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twitterResidents of bankrupt Lake Las Vegas face uncertainty
Neighbors banding together to preserve their lifestyle, community
Aaron Thompson/Special to the Sun
A passerby peers into the boathouse at the exclusive Southshore community at Lake Las Vegas.
Monday, March 23, 2009 | 7 p.m.
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Beyond the Sun
While owners, attorneys, judges and creditors debate the future of the bankrupt Lake Las Vegas resort, a handful of residents are banding together to take a proactive role in the process.
The resort’s future has been cloudy since original developer Transcontinental Corp. defaulted on its loan and was foreclosed on in January 2008.
The Atalon Group subsequently acquired the development and filed for bankruptcy in July, and the Nevada District of Federal Bankruptcy Court has since been swarmed by attorneys and filings on behalf of the resort’s owners and their dozens of creditors.
Only one major decision has been made so far — the January ruling that Atalon could abandon the money-losing Falls Golf Course at the resort’s entrance on Lake Las Vegas Parkway.
Other than that, however, how the resort will emerge from bankruptcy remains largely unknown, residents say, and they’re working to help shape that process and preserve the lifestyle in which they’ve so heavily invested.
“Really, our only problem is the unknown,” said Vicki Hafen Scott, president of the Southshore Homeowners Association, the resort’s oldest community. “But we’re doing our very best to forge the unknown into a positive.”
Though homeowners have no formal representation in the bankruptcy proceedings, Scott and her neighbors have been building a coalition of residents to work together on behalf of their community. They are reaching out to the city of Henderson and asking city officials to act as mediators for the parties involved.
“I think (Henderson) has a vested interest in this community,” Southshore resident Dora Middleton said. “A big one.”
Resident Richard Scott said helping hold the resort together is in the city’s best financial interest.
“It’s a huge tax base,” he said. “And it’s as nice a community as Henderson has.”
The bankruptcy court will handle the financial minutiae, residents say, but they’re hoping the city will act as the glue that keeps the various factions focused on the big picture.
“There are so many factions and so many entities that it’s hard for any one of them to step back and take a look at the big picture, because they’re so caught up in their own spheres,” Southshore resident John Allen said.
Mayor James B. Gibson said the city has been playing an active role in the Lake Las Vegas proceedings and will continue to do so.
“I think the one overarching comment that we’ve made each time and need to make is that anyone that wants to do anything out there needs to come through the city,” Gibson said.
Gibson said the city is in the position to be the go-between for the various parties and will do all it can to help the resort emerge from bankruptcy.
“We cannot allow this project to fail,” Gibson said.
For now, however, all parties involved in the bankruptcy are in a wait-and-see mode. Little can be done until the next major step in the proceedings — Atalon’s filing of the bankruptcy plan that will serve as the road map for the rest of the process — has been completed. The plan is due at the end of the month.
In the meantime, Southshore residents are working on things they can control.
Like the Falls, their community’s golf course will soon go into foreclosure. While the fate of the Falls remains uncertain — the course is being watered and maintained, but what will happen after it is seized by the lender in May has not been established — Southshore residents are working to preserve their course.
Richard Scott said residents have formed a consortium and raised hundreds of thousands of dollars in hope of buying the course outright, buying a controlling interest or, at minimum, keeping it in operation.
“We don’t know if that will happen, but we are in a position to make it happen if the lender is willing to work with us,” Scott said.
Vicki Hafen Scott said she has been encouraged by discussions with Atalon that could set the tone for the resort as it moves forward. Atalon has been good about managing reserve funds for the various homeowners associations, she said, and provided some order at a time when the entire resort could have splintered.
“It could have been much worse,” Scott said. “The fact that (Atalon) stepped into the day-to-day management as if nothing happened has made it much better for the community.”
Discussion: 26 comments so far…
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Residents of Lake Las Vegas should be aware that there is a free-view website where they can see the actual content of every document which is filed with the bankruptcy court. See:
http://www.kccllc.net/llv
The "Court Documents" can be located by clicking on a tab at the left hand of the page. Other interesting information can be found under the tabs called Schedules/SOFA, Claims Register and Adversary Case Proceedings.
This website exists pursuant to the order of the Bankruptcy Court judge in the case. Members of the public should be thankful that she signed the order, because in more recently filed "big bankruptcies" the bankrupt companies do not want this sort of information to be easily available to the public.
The one interesting fact that exists in exhibits to "Declarations" filed with the court by Credit Suisse, but which is rarely mentioned, is that the former owners of the development signed an "assignment in lieu of foreclosure", essentially handing over ownership and control of Lake Las Vegas to Credit Suisse as of January 1, 2008. The funny thing is that the former owners handed that assignment in lieu of foreclosure to the lawyers for Credit Suisse Cayman Islands, signed by the former owners, but with the name of the "assignee" blank. A copy of the actual assignment, with the assignee left blank, is an exhibit to one of the early Credit Suisse employee Declarations. That assignment in blank was kind of like handing over a deed to your house to your bank, but leaving the name of the "buyer" blank. That procedure was very unusual.
There have never been any documents disclosed in the court files which show exactly how "The Atalon Group" got Credit Suisse Cayman Islands to fill in the name of Atalon's subsidiary entity on that "assignment in lieu of foreclosure". The Atalon Group's principals have been very opposed to making any public disclosure of the amount of their "down payment", if any, paid to Credit Suisse, or the sale price they paid to Credit Suisse, or whether they are just a "straw man" for Credit Suisse.
So far, the bankruptcy court files show that Credit Suisse has been very kind and gentle in dealing with The Atalon Group, which is a rarity in bankruptcy cases when bankrupt borrowers deal with their mortgage lenders owed millions of dollars. So if the homeowners are ever told by The Atalon Group that "Credit Suisse is being tough on us" such a claim should, perhaps, be taken with a grain of salt.
One other word of wisdom to the homeowners:
The residents of Lake Las Vegas interviewed by the Sun are very naive in "reaching out to the City of Henderson and asking city officials to act as mediators for the parties involved." The residents have to understand that they are delusional on that point.
The City of Henderson is a municipal corporation and its officers and employees have only one party whose interests they really serve: The municipal corporation. Not the Henderson "voters and taxpayers". The city is not a beneficent or charitable institution, and the City Attorney does not represent the public.
While the Mayor may say nice things about "helping" the residents, that will not be the reality if it is too costly or strategically inconvenient for the city to do so. The city is not going to be, in effect, a free lawyer for the Lake Las Vegas residents in dealing with bankruptcy court, the debtors and the creditors. The city attorney has only one client: the municipal corporation.
I'm sorry to say that the Lake Las Vegas residents who were interviewed by The Sun are acting like "la la la airheads". The Lake Las Vegas residents need to pay for and consult their own bankruptcy lawyer. If they don't have one, I guarantee they will be severely harmed by some party or another, by the time this case is over. That's how Chapter ll bankruptcy cases turn out all the time.
You mean these rich people's "Land of OZ" was just a mirage? I guess money can't buy happiness.
Rich people are not stupid. In fact, I just counted 160 foreclosures in LLV. And the total is rising daily. Wait until the Falls golf course has its water shut off-I paid 800 Grand for a view of a pasture? Gee, I love those brown sandtraps. Now with South Shore going down, the Ritz in BK, and Loews wishing they never took over for Hyatt, is there any doubt that LLV is becoming an unmitigated disaster? Sure, the City of Henderson is going to help you. They spent 33 Mil of taxpayers money developing the infrastructure for the project. The city meathead in charge says the money is not in jeopardy because they charge the homeowners for the cost. Hello? If there's no one home, the only thing they can do is charge the remaining homeowners more and more, kinda' like the abandoned condo's all over Henderson. No, Celine and the rest of the LLV Richie Riches will simply walk away, and Ms. Meathead will retire, and leave the mess that is Lake Las Vegas to the next Alfred E. Newman clone in the City of Henderson. Gee, am I being too direct? Sorry, but the truth is coming out-the taxpayers take it in the shorts-again. The legacy of Mayor Jim, "I never met a toxic wasteland that I didn't love" Gibson.....
I can see the 215 / 15 interchange from my window at work and I can't tell you how many U-Hauls and Ryder trucks I see heading south on 15 back to California.
People are leaving Vegas, going back "home" and rebuild, lick their financial wounds, save some money and come back to Vegas in a few years when / if the town is humming again.
A couple of items in this article are not correct. For one, the SouthShore Association does have a bankruptcy lawyer and has had for the past 8 months. The Association is not relying on the City to solve all of it's problems, only looking to the City for support. Two, the reserve issue has not yet been resolved for the Master Association. The day to day management of the Master Association is being taken care of. The reserve and transition issues for SouthShore are close to resolution but not yet final.
I'm sure these people of Lake Las Vegas have the money to "preserve their lifestyle, community" so I don't know why this is even an issue for them - if they want it they just need to pay for it - and be grateful they've got the money to do it themselves.
They score a big fat ZERO on the pity meter.
As a resident of Bella Fiore, I am appauled at what is happening to our community. Had the builders not been as gready as they were, they would have sold our community out in the first phase. But instead, kept upping the prices till everyone fell off the waiting list. Now only about 20 of us live in our neighborhood with the vacant houses - AND WE PAID DEARLY for this privilege!!! We believe in the whole LLV experience, but feel we got taken. Next step - reevaluate our property taxes !! 2nd step - getting the HOA's to believe that something needs to be done - they are oblivious to the whole thing and keep talking about raising the monthly fees - FOR WHAT?? The builders arent maintaining their houses that havent sold and us 20 home owners are not going to carry the whole developement. Until the HOA's realize that they need to step up and do something as well, our next course of action is saying "we aren't paying" so get in line ! They have the "take it or leave it" attitude. Well, soon, they'll have no one to say it to, because we'll all just walk away...Henderson government also needs to save the LLV area because of their tax base and if the Ritz is truly in BK - Loews won't be far behind - then the whole community will be like Baker, CA. - No one will want to live there. Houses are re-selling for pennies on the dollar so people are bottom feeders. This is fine to as long as - again, the HOA's take note and work with everyone. Enough said, but this is beyond being a "stupid" mess.
HappyHomeowner:
Who has the votes to run your homeowners association, you 20 homeowners or the home builder?
Obviously, you 20 homeowners should try to take over the home owners association...but if you don't have the votes, you should go to one of the local lawyers who handle litigation against home builders.
If your builder controls the HOA, your builder has fiduciary duties to all of you, and if the management company people are acting like jerks the home builder can be held responsible.
This is a sad situation. I really feel bad for the few homeowners remaining in Bella Fiore. But at least your homes are not in a toxic waste channel-like
Tuscany. All these developments were approved and expedited by the crooks at the City of Henderson. Mayor Jim Gibson and his group of bottom lappers should be brought up on charges-but no, they'll simply end up working for the same people that screwed us over in the first place. Henderson is a mafia style hell hole-Hey, how's that ex police chief doing? Another loafer turned lobbyist....
If past articals in the R-J are correct the previous LLV developers borrowed 540 million then declared for themselves a 470 million dividend. Not only that, they paid 799k/acre to the owners of a sizable tract of land in South Shore and the next year sold it to one of the developers' son for 247k/acre so he could turn what once was for sale as a estate sized lot into a 36 house tract. Meanwhile hundreds of ordinary hard working people plus, of course, dozens of those nasty "Land of OZ" rich people have been taken to the Cleaners.
If this doesn't screem-out for a full US Department of Justice investigation what in hell does?
bdover: You are the first person in Las Vegas who I have seen comment on what you apparently know and what I know about Tuscany. If you run the word "Rhodes" through The Sun's archives, and read the stories going back 10 years, you get to see the amazing history of that piece of land and its relationship with the Nevada Department of Environmental Protection.
However, I've never read anything saying that Lake Las Vegas has any toxics problems, so it's not a good idea to confuse the discussion about LLV with Tuscany.
Old lawyer guy, I didn't mean to infer that LLV is a toxic waste dump. No, it's built on a nearby hillside, so it has avoided the perchlorate and hexavalent chromium runoff nearby in the groundwater. But think about it-the departing mayor pushed through all kinds of remediation projects to allow development on toxic waste areas near LLV. Tuscany is one, there is now underway a project at Lake Mead Pkwy and Boulder that might lead to 15,000 homes being built on the same toxic waste-nearer to the WW2 factories that produced the hazards. I have such an amazing article from 2007 that points out the corrupt way that the City of Henderson, and specifically Mayor Gibson, pushed through remediation on these toxic areas. Did you ever watch the film "Erin Brokovitch?" Hexavalent chromium big time. I'd be happy to send you the article-I sent it to Jon Ralston-He did nothing. My e mail is nednouget@hotmail.com. Best of luck...
Oops. nednougat@hotmail.com. Sorry, old lawyer, I was educated on the west coast.
I was out at Monte Lago for a beer festival and when I walkied through the casino it was like walking through a ghost town.
I used to be a landscape contractor and got ripped by LLV so I guess what goes around comes around.
Another thought-across from the entrance to Lake Las Vegas are gigantic walls of dirt that I always wondered about. Where did they come from? Just found out that they are the result of magnesium mining years ago. Now some yahoo is talking about "remediating" the pits, and building more homes. And the City of Henderson is considering letting it happen. Jesus, God, they're already building on perchlorate and hexavalent chromium toxic waste water down below-now they want to build on top of magnesium waste pits. Mayor Gibson, have you no shame? Or are you just hiding behind the NDEP, a sorry group of government hack "scientists" working for a daily wage, oblivious to hell they are allowing to happen in Henderson? Old Lawyer, help me here....
bundy691@hotmail.com
bdover and old lawyer....if you want more info. on the dirt across from LLV and Tuscany look up:
Keith R. Stewart, President
Stewart Environmental Inc
Las Vegas, Nevada
good luck!
Comment removed by staff.
Please read :)
I had so much fun at this place, mainly at a good friends pad, but the scenery is pretty amazing and the whole experience is world class. Yes, there isnt that thriving trade down at the shops now, maybe that hilltop Mediteranean restaurant is more quiet or down at the waterfront.
**** Remaining homeowners: Take ownership of LLV and make it as appealing as can be to young people. Build a skate park. Utilize the waterfront for concerts (the profitable ones - staff it with security). When the golf course turns brown, put a world-class mountainbiking course and get the NORBA events! Make it a special recreation destination for tired, fatigued valley gamblers looking for a little nature and magic. Make LLV its own, sustainable economy. Have armed security. Invite craftspeople to work down at the shops on the water. Make ceramics, invite artists from around the world for subsidized visits. Have a smelter, I dont know what one is, but it sounds important. Make blown glass, make metal sculpture, make love, not war. Listen, you gotta love LLV enough to make the damn place a commune - but oh, what a commune it could be. MAKE IT HAPPEN LLV, MAKE IT HAPPEN. Screw golf.
Why do I not feel empathy for any LLV homeowner?
Answer: it's hard to do with a group of the population who opted to buy & live in (minimum) 1.5 Million Dollar homes. They could have easily bought for less and lived out here with us commoners in old Henderson.
Well, Mr or Ms Afghanistan Vet, I am getting real close to seventy years of age. Have been busting ass since I got my first job as a newspaper boy when I wan 9. I am still busting it because I have not been as successful as many seniors in LLV so can't retire yet.
After all these years of hard work, please tell me why I would choose to live where there are cars jacked up in drive-ways, sofas' on the front porch, Christmas decorations still hanging there on the forth of July, and punks roaming the streets, painting the walls and buildings.
Quit feeling sorry for yourself, get it together and you too will not have to put up with that kind of stuff when you get old,
Comment removed by staff.
So, I'm thinking of buying one of these houses at LLV, because they are getting so cheap. What are the risk I face?
1.] Is this lake drying up? I read something about a pipe problem?
2.] Toxic waste?
3.] Should I get my own BK lawyer before I make a purchase?
What are the risk about purchasing here?
Folks, the lake is not a toxic dump. It is a fabulous area and will come back.
WERKSRITE: You can buy great homes for low money - it will come back and is a good investment. We are staying - not because we can't afford to move, but because we WANT to ! Yes, the HOA is in denial, but we'll fix that too - in time.
FOGHORN: I, like you, busted my ass for years and finally want to reap the rewards. I started as a lot boy at a dealership back east and worked my way up to running a chain of 8 dealerships. I AGREE with you! I don't want to live next to cars jacked up, couches on the front porch, etc. I can move to No. LV and get that or to LA. We paid because we believed in the community and in reality we still do - like you. We will all get through this. My wife and I are fortunate that we got our property for less than the others as we were the last few remaining people on the build list that hadn't walked away. Builders kept increasing prices weekly and people gave up. Now they sit on homes, when they had a list of over 100 people WANTING to buy here.
AFVETERAN: I wouldnt trade mine for yours no matter what..in the long run our homes will still appreciate faster than yours and the return will outlive you or I. I assume you don't frequent the lake at all or MonteLago either. Thats OK cause you're probably the type that buys 1 drink and doesnt tip when you leave.
We at Bella Fiori will prevail and will enjoy our homes. And like the world, the value will pick back up in a few years. And we will all enjoy life again and reap its rewards. People are buying homes here - cheaply unfortunately, but they are buying and taking advantage of cheap mortgages. Bring them on !!!
Thanks to all of the contributors to this forum for their thoughtful content. We (my wife and I) currently live in the Paseo Colorado mixed use complex in Pasadena and thought that LLV would offer similar amenities on a much grander scale, without having to live in an apartment, not to mention the incredible environment. Even after our investigation and finding this forum, we still plan to come up and take a look. I must say that this kind of insight is drastically different from what we have found on real estate sales sites. Thanks again.
By the way HappyHomeOwner, I personally like Baker. Better than Baker however is Ballerat where my namesake once lived.
I recently purchased a condo in Viera. Prior to my closing, I stayed a weekend at the Village a few weeks ago.
While the mornings were a bit slow, the afternoons and evenings sure picked up. The restaurants were all crowded, there was an outdoor concert, the casino was buzzing. My friends and I had a blast! The Jam-eoke in Sonrisa Mexican Restaurant was a hoot. Bernards Restaurant was awesome!
I also heard that there is a new marketing person for Lake Las Vegas. You can tell. There are more activities going on. I just saw on the LLV events emails that there is going to be a Farmers Market on Sept 12, 2009. What a great idea! This is a supposed to be a village in Tuscany, how much more authentic is an open air market!
The best part of my recent weekend in Lake Las Vegas (before I closed and confirmed my good decision) is the Village is so relaxing and lends for quiet conversation with friends, old and new. The Ritz has an awesome firepit in their courtyard.
I couldn't be happier with my purchase! And, seeing how many other sales have been going on in Lake Las Vegas, others do to and soon enough, all of the homes will be filled with owners and guests enjoying wonderful LLV!