A Real Estate Oasis in the Desert Dries Up

by | BiggerPockets.com

Here’s a great idea – let’s buy a huge parcel of land in the middle of the Mojave Desert.  Are you with me so far?  Then we’ll dig a really, really big hole and fill it with water.  Seriously, stay with me here.  Next we’ll put in not one, but three super high-end golf courses.  So who’s going to play there?  Glad you asked!  Along the giant hole filled with water we’re going to build unbelievably expensive homes and get mega-rich suckers people to buy them.  To attract tourists we’ll sweet-talk some major chains, like the Hyatt and Ritz Carlton, to put in some ultra-expensive hotels.  So what if it’s a long way from the Las Vegas Strip or anything else?  To keep them happy we’ll throw in a little Casino.  We’ll also get a bunch of other fools entrepreneurs to put in some little stores and such.  After all this happens a bunch of real estate developers will surely want to put in a lot of overpriced homes in the area that isn’t along the mud puddle lake. Brilliant idea, right?

 That’s exactly what happened at the Lake Las Vegas Resort in Henderson, Nevada.  A concept first conceived long before the Las Vegas real estate boom, the idea was to provide a first-class destination far removed from the glitter of the Las Vegas Strip.  The Hyatt and the Ritz did put their hotels in, the golf courses were built and Casino Monte Lago was born.  The wealthy, including singer Celine Dion, purchased multi-million dollar waterfront homes along the 320 acre man-made lake and the builders put in luxury houses and condos in the 3600 acre community.

The real estate frenzy came along at exactly the right time.  The area boomed and the people came.  They gambled in the casino and patronized the shops.  There were art shows and wine walks and even lakeside concerts by entertainers such as Andrea Bocelli.  Wealthy tourists paid hundreds of dollars to play a round of golf.  It was an oasis in the desert.  What could go wrong?

The Cracks Appear

The economy soured and, like many projects, this one was overleveraged.  Lake Las Vegas filed for bankruptcy protection and the cracks appeared – literally.  In 2008 cracks in a drainpipe beneath the man-made lake threatened to break and drain the water out.  Empty Crater Las Vegas Resort doesn’t have the same ring.  Had that been allowed to happen the area would have been absolutely devastated.  Fortunately the bankruptcy judge allowed the expenditure of $3 million for repairs (article).  But wait, there’s more!

The Hyatt had become Loews and was being foreclosed by Wells Fargo in June of 2009 (article).  Loews is struggling to survive and fighting the foreclosure.  At least there is still the AAA Five Diamond, Ritz-Carlton Hotel, right?  Not exactly, the Ritz Carlton recently announced that they would be closing the hotel in May of this year (article).  Well at least you could still gamble, couldn’t you?  Not so fast, the Casino Monte Lago announced that they would be closing in March (article).  A round of golf, then?  Perhaps, but two of the three golf courses have closed.  If you hurry you may be able to buy something at one of the few remaining shops before they go out of business.     

Here’s An Idea

Tourists really love old ghost towns, right?  Trust me on this one!  We’ll take this area outside of Las Vegas.  It’ll have a couple of abandoned hotels, lot’s of empty houses and vacant stores and even a defunct casino.  The centerpiece will be this huge hole in the ground that used to be a lake (well, it used to be a hole in the ground, then a lake, and now a hole in the ground again).  We’ll make a fortune here!  Maybe we can even get Celine Dion to sing a few songs at her lakefront dirt-front home.

There are those who look at things the way they are, and ask why… I dream of things that never were, and ask why not?Robert F. Kennedy


Photo:  michael.cortina

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  1. This song from Queen does a good job of explaining just what happened. I talked to someone at the Ritz here in Denver about the Lake Las Vegas fiasco and it blew my mind. What an utter catastrophe caused by a complete lack of foresight. That’s what happens when people/companies get greedy — they forget to see the desert for the sand.

  2. Jenny Delasquez on

    Wow, what a poorly-researched, misguided blog entry. Even greater than the shame that is Lake Las Vegas’ current state is your lack of accurate knowledge about the development and area. Really, Richard, you should dig a little deeper than the one-dimensional editorials (peddled as articles) in your local Vegas papers.

    I bet you think Palm Springs is moronic, too. Look at all of those hoity-toity luxury resorts, disgustingly manicured golf courses, and (gasp!) private, crystal blue mudpuddles. And WHO would want to drive +/- 2 hours to go all the way to the middle of nowhere.
    Ugh…your transparency is boring.

    1) There were never any cracks in 2008 or ever…that was a scare story for the local papers. Again, do some due diligence, and you’d see the facts.
    2) The $3M was approved to conduct regular, preventative maintenance on the twin pipes below the lake. This is to prevent any cracks from occurring (see #1) in the future, and was required every 10-ish years from installation. It had been about 10 years, so the maintenance was expected and completed as planned. The funds were from Deutsche Bank, part of a $127M capital investment secured at that time.
    3) In case you haven’t noticed, there aren’t too many lakes in the middle of Las Vegas, a city that has never been derailed by Naysayer Nellies like yourself. Actually, just 2 to be exact, if you include the also man-made Lake Mead National Park. You can’t buy a house in a national park, so Lake Las Vegas is the only lake (or water, for that matter, other than glorified golf water hazards) community in the area. That is, unless you count The Lakes in Spring Valley, or as I like to call it, The Canals.
    4) Wells Fargo never went through with foreclosure. Here’s the most recent article about the Loews’ operating condition: http://www.hotelinteractive.com/article.aspx?articleid=16156
    5) The lake itself isn’t going anywhere. The City of Henderson has made its support very clear. Prior to construction, the developers of Lake Las Vegas were required to provide the City of Henderson $30M in emergency funding, in case the integrity of the lake became compromised. $30M will keep the lake intact for a lot longer than you would like, and it has not even been accessed. Add to that the $105 / month that every LLV homeowner pays toward the maintenance and water rights for the lake.

    • Actually I am quite familiar with the area. I considered purchasing a residence in there but decided against it after looking into it closely. And that was before the boom. And it has nothing to do with articles in the paper.

      I have also stayed at the Ritz-Carlton – an outstanding hotel. I’ve played golf at The Falls Course.

      Palm Springs is a different animal. In an area with sever water shortages the idea of a man-made lake requiring constant replenishment (at a cost of $3 million per year)is moronic. Seen the water levels at Lake Mead lately?
      Were the pipe repairs routine? Yes, but what would have happened if they hadn’t been done? A major break would have caused the lake to drain. The idea that if it isn’t done every 10 years the lake could drain is what? Sanity?

      Your item #4 – read the article. I never said that Wells Fargo went through with the foreclosure, I said that Loews was fighting it. According to the Las Vegas Sun Wells Fargo took over Loews last June. I’m sure they MUST have their facts wrong too. http://www.lasvegassun.com/news/2010/mar/01/shining-lakeside-oasis-loses-its-luster/

      It’s amazing that the Las Vegas Sun’s article is eerily similar to mine. But I guess they don’t know what they’re talking about either.

      While it’s a nice concept and a beautiful area, the project has had so many problems and it could withstand the economic downturn. Of the 9,000 homes that were supposed to be built on about 1700 actually happened. That doomed the casino was doomed because people weren’t going to drive there when there was a locals casino much closer to where they lived.

      So I assume that you have some sort of vested interest because your arguments don’t hold water (no pun intended).

      This is not Palm Springs. The simple fact is that the Las Vegas strip has much more to offer and Lake Las Vegas just isn’t enough of an attraction regardless of how nice it may be.

      • Jenny Delasquez on


        Actually, Palm Springs is not that different of an animal, by your own argument. According to your reply, Palm Springs has little or no threat of water supply depletion. I’ll give you about 15% credit since Palm Springs’ water supply relies very little on the Mighty Colorado and Lake Mead (more on that below). You’re 85% wrong, however, since their main source of water is from groundwater. Yep, groundwater. And, while most Average Joes & Janes aren’t familiar with the mechanics of groundwater, I’m absolutely certain you’re familiar with the reason why this is a HUGE concern for Palm Springs: the city is literally sinking. So, as is typical of an indigenous desert, Palm Springs’ water supply is finite. The more water they take from their underground supply, the lower the density of matter below their beautiful emerald golf courses, 5-star restaurants, 5-diamond resorts, and guard-gated country clubs. And, it has been widely published that the city is, in fact, sinking at an alarming rate: more than a foot in the past 10 years.
        Also, it’s quite interesting that you mention the Colorado River and Lake Mead. Interesting since the Palm Springs valley has recently spent $70M to build a water collection pipeline to capture reclaimed water from (drumroll…) the Colorado River, to be completed by 2015. In addition to that, the area also has another $110M that they’re planning to spend to divert river water to anemic aquifers. Sounds like they have plenty of H2O issues of their own.
        Source: http://www.nctimes.com/news/state-and-regional/article_204d137a-d35a-5822-8bb9-a7d0b2677925.html

        Getting back to Lake Las Vegas, the water is privately funded. The majority of said funds are paid by the land and homeowners in the area, to the tune of $105/mo per homesite. With 1,800 current residences each paying $1,260/yr, the offset is $2.268M (stay with me here). Let’s say your number of $3M is accurate (I pick my battles). In addition to the $2.268M from current homeowners, the developer, Atalon Group (backed by Credit Suisse), must pay the same amount for future residences for both (1) the $105/mo masterplan fee, and (2) the City of Henderson LID semi-annual LID assessments. As you mentioned, the resort will host 9,000 homes (new estimates are appx. 12,000) at completion. So, you do the math. The lake itself is in ship-shape.

        Your “sanity” comment made me chuckle. Not because you’re correct, but because you were backpeddling at lightspeed. I could make the case that the roof of Aria is falling, by your logic, since it will fall [without maintenance] eventually.
        “The cracks appeared – literally.” Your words, not mine. I’m sure you’ll come up with some bullhockey “I meant it symbolically” explanation, but it’s painfully clear what you really meant. You meant it both figuratively and literally. The fact is that there never were any cracks, and there won’t be for at least another 10+ years.
        If you had attended Lake Las Vegas 101, you would know that the pipes below the lake don’t actually carry any lake water at all. They filter the natural runoff water from Duck Creek to Lake Mead for natural remediation, from far under the lake’s foundation. So, even if the pipes had cracked (which they did not, to be clear), the lake would not have drained.

        I am very, very familiar with the Sun’s article. And, yes, I have every reason to question its reliability. The Sun regularly reports dubious information in an effort to sell its editorials, only to quietly retract. It’s no secret that when Lake Las Vegas’ former developer foreclosed in January 2008, they owed somewhere in the neighborhood of mid-six-figures to both the Sun and Review-Journal. I find it comical that you would re-publish that information without verifying its accuracy. Isn’t that a journalist’s job? Or do those rules not apply to blogs?
        The Sun has only reported that once, and funny, I can’t find any support for this anywhere on the world wide web. If such a transition had occurred, I am absolutely certain that the Sun would have had a huge, dedicated spread about it. The truth is that the foreclosure is still in legal limbo since Loews is fighting it. I will also be writing another letter to the editor at the Sun to let them know about their “oversight.” You’ll likely see a retraction in coming days.

        A night’s stay at the hotel and a round of golf do not an area expert make. You should have done more research before publishing something so misleading, and that is reprehensible. Just admit that you published a very misguided (at best) perspective, filled with factual inaccuracies. Of course, I expected you to accuse me of having some ulterior motive. That’s your instinctual defense mechanism. You can’t debate on facts, so you accuse me of personal interests. I am merely a humble Las Vegas-born resident who loves this city. I am finding that one of my biggest challenges has become exposing the idiotic dribble spewed by misinformed and ill-intentioned self-proclaimed real estate professionals, who think too highly of themselves.

        • Again, Palm Springs IS a different animal. The Las Vegas strip is a short distance from Lake Las Vegas. Palm Springs is it’s own destination. You can make your arguments all day long, that doesn’t change the facts that Lake Las Vegas is in big trouble. I’m far from alone in my opinion that it was and is an ill-conceived idea. It’s obvious that you have a connection and are trying to defend it. Perhaps you live there or are a real estate agent desperately trying to p[rotect your territory. I’m not backpeddling from anything despite what you try to infer. You are entitled to your opinion.

  3. I stumbled across this article/blog on a Google search. I am a resident at Lake Las Vegas. While there are some issues going in Lake Las Vegas, they are no different than ANY development in Las Vegas or the country for that matter. Many of the issues going on in Lake Las Vegas are tied to mis-management and over financed every thing.

    The Falls and Reflections golf courses each have a 25 million dollar mortgage. Who could sustain with a payment that high? Nobody, anywhere. Over 150 golf courses in the United States closed in 2009. These courses are still being maintained by Carmel Land and Cattle who foreclosed on them last year. These are top 10 courses.

    They will re-open. When? Well, to further the complication, the developer “accidentally” placed the water pump house that will supply water to many Henderson and LLV residents on the Falls Golf course property. Why is this a problem? There are up to 10 million dollars of liens against the pump house. Who in their right mind would buy a golf course with a 10 million dollar lien? Nobody. The solution? Judge Riegle will be finalizing the bankruptcy on April 15/16. In the bankrupcty Carmel Land & Cattle will convey the pumphouse back to LLV, the liens will be dealt with via bankruptcy and then the pumphouse will be turned over to the City of Henderson. At that time, the golf courses will be free from any liens and Carmel will be free to sell them. Rumors are that someone has already purchased them and waiting for the bankruptcy to be finalized to complete the sale. Carmel wants to get rid of these ASAP as they are required to maintain them and not generating any money.

    Like the golf courses, the hotel and casino property were WAY over financed. The Ritz did not want to leave, Duetsche Bank pulled the plug. They are a bank. They shouldn’t be a hotel owner. The Ritz can’t manage a property that is no longer there for them to manage. As with the rest of the country, all properties have to adjust and adapt with the current economic climate. This property is too beautiful to go to waste. Contrary to what you read in the Las Vegas Sun, the Loews is doing great. They figured out how to draw hotel guests to their property. The capitalize on the lake. The Ritz never did that. I think they were too good to concentrate on Lake Las Vegas’s best asset.. the Lake. Hopefully, a family friendly more moderate priced hotel/casino will buy the property. They will thrive. 5 diamond hotels just aren’t in vogue right now. PS: The Ritz had to cancel 32 weddings planned for this spring/summer. As far as the casino, it was time for a new casino. The owner never did anything to make the casino successful. I look forward to fresh blood in the casino.

    By the way, there were no holes dug for Lake Las Vegas. A dam was simply built and the water filled in the canyon already in place. The lake was no where near draining. That was all over dramatized by the media. Richard, I can’t tell from the article if you are from Las Vegas area or just spouting out your own opinion.

    I purchased a 1 bedroom lake view condo in Sept 09 that sold for 575k in 2005. That is/was ridiculous! I bought for under 100k. That is more like it. When I don’t use it, Intrawest Hospitality rents it out for me. So far, in 7 months I’m just about even with my expenses vs rent collected. This is perfect for me! A winter vacation home and minimal cost out of my pocket.

    After all of the bankruptcy dust settles and the housing market begins to return and homes tha are more affordable begin to build, Lake Las Vegas will be a viable suburb. Lake Las Vegas was supposed to be more of residental neighborhood of 12k homes that would support the village on its own. Unforutnately, the house crisis stopped the home building in its tracks. The hotels were to be there for the golfers and vacationers who wanted to visit the desert and NOT the strip. I hate the strip, other than a show and dinner and then get out asap!

    If you’ve never been to LLV, you can’t know how spectactular this place is. A hill side neighborhood with some of the most colorful mountains in the SW. This is not a cooker cutter development. Either you get it or you don’t.

    Lastly, you cannot believe anything that the Las Vegas Sun says. They are bottom feeders. They thrive on propaganda, sensationalism and puffery. They obviously have a beef or something against Lake Las Vegas. They only report on the negative. There are so many positive things going on at the village. Free movies, concerts, great restaurants, boat rentals, all with a stunning backdrop. I was at my condo last weekend, the village and hotels were packed. The Loews was sold out and Montelago was 90 % occupancy. The bars and restaurants filled with both locals and visitors.

    Is everything perfect in LLV. No, of course not. But, it is certainly no where as bad off as the media seems to say it is. The exiting from bankrutcty next month should get things moving in the right direction.

  4. Jenny Delasquez on


    That’s okay, keep changing your strategy. First, Palm Springs was not a valid comparison due to its water supply. Since I exposed that as farce, now you say it’s because of the proximity of the Strip. I would debunk that one, too, but you’d come back with “well, the airport’s closer” or “California is in better financial shape than Nevada.” Ha.

    Of course, I would not deny for a minute that LLV doesn’t have a very long, uphill battle ahead. But, that’s where you get into trouble. If you had mentioned all of the terrible developments that have occurred in the area throughout the past few years accurately, I would have read your blog for what it would be: an opinion piece, based on facts and presented reasonably. Instead of taking from the laundry list of ammunition to fuel the above, you decided to misrepresent numerous substantialities. That’s my lonely beef with you.

    I have much less of a connection to LLV than you would like to believe. I have a tie to all of the Las Vegas metro area, and you do too. We are an infinitely transient community, with loads of future residents researching the valley from the web. Your editorial wrongfully represents this portion of the valley: “A Real Estate Oasis in the Desert Dries Up: Buh Bye Lake Las Vegas.” Exactly what part of the lake has dried? Instead of focusing on the errors of your post, you deflect to my intentions. If you ask a psychologist, you’re subconsciously (or consciously…you’ll have to ask yourself) trying to demote the area further. So, Richard, what are YOUR motives?

    And, yes, you are backpeddling, as you should. You wrote an irresponsible piece, and figured no one would call you out on it. Shameful.

  5. I don’t get it………… This “article” seems to ridicule developers and builders for building a planned community with homes, retail and various ammenities. OK, it (along with tens of thousands of other real estate projects in the latter part of this decade) failed. Perhaps it failed miserably. OK. While I don’t live in Nevada and have no vested interest in this project, I for one don’t see how pointing out how terribly bad a particular real estate project failed, without offering any advice or helpful insights into the matter is worthwhile. It seems that everyone is an expert in any number of fields when the cards are all “face up”. As a real estate investor, and more importantly a human being, when I read that story I was saddened to think of all the lives that suffered as a result of this huge financial AND emotional loss. Though I doubt that the writer of this piece will even hear what I suggest, because he is much too busy writing his “defense” to my view. Speaking as a mere mortal here, it seems to me that something passed off as an “article” on any type of website should fairly present the facts and then explore exactly what happened, why it happened and then most importantly, what we can learn from it so that we may improve ourselves in some way. If I really gave this guy an ounce of credibilty as a “writer”, the only conclusion I would draw from this piece is that real estate speculation is a sure road to financial ruin and that anyone who attempts to develop land is a greedy monster anyway. The writer seems to be thrilled about the whole thing failing. Some people bought some land and began building a very large community and during what is perhaps the worst real estate crash in American history, theirs failed too. They tried something, and it didn’t work out. OK. Well, you’ll never strike out while sitting in the bleachers . You have to pick up a bat and walk up to the plate and swing with everything you’ve got. For me personally, even after everything I’ve been through over the last few years, I would MUCH rater be down on the field with dirt on my pants and sweat on my brow, than to be watching the game from the bleachers and telling someone else what everyone down there is doing wrong. But hey, that’s just me. I’m not an expert.

  6. Paul Leblanc on

    It is so funny to read from so many peoples how far is Lake Las Vegas to the strip ! We bought a house in The Falls recently and everytime I travel to the strip, it always takes me between 22 and 25 minutes from my driveway to the Mirage Hotel ! Just a nice ride ! How long it takes to drive from the Mirage to Desert Shores or Summerlin ? Have you driven Summerlin Parkway during the traffic hours ???? From the strip, LLV is about at the same distance than Summerlin is ! How far is McDonald Highlands & Anthem from the strip ? At least 20 minutes !!!!!
    And what is a 22 minutes drive, to avoid all the traffic, noise, shops and all the crap of the strip ?
    Priceless !

    And as Bouvier said :
    “If you’ve never been to LLV, you can’t know how spectactular this place is. A hill side neighborhood with some of the most colorful mountains in the SW. This is not a cooker cutter development.”

    • Paul – I am considering buying a house in the Falls. I’ve been reading articles on the LLV bankruptcy and saw that the T-16 LID (which includes Bella Fiore & the Falls) is one of the issues holding things up. It sounds like the LID money for that area was very poorly managed and there are now delinquencies and/or there is no money left. Have you heard about any special assessments, past or present, resulting from this T-16 LID issue? I really want to purchase this house, but don’t want to get into a situation where I am faced with assessments due to the T-16 LID issue. If you know anything about this, I would appreciate any insight you can share. I am also interested in knowing if you are happy with your decision to purchase a home there now that you’ve been there a while. Thank you.

  7. Hello everyone,
    It’s interesting to read the blog, the arguments, etc., but none of that matters to me because I was one of those that bought into the dream in 2006 and now I’m financially ruined. It seemed to me like a great idea, it had first class amenities, celebrities were everywhere, the lake was nice and I loved the golf courses. Then it all went down the toilet faster then we could react and now we’re stuck. I paid….please don’t ridicule me….575K for a 3 bedroom 1600 sq ft condo as a vacation home for me and the wife, used my retirement money, and got about a year to enjoy it. I still own mine and we rent it now and then, but like the other gentleman pointed out that bought one more recently…they’re selling for about 150K, 2 of the 3 golf courses are gone….and I paid a club membership that’s now worth nothing because the only course left is now municipal. I bought the dream, the glitz, saw the big named celebrities, the fancy resorts, Ritz Carlton, Westin, the nice casino……all gone, along with my retirement money. Now I’m back in the workforce trying to get by and I can’t sell this thing….in some way, I keep dreaming that this place will be rescued and the prices will climb again….but I keep waking up to the same reality. It’s ironic, I now rent a luxury condo from a builder near where I work that can’t sell his units…..built in 2008 and priced at 700K…..today worth about 250K at most…..at least I wasn’t the only one fooled. Never saw it coming…..

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