Coyote Springs developer sues Pardee Homes

By Buck Wargo

Published Thursday, March 24, 2011 | 2:58 p.m.

Updated Thursday, March 24, 2011 | 4 p.m.

The developer of Coyote Springs northeast of Las Vegas has filed a lawsuit against Pardee Homes alleging the builder has reneged on its agreements to proceed with the master-planned development.

The lawsuit filed in Clark County District Court is a reflection of the state of the region’s new-home market, which has tanked over the last four years.

Filed by the Las Vegas law firm Pisanelli Bice, the lawsuit alleges Pardee failed to complete custom-lot improvements for the 43,000-acre development designated to have 159,000 homes. Pardee is the master developer for all single-family and multifamily homes and had an option to purchase land every year.

The lawsuit also alleges that Pardee in November stopped work on infrastructure improvements, which included a sewer treatment and water treatment plant. Pardee also stopped work on a golf clubhouse and notified the developers in December it wouldn’t continue, the lawsuit alleges.

Pardee says the development didn’t have sufficient water available for the project in a February letter, which the developer claims in the lawsuit is a bogus excuse and that water is available, according to the court filing.

The demand for new homes has dropped considerably since 35,291 homes were sold in Las Vegas in 2006. That number dropped to 19,462 in 2007 and barely hovered over 5,000 in 2009 and 2010. It may not reach that amount in 2011 at the current pace.

Coyote Springs was based on the premise that skyrocketing home prices in Las Vegas would prompt buyers to be willing to drive 50-plus miles to buy a more affordable home.

But the median new home price in Las Vegas has fallen from $328,580 in 2006 to $206,844 in 2010. The median price of existing homes has fallen from $285,000 in 2006 to $118,656 in 2010, according to SalesTraq.

In a 2007 Interview with In Business Las Vegas, Coyote Springs developer Harvey Whittemore said Pardee had the ability to pull out of the deal at some future stage but doubted the company would.

“They could but it’s highly unlikely,” Whittemore said. “They have so much invested in the property right now.”

County records showed that Pardee paid $25.5 million for 3,605 acres in 2006. Whittemore said at the time Pardee had more $100 million invested in the project.

Pardee Division President Klif Andrews released a statement say it doesn’t comment on legal matters and added, “Pardee Homes remains committed to developing Coyote Springs as a residential master-planned community and the Coyote Springs golf course remains open for public play."