at 10:47 a.m.

Suggest removal

It's hard to keep property values up if no one owns property. I think that money is much better spent helping people keep the property they have.
By slbj

11/14/08 at 1:52 p.m.

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Unfortunately these funds can not be used for foreclosure prevention. It was not designed to help borrowers that are facing foreclosure-only to buy properties that are already bank-owned. So coming up with ways to make the most impact in neighborhoods faced with a lot of bank-owned and blighted properties is the challenge that the city has to meet. Call your congressman if you want a program to help borrowers in foreclosure because they are the folks who created the regulations for this program.
By Kendra

11/15/08 at 12:05 a.m.

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As one invested in that community, I have one question: Should the sale take place, what provisions are being made to aid the 50 or so families that will be displaced by its sale and foreclosure?

It is my hope that a rushed decision does not cause these families to be treated with injustice. Unlike when Buena Vista lost its section 8 funding, these families do not receive government aid; therefore, what help will they receive to relocate?

With a new rec center across the street and fewer residents, Buena Vista may not be attractive, but it is far quieter. In fact, according to the NLVPDs crime map, it is one of the areas with the least amount of crime that side of Elkhorn. While tearing it down may improve the area's aesthetics, it will not stabilize foreclosures.

Is it worth the monetary price tag or the displacement of the families?
By revtomperl

11/15/08 at 10:48 a.m.

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Hey, this is such a bad solution so that it must have been dreamed up by the government. Normal people would understand that purchase of foreclosed homes does not equal demolition of bad projects. Maybe you should have a giant fire department exercise and burn them down - maybe you could set up bleachers and have people watch. You could also have a row of slot machines nearby. Maybe a dunk em tank for federal officials! Hey, this is Vegas, BABY!
By chocolate1

11/17/08 at 5:53 p.m.

Suggest removal

PLEASE DEMOLISH! I have lived down the street from these apartment buildings for 17 yrs. I would like to have something nice and useful there. The people that are oppossing this idea don't live in this area and could care less about those of us that do!!
By Stu_Pidasso

11/26/08 at 10:03 a.m.

Suggest removal

You can't sell BVS to a private buyer? Why not?

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