The resurrection of real estate developer Jim Rhodes

L.E. Baskow

Las Vegas developer Jim Rhodes looks on as gypsum is processed at the Blue Diamond Gypsum Mine out near the Red Rock Canyon National Conservation Area on Wednesday, April 16, 2014.

Jim Rhodes is heading toward his namesake homebuilding project in his white Cadillac Escalade, littered with empty chewing gum packets, Marlboro cigarette packs and Red Bull cans.

He drives past the hillside, Hollywood-like sign framed by palm trees, blaring in huge, white letters “Rhodes Ranch,” and turns into the main entrance, just short of Rhodes Ranch Parkway.

He wants to show off the development, which he lost to lenders during the recession. And even though his name is everywhere, he’s stopped as he tries to sneak past the security gate and is instructed by a guard to check in — another reminder that Jim Rhodes’ heyday is over.

He was once a big-time builder riding the valley’s torrid wave of growth. With little more than a high school education, he sold thousands of homes in Las Vegas, earning billions in revenue and letting him live the flashy lifestyle he craved in his youth.

His projects included the 2,300-home Rhodes Ranch in southwest Las Vegas, the 2,000-home Tuscany Village in Henderson and the 100-acre Spanish Hills, a luxury community in the southwest valley. He has built three 8,000-square-foot mansions for himself, bought Bentleys and was married to an eye-catching woman described by a Las Vegas Sun columnist as an “effective bikini model (who) knows how to throw back a shot of tequila.”

But Rhodes also has been sued by former lenders and partners who, among other things, accused him of reneging on deals and ripping them off. He has admitted to making illegal campaign donations to Nevada politicians and ignited community outrage by planning thousands of homes on a scenic hilltop just outside Red Rock Canyon National Conservation Area.

Rhodes rarely gave interviews while the media covered his legal woes and development fights. Most stories, he told The Sunday, “made me look like Charles Manson.”

His empire crumbled under the recession with a massive bankruptcy five years ago, but he’s still making millions.

He is mining gypsum on Blue Diamond Hill in the southwest valley, selling the mineral to farmers and drywall-makers, and says he plans to buy gold and gypsum mines in Nevada and other states. In 2008, he founded the development firm Harmony Homes, which has been selling about 400 houses a year. Rhodes also is building a 25,000-square-foot mansion for himself, perched on a hill overlooking the 215 Beltway in southwest Las Vegas.

However, his most ambitious — and unusual — project in years is in neighboring Arizona, where he once envisioned building massive housing developments in Mohave County. He is now farming the land instead.

Using proceeds from Harmony, he has spent about $30 million on tractors, rippers and other equipment, and hired dozens of consultants, contractors and field hands to drill for water, dig trenches, lay water pipeline, plant seeds and harvest crops. He has been growing sweet corn, cucumbers, watermelon and alfalfa, among other things, and running cattle. He’s the only farmer around and, he said, gets to “play (with) real Tonka toys.”

“I’ve got like 60 or 80 of these things,” said Rhodes, as he climbed into a Case Quadtrac 600 tractor, tossing his cigarette as he got in the cab.

After the Red Rock uproar, he opted to trade his hilltop land for property elsewhere — maybe near the desert hamlets of Jean or Sloan, south of Las Vegas. He talks about homes, industry, schools.

That’s just like him, Rhodes’ friends say: a man driven to turn ideas, no matter how wild, into reality.

But they also try to reconcile Rhodes’ legal baggage.

Attorney W. Owen Nitz, who has known Rhodes’ family for decades and represented him in court, said Rhodes is a “good product” of Las Vegas, a gutsy pioneer who does his “very best to obey the law. He may occasionally find a shortcut. … He’s been accused of many things for whatever reason.”

Driving atop the beat-up Blue Diamond Hill, Rhodes bristled at his reputation.

“What have I ever done wrong?” he asked.

• • •

Rhodes is 55 years old, tall, and somewhat jittery and rubbery-limbed, almost Gumby-like. He drives fast off-road and has no qualms taking his hands off the wheel to demonstrate something. He has married four times, including in November to a woman almost half his age.

He smokes Marlboros, drinks Red Bull and pleads ignorance or gives conflicting details about his own business. He doesn’t know where he bought his cattle, he said, because “my rancher guy did them.”

“People say he’s got a little bit of ADD,” Harmony Homes President Robb Beville said. “He has so many things in his head, he wants to get it all out.”

Rhodes grew up in Las Vegas and went to Clark High School. He mowed lawns and worked at the Las Vegas Country Club, washing tennis courts and towels, and stringing rackets. Along the way, he met business moguls at the club.

That wasn’t his only brush with wealth. His dad, Leonard, had good friends in real estate, and while he did well as a dentist, he lamented the lucrative land-investment deals he passed on.

His development friends owned planes and boats, and the younger Rhodes grew up wanting those things, too.

“My dream was to buy a Rolls-Royce or a Bentley or something, just to have it,” he said. “Not that I wanted to drive it — just that I was able to do it.”

Around the time he finished high school, Rhodes became a carpenter. After a few months working for others, he started a one-man framing company. His mom bought him a power saw and extension cords, and he rode his bike to job sites. He had bought a 1971 burnt orange hard-top Corvette but, while living with a friend, sold it and lost all but $80 after hours of blackjack at the Mint.

He bid jobs as a framer but didn’t have a crew, so he poached workers from car washes by offering more money, his brother John Rhodes said. Business grew quickly, and by age 20 or 21, he was piling up contracts, had about 100 workers and was earning up to $100,000 a year.

Emboldened, in the early 1980s he bought a vacant lot in the new Spanish Trails development. He started building a house without a buyer ­­— and sold it before construction was finished.

His appetite grew as he built more custom homes. In 1990, he started buying land for Spanish Hills, and by 1996 he assembled the land for what would become Rhodes Ranch, a 1,300-acre master-planned community on Durango Drive and Warm Springs Road on what was the fringe of town. During the boom years, he sold 500 or so homes a year.

By 2009, Rhodes reportedly had sold more than 6,000 homes in the valley and raked in $2.4 billion in revenue.

Along the way, his legal problems swelled as banks, business partners and others accused him and his companies of foul play in dozens of lawsuits.

“He’s learned on his own,” John Rhodes said, “and I think that’s sometimes what’s got him into trouble. He didn’t really have that mentor to guide him through ... some of the land mines.”

In one case, in the 1990s, Rhodes invested in a project to develop 135 acres near Sam Boyd Stadium. He proposed building at least 600 single-family homes and projected $10 million in profit, to be split with his partners, court records show.

However, he failed to pay his partners all they were owed, and used project funds to pay at least $1 million in excess fees to one of his own companies, an arbitrator found.

“That was a lesson to me about who Mr. Rhodes is,” said Al Marquis, an attorney who worked against Rhodes in the case.

He also got wrapped up in political scandals. The Federal Election Commission reached an agreement that called for him to pay almost $150,000 in fines for arranging $27,000 in illegal donations for former Clark County Commissioner Dario Herrera’s failed congressional race in 2002 and $10,000 in illicit funds for Sen. Harry Reid. Federal investigators cleared the politicians of wrongdoing and ordered them to give the money to the U.S. Treasury.

Eventually, Las Vegas’ white-hot housing market collapsed, and Rhodes filed for Chapter 11 bankruptcy protection for the Rhodes Cos. in spring 2009.

He claimed his company had just $2.5 million in assets and about $400 million in liabilities, and reached a deal with his lenders in fall 2009 to give them control of the unfinished Rhodes Ranch and Tuscany Village. And in late 2012, citing the housing market collapse, Rhodes returned to the state of Arizona 1,000 acres of land near Phoenix that he had bought at auction for residential development. He said he lost $18 million on the deal.

• • •

The community of Blue Diamond, an isolated pocket with a few hundred residents off State Route 159 20 miles southwest of the Strip, seems an unlikely location for a showdown with a big developer like Rhodes.

It was built as a mining town in the 1940s for workers at the nearby Blue Diamond Hill gypsum mine and today boasts an elementary school, post office and baseball field clustered in the center. Community bulletin boards are scattered about, there is virtually no crime and residents know and talk to one another.

“Those are the people who don’t like me,” Rhodes said while driving by on his way to the gypsum mine.

Gypsum is a powdery mineral with a range of uses — it’s added to wallboard, soil and surgical casts, among other things — and the mine on Blue Diamond Hill had been in operation since the 1920s.

Rhodes bought the mine for about $50 million in spring 2003 and tabled the mining operations not long after. With almost 2,500 acres under his control on the hilltop, he sought to build 5,500 houses, pitching the project as an ideal place to live, work and befriend neighbors.

“It looked like a good project to me,” said Robert Lee, an Arizona builder. “I would’ve whacked the top of it off and built houses.”

Locals, though, protested Rhodes’ plan at community meetings and government hearings, saying it would tarnish the area with dust, noise and trash. Siding with them was one of Rhodes’ ex-wives, Glynda Rhodes, who showed up at a fundraiser with a “Save Red Rock” T-shirt bedazzled with rhinestones.

In 2003, state and Clark County lawmakers effectively barred landowners from developing high-density residential projects or commercial buildings in a 46,000-acre swath of land in and around the conservation area. Rhodes sued, saying they unfairly targeted his project.

In 2010, county commissioners reached a settlement with Rhodes that would let him develop the land with strict oversight. Early last year, the Nevada Supreme Court ruled the state law was unconstitutional, as did a federal judge last May.

But by then, Rhodes had apparently given up on his construction plans, looking to swap the property with the federal government for other land. A few weeks before the Supreme Court ruling, county commissioners voted 6-1 to support a trade.

Commissioner Chris Giunchigliani, who cast the dissenting vote, said local developers sometimes buy “lousy pieces of land” and then expect a better deal once there’s an uproar.

“I don’t think it fixes anything,” she said of the swap.

Rhodes said he hasn’t negotiated with the U.S. Bureau of Land Management to pinpoint which land he’d get. For now, he’s mining the hill through his company Gypsum Resources. He said he sells about 1 million tons of gypsum a year.

To collect the minerals, his crew dynamites the hill to break up rocks, then hauls the chunks to crushers.

“Every guy’s got a dream to blow sh** up,” he said.

• • •

Rhodes now hopes to grow his next fortune two hours from Las Vegas, in Mohave County, Ariz.

He started buying land there about 2003, snatching close to 80,000 acres for $300 million, much of that in the Red Lake and Golden Valley areas outside Kingman.

Among other things, he pitched a 33,000-home community in Golden Valley called Pravada, and more audaciously, a project in Red Lake that called for 211,000 single-family lots — essentially, a midsize city he’d build from scratch.

Rhodes ended up building only four model homes at Pravada and nothing in Red Lake, as the recession quashed his plans.

Sitting on tens of thousands of acres, paying property taxes and not earning a dime, he talked in 2009 of smothering some of his land with solar panels, but that plan fell through, too. So he struck out in a new direction: agriculture.

Through his company Kingman Farms, Rhodes began farming about a year ago. He is working about 640 acres in Red Lake and another 640 in Golden Valley, he said. He had to build the operations from scratch.

Since November, Rhodes has filed at least 26 applications with the Arizona Department of Water Resources to drill for water in the area. Rhodes says his workers have installed 20 million feet or more of underground pipeline in Red Lake to ferry water around the farm and another 7 million to 8 million feet in Golden Valley.

Lee, the builder, said Rhodes is “raping our planet” but credits him for bringing commerce to an area wracked by unemployment.

“I’m not saying I approve ... I’m just saying he’s good at what he does,” Lee said. “That, I respect.”

At first glance, farming the Arizona desert seems doomed to fail, but Rhodes insists the area is fertile.

Red Lake is an enclosed valley that traps rainwater, and Steve Schmidt, Rhodes’ farm manager, said the land is moist, has good water retention and no salinity. Because the “virgin dirt” had never been farmed, it’s not worn out and doesn’t carry disease, he said.

“There’s no crop that we want to grow that we can’t grow,” Schmidt said.

Locals have complained that Rhodes is depleting the water table — “He acts like it’s not a desert,” a Mohave County employee said — but under state law, he can take as much water as he wants.

What concerns him, Rhodes says, is that there aren’t more farms in the region. Those in the county are not nearly as lucrative as farms elsewhere in Arizona.

The project now gets most of Rhodes’ attention, and he’s slashing his homebuilding plans in Southern Nevada to pump Harmony’s sales revenue into his new venture.

“We should be buying more land with it,” Beville said. “But he’s been sort of redirecting it.”

• • •

Rhodes usually drives to the farm five days a week from Las Vegas, and his sons work there. Rocky, 18, operates field equipment and Michael, 24, supplies fuel through a business he owns.

At times, Rhodes dismisses his roughneck Arizona farm crew — “Why do you think people do this type of work, for the most part?” he asked. “Couldn’t get that valet parking job at Wynn,” he said — but he also describes them as blue-collar everymen who give an “honest day’s work for an honest day’s wages.”

On a recent visit to Red Lake, he stopped his truck several times to show off his high-tech irrigation system. At one point, he went into a trench to inspect some pipes. He flicked aside a cigarette to focus on the task at hand. When done, he picked it off the ground and smoked it a little more, then tossed it for good before hopping back in his truck and starting the ignition.

The cigarette landed in the dirt, next to an empty Red Bull can.


Rebecca Clifford-Cruz contributed research to this report.