John Lee, mayor of financially strapped North Las Vegas, got a belated Valentine’s gift last month.
Developers laid out plans at an April 16 city council hearing to build the long-delayed, bankruptcy-plagued Park Highlands community, saying they’d build 15,000 homes in two phases starting by early 2015.
The project near Aliante Parkway and the 215 Beltway is expected to cost $3.2 billion over 15 years of construction. If all gets built, it will make the sprawled-out valley only more stretched, but the project is economic love that North Las Vegas, with its junk bonds, budget shortfalls and insolvency warnings, sorely needs.
Lee, perhaps trying to get credit-rating agencies off his back, said that “Investment bankers are coming back into this valley saying ‘We believe in this region again.’ ”
But that faith is not without risk.
Southern Nevada’s home construction market is off to a weak start this year, with builders selling about 1,300 new homes in the first quarter, down 22 percent from the same period last year, according to Home Builders Research.
If things were better, we’d get streams of newcomers looking for homes and locals would be getting pay raises. But wages are largely flat, and hiring is tepid at best.
Still, if any place needs a shot of business development, it’s North Las Vegas.
The city grew rapidly during the boom years, but after the bust, property tax revenue plunged 70 percent, city managers slashed almost half the workforce, its bonds fell to junk status, and the city council declared a fiscal emergency.
Its housing market is probably the worst in the valley, too. Among other things, its rate of underwater homeowners (42.5 percent) is more than double the national average and higher than Southern Nevada as a whole, which itself is worst in the country among major metros, Zillow says.
Park Highlands, at almost 2,700 acres, typified North Las Vegas’ insatiable, yet doomed, hunger for growth.
A consortium of builders bought the site at auction in 2005 for $639 million. Plans called for schools, a fire station and 130 acres of parks and trails. But before anything was built, the housing market collapsed, the project went bankrupt twice and investors bought land there for a pittance. A group led by investment firm KBS bought 1,375 acres — half the site — out of bankruptcy for just $21 million.
Repo men have been pounding on doors all across North Las Vegas the past few years. If Park Highlands gets built, other projects should follow — and the repo crews won’t have to stop at City Hall.