At 20, Summerlin still has room to grow

By Buck Wargo

Friday, June 4, 2010 | 3 a.m.

What was purchased for a bargain by today’s standards in the 1950s helped put Las Vegas on the national map when it comes to master-planned communities.

Summerlin is celebrating its 20th anniversary this year, marking the 1990 sale of its first parcel to Woodside Homes. In 1991, the first resident moved into Summerlin, which in the 19 years since has become home to nearly 100,000 residents in 40,000 homes on the western edge of the Las Vegas Valley.

Summerlin has grown to 20 office parks, 15 shopping centers with more than 2 million square feet of retail, 75 restaurants and more than 150 parks and 150 miles of trails.

“It has meant a lot, and took Las Vegas to a whole new level,” said Richard Lee, first vice president of First American Title and a real estate analyst. “For many years, (Summerlin) was No. 1 in the nation (in terms of sales). It is as well designed and built as anything you can see in the United States. You may never see what they did duplicated for many years to come.”

Howard Hughes purchased 25,000 acres on the then-barren western valley in the 1950s for $3 an acre.

It wasn’t until the mid-1980s, a decade after Hughes’ death, that a corporation formed by his heirs hired planning consultants to develop the master plan named after Hughes’ paternal grandmother.

Kevin Orrock, top division executive at Howard Hughes Corp., said one of the keys to success was staying true to the original plan with one major change — the addition of the Las Vegas Beltway that bisected Summerlin and enhanced its development. Zoning was controlled by the developer, and there was no patchwork of development.

“I think it was a time when you looked at how development occurred in the valley, people were looking for a different lifestyle,” Orrock said. “We created a lifestyle out there. This is like a bedroom community of a major city, except that it’s right on top of the employment center in the valley.”

That doesn’t mean Summerlin has been without its controversies. When what is now the JW Marriott was proposed, people complained that Summerlin should be casino free. Some were concerned that Summerlin was too close to Red Rock Canyon. Three years before development started, Summerlin exchanged 5,000 acres with the Bureau of Land Management in a deal facilitated by the Nature Conservancy. Howard Hughes Corp. received 3,000 acres to the east that was more suitable for development.

The original front door to Summerlin was the construction of Summerlin Parkway, which was funded by Las Vegas special improvement district bonds.

That marked the first time the private sector undertook the improvement districts, which involved bonds paid off by homeowners.

Less than one year after the first family moved into Summerlin in March 1991, it became the country’s best-selling master-planned community. From 1991 to 1998, Summerlin sold more than 18,000 homes and sold another 9,000 between 1999 and 2001, Orrock said.

“Given the dynamic growth, we probably exceeded expectations,” said Orrock, who said the initial vision and the company’s capital added to the project’s momentum.

Hughes donated 520 acres of right of way to the Las Vegas Beltway and provided excavation services worth nearly $60 million.

“What it has done in the valley has raised the bar on how development should be done in managed-growth form,” Orrock said.

Home sales in Summerlin have slowed during the recession — only 410 sales took place in 2008 and 350 in 2009, according to SalesTraq.

Mountain’s Edge, a Focus Property development, was No. 1 in the nation in home sales in 2007 and 2008. It had 1,021 in 2008 and was third in 2009 with 537.

That has fostered the perception by some that Summerlin’s growth, which has averaged 1,500 homes a year over 19 years, is mostly complete, but that’s far from the case.

Of the 22,500 acres that comprise Summerlin today, about 9,000 remain undeveloped, Orrock said. The property could have 80,000 to 90,000 units when done, he said.

“We are a little more than halfway done,” Orrock said. “We are far from completion. We have another 20-plus years and it is very conceivable it could be a 30-year build out ... The Strip always gets the big splash, but for the past 10 years, Summerlin has had $500 million to $800 million in development activity. That’s like delivering a project on the Strip every year.”

The Howard Hughes Corp. is owned by General Growth Properties, which filed for bankruptcy protection last year after it became overwhelmed with $24.6 billion in debt. Because of the recession, General Growth has halted construction on its Summerlin Centre mall.

And in February, the company proposed a plan that would have developments such as Summerlin spun off into a separate company.

Orrock said General Growth has done a fabulous job of navigating the bankruptcy process and none of that has affected Summerlin, which he said has been operating business as usual. The challenge has been dealing with the economy, but he said he’s optimistic.

“Summerlin will continue to be a bright spot for this community, and we are all going to get through this,” Orrock said.