Master-plan developers file for bankruptcy

The partnership behind the 2,675-acre Park Highlands master-planned community in North Las Vegas has filed for Chapter 11 bankruptcy protection to restructure its current debt and reposition the project during the economic downturn, a project official said.

The project, which is being developed by a group led by the Olympia Group, listed between $100 million and $500 million in estimated liabilities against similarly estimated assets in the filing late Friday.

"The economics have changed a lot since we bought the project and the existing debt needs to be restructured," Marc Bolduc, Olympia's senior vice president of development, said Monday. "We just need to revisit this project and try to have it make sense in today's world."

Olympia acquired the land in late 2005 after bidding $639 million at a Bureau of Land Management auction. Park Highlands broke ground in January 2007 and is designed to have 16,000 residential units home to 50,000 people in 10 years.

No homes have been built, Bolduc said.

The partnership plans to emerge from bankruptcy by October. The filing comes as home values decrease and foreclosures increase in Clark County.

Median sale prices for homes and condominiums in the ZIP code 89084, where the western part of Park Highlands would be located, peaked at $350,000 in November 2007, according to real estate research firm Blockshopper.com.

The price fell to a median sale price of nearly $116,000 in March, according to the Web site.

SalesTraq reported ZIP code 89031, which neighbors the Park Highlands development to the south, had 333 foreclosures in the first quarter, highest in the county.

Park Highlands is being developed by November 2005 Land Investors, a partnership between Olympia and affiliates of homebuilders American West, Astoria Homes and Standard Pacific.

Park Highlands' attorneys plan to file a complete list of all creditors in U.S. Bankruptcy Court in Las Vegas this week, lead attorney Richard Holley said Monday.

The bulk of the debt is tied to two lien loans totaling $230 million, both of which Credit Suisse is the administrative agent, Holley said.

The 20 unsecured creditors, however, listed with the original filing include Western States Contracting, which is owed $1.16 million, and the city of North Las Vegas, which is owed $221,074.

Construction so far has been focused on installing utilities, rough grading for streets and other underground infrastructure construction on 600 acres.

Bolduc said the project has been temporarily shutdown, fenced and materials secured. No model homes or any other vertical construction has taken place.

"We've been doing a lot of design work to be ready for a return in the economy," Bolduc said. "We're still very excited about the project still."

The master plan is located along the Las Vegas Beltway bordering the 1,905-acre Aliante master plan to the east and west.

The bankruptcy filing does not affect a joint venture between Olympia and Boyd Gaming Group, which is seeking approval from North Las Vegas officials to develop a hotel-casino on 68.4 acres of Park Highlands, Bolduc said.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.