Las Vegas Struggles

[celinefanonline]

Tony Las Vegas development where Celine Dion lived now struggles

Thu Jun 4, 7:21 PM By Kathleen Hennessey, The Associated Press

 

LAS VEGAS - It was a symbol of Las Vegas largesse during the good times. Now it's an emblem of recession blues.

 

With a manmade lake in the desert, an Italian-style village beyond the suburban sprawl and neighbourhoods fit for diva Celine Dion, the Lake Las Vegas resort development flouted good sense and modesty in the tradition of all great Las Vegas dreams.

 

But it has fast turned sour for some.

 

Last year, the developer, Transcontinental Corp., lost the property in foreclosure after defaulting on US$540 million in loans. The new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. One if its anchor hotels, a Ritz-Carlton owned by Village Hospitality LLC, also filed bankruptcy to stave off foreclosure and has been sold. One of three premier golf courses has been abandoned.

 

New home construction has slowed to a crawl, though the community is far from built out. Foreclosures have spread like a virus and home values are falling.

 

Even the sparking, blue lake - the jewel of the luxury haven - nearly sprung a leak, forcing engineers to rush to make repairs before it drained.

 

Not surprisingly, residents are jumping ship. In May, nearly 10 per cent of the homes on the market at Lake Las Vegas were either bank-owned or short sales, meaning they were priced so low a sale would not satisfy the owners' debt to the bank, according Applied Analysis, a real estate research firm.

 

Nearly 80 per cent of the homes listed were vacant.

 

"I thought it was a no-lose situation. It ruined me," said Ed Santacruz, a former mortgage broker and fortune seeker who let his Lake Las Vegas hotel-condominium go into foreclosure. He had planned to rent out the property to tourists, but couldn't get enough takers to cover the mortgage.

 

"That's where I messed up, I believed enough in the product and in Las Vegas," Santacruz said.

 

Lake Las Vegas' woes largely are due to now familiar problems. The community was designed as both a resort and residential destination - leaving it heavily dependent on second-home buyers and tourism. Both faltered when the economy sputtered.

 

"There was a point and time when the higher end of the market had been less impacted. But as the recession has run longer and deeper than initially expected. . ." said Brian Gordon, a principal at Applied Analysis.

 

The community that strove for seclusion wasn't as isolated as some thought.

 

The palm trees and putting greens of Lake Las Vegas emerge out of the near empty desert off a dusty suburban highway 17 miles from the Las Vegas Strip. The homes are clustered around a 3.2-kilometre-long lake that defies the scorching heat and environmentalists, alike.

 

A replica of Florence's Ponte Vecchio, a popular venue for weddings, crosses the water on the south end, near a tasteful, small casino.

 

Two of the community's three golf courses were designed by Jack Nicklaus. Promotional materials boast a seven-minute commute to the Las Vegas casinos on the horizon - by helicopter.

 

The idea of exclusive desert resort living originally was the brainchild of J. Carlton Adair, an actor and businessman. Adair acquired the land in 1966 in a swap with the federal government that also included the rights to a substantial amount of water. Creating what he planned to call Lake Adair would require damming water destined for Lake Mead, the Colorado River reservoir that provides water to southern Nevada.

 

But Adair went bankrupt before his dream was realized and a subsequent group of investors also failed to raise the necessary money.

 

Transcontinental took up the mantle in 1990, a year before the dam was completed. The city of Henderson, a bedroom community next to Las Vegas, was attracted by the promise of a new solid tax base. It agreed to sell the community the water it would need to replenish the evaporation under the scorching sun. The community pays a water bill of about $2 million a year.

 

The decision was blasted by environmentalists, who now see a bit of karma in Lake Las Vegas' recent troubles.

 

"This was the height of the gilded age of excess in the 1990s and 2000s. It was a community built on the idea that there were no limits to natural resources or to the number of millionaires willing to invest in a project," said Launce Rake, a spokesman for the Progressive Leadership Alliance of Nevada, a liberal government watchdog group.

 

"I don't know if Lake Las Vegas is sustainable in the long term. Does it turn into a ghost town?"

 

This dire notion is dismissed as hyperbole by many residents and the current owner of much of the land and amenities, Atalon Group.

 

"Like many large-scale second home and resort communities throughout the country, Lake Las Vegas has had to adjust to the decreased demand for property and pricing of investments," Frederick Chin, president of Atalon-subsidiary LLV Holdco LLC, said in a statement.

 

"Atalon's goal for Lake Las Vegas is to reset and reposition the community to flourish as market conditions improve, thereby achieving what is in the best interests of homeowners and stakeholders alike."

 

After the development filed for bankruptcy in July 2008, corporate officials won approval to pay for urgent repairs to prevent the premature deterioration of two pipes underneath the lake. They argued the damaged pipes threatened to drain the lake like water from a bathtub.

 

There are plenty of residents with ample resources working to hold Atalon to its commitment. A savvy and heavily invested group, some are banding together to protect their homes and their amenities. One group is trying to arrange to buy the private SouthShore Golf Club now tied up in the bankruptcy.

 

Others are ready to move to less remote pastures.

 

To her own disbelief, resident and real estate agent Lynne Hoffman has had her Lake Las Vegas home on the market for three years with an eye toward moving to a community closer to more ordinary comforts - supermarkets, clothing stores, a bank.

 

She's dropped the price to $488,000 - $40,000 less than she paid in 2001. She gets offers from potential buyers, she says, but they lowball her lowball price.

 

"It's insane! I'm like, what do you want people? You want this house for a penny? I have to pay the bank," she said.

 

There are plenty of properties that have fallen much further from the height of southern Nevada's real estate bubble, one of the most inflated in the nation.

 

Real estate listings show a 371-square-metre mansion that sold in 2005 for $2.7 million marked down to $1.2 million in May. A 158-square-metre condominium that sold for $1.2 million in 2004 is now listed for $389,000.

 

Celine Dion and her husband Rene Angelil bought a home on the lake's south shore for $1.2 million in 2002, as the Canadian songstress began what became a five-year run at Caesars Palace on the Las Vegas Strip. Since then, Dion has moved on to other gigs and the home has only sunk in value to about $795,000, according to estimates on Zillow.com.

 

"Deals" like these are drawing a new breed of potential home buyers to the lake. One agent and resident, who asked not to be named to protect her business, described her new clients this way: "It was the Lexus or the Mercedes, we're down to now pickup trucks."

 

However, it's not likely that this tony retreat will soon become a favourite for young families or middle-class homeowners. Although home values have dropped to affordable levels, homeowners association fees that go to pay for upkeep of common areas have not. Some residents pay three such fees, adding more than $500 to a monthly housing bill.

 

Santacruz, who now lives in Chicago, laughed a pained chuckle when told the current listing price for the condominium he let go to foreclosure. He paid $359,000 for the 59-square-metre unit in 2004. It's listed for $76,900.

 

He thought for a minute and said, "At that price, someone could make some money.

 

i didn't know LV could be stuggle like this.......

 

but i think when Celine goes back there it would help Las Vegas too

[neilg]

$488,000 for a house in Lake Las Vegas?! I thought they'd be much more than that - that's the same price as houses here!

 

I didn't think Las Vegas was suffering quite as much - I thought people would try their luck at making lots of money in the casinos.

 

Maybe Céline left at the right time, before all this economic decline.

Edited June 6, 2009 at 07:39 AM by neilg

[Davey84]

Maybe Céline left at the right time, before all this economic decline.

 

yeah! I think so too, that's why I think she needs to think twice about going back... I don't think the shows can be sold out in the current economy... one plusside might be, that the ticket prices won't be higher then in 2007 (before November)...

[Bellamy]

$488,000 for a house in Lake Las Vegas?! I thought they'd be much more than that - that's the same price as houses here!

 

I didn't think Las Vegas was suffering quite as much - I thought people would try their luck at making lots of money in the casinos.

 

Maybe Céline left at the right time, before all this economic decline.

Actually Las Vegas suffered even worse.

[neilg]

$488,000 for a house in Lake Las Vegas?! I thought they'd be much more than that - that's the same price as houses here!

 

I didn't think Las Vegas was suffering quite as much - I thought people would try their luck at making lots of money in the casinos.

 

Maybe Céline left at the right time, before all this economic decline.

Actually Las Vegas suffered even worse.

 

 

Suffered even worse than what?

[Edwin]

Las Vegas is struggling? Boo-hoo. Let's single that CITY out among the many many places worldwide struggling through this terrible economy. Gimme a friggin break

[Selina286]

$488,000 for a house in Lake Las Vegas?! I thought they'd be much more than that - that's the same price as houses here!

 

I didn't think Las Vegas was suffering quite as much - I thought people would try their luck at making lots of money in the casinos.

 

Maybe Céline left at the right time, before all this economic decline.

Actually Las Vegas suffered even worse.

 

 

Suffered even worse than what?

That's so sad:(hope the economy get better soon, cause i feel so bad right now, not only for those people but also my mother, this is the year that i wasted the most money...

[Love,]

...and someday Lake Mead will dry up and Las Vegas will be a ghost town...

[hazard211]

Las Vegas is struggling? Boo-hoo. Let's single that CITY out among the many many places worldwide struggling through this terrible economy. Gimme a friggin break

 

LMFAO, so true..

 

Her show will have no problem selling, I go to a Cher show and people still ask about Celine. People always will to go to a Celine show there because of how good it was last time. Someone said there was a meet and greet with Cher and while waiting people were asking about Celine!

[Bralo20]

I went a weekend to Vegas and I can say Vegas is definately hurting. Some post I wrote on flyertalk about it:

 

Went for 4 nights to THEhotel and spend much time gambling in Excalibur but I visited near every casino and yes Vegas is definately hurting a lot...

 

Tim, one of the bartenders of Excalibur (where I played videopoker a lot) told me that it was very quiet, a lot of floor staff (waitresses) were laid off so it was hard to get a drink on the floor.

 

While playing at maximum bet on the pokergame every single drink was comped during my stay there. I gave Tim a 20 USD tip and he was very gratefull for it and told me that people were only tipping 1 or 2 USD. I actually gave him and 2 other bartenders who I talked to when playing a couple of hundred dollars in tips during my stay. This gave me not only a god service but also quality drinks from the expensive bottles behind the counter Way better then the stuff that's coming out of the taps... Never saw gin coming out of a tap, but hey in Vegas it can happen...

 

Also the taxidrivers which I gave mostly about 20 to 30 USD tip for a 10 to 20 USD fare were very gratefull and told me that it was very very slow at this moment...

 

And indeed, I was in Vegas back in October 2006 and back then the Las Vegas Strip was full with cars wile the boardwalks were crowded with people. At this time everything was empty... The streets were empty, the walks were empty, the casino's were empty... Even the beach in Mandalay Bay seemed rather empty to me...

 

 

So yes, I think Vegas is hurting indeed...

 

 

 

To illustrate:

 

http://farm4.static.flickr.com/3065/3613673078_e034544c0e_o.jpg

 

http://farm4.static.flickr.com/3340/3613673280_4a161cc6fc_o.jpg

 

 

View from my room to the pool area, actually the most crowded time during my stay...

 

http://farm3.static.flickr.com/2454/3612854487_79a1024f2e_o.jpg

 

Some other pictures: http://www.flickr.com/photos/39286997@N05/...57619453003707/

[Filine]

It's sad...but it's understandable that the first thing people let go are luxurious getaways to Vegas. I can't believe that Céline just stepped in and out at the perfect time, she is probably one of thel uckiest people out there. Everything always seems to work out for her. Her coming back to Vegas would mean new chances of employment for the people there and hopefully she'll be just as succesful in drawing people to the Colosseum which means more jobs in Caesars itself as well and for the taxidrivers...but I'm afraid that with the ticketprices she asked before it's going to be tough. I am sure they are considering everything now.

[SensationalCeline]

It's understandable. Everywhere is getting hit by this recession that we are in and it's just going to keep getting worse until our economy picks back up. That's not just for LV that's for everywhere.