On the outskirts of southern Henderson, near large swaths of open desert and a small airport buzzing with private planes, the Inspirada community has been a prime example of the real estate market’s boom, bust and recovery from the depths.
A consortium of homebuilders launched the project during the go-go years with big plans. They wanted to build 13,500 homes, a casino resort, retail, restaurants, parks, schools and trails, all on about 1,900 acres.
They opened the community in early 2007 and built hundreds of homes, packed together in subdivisions. But after the economy collapsed, the developers squabbled with each other over halted land sales, and lenders claiming to be owed some $330 million pushed the project into bankruptcy in 2011. Work largely ground to a halt.
Now, after a years-long lull, things are picking up again.
At the site off Volunteer Boulevard across from Henderson Executive Airport, work crews are building homes, parks and roads, and installing utilities and landscaping.
Inspirada, with about 1,350 homes so far, is currently planned for 8,500 homes and is nowhere near completion. Also, if it gets fully built, that likely wouldn’t happen for years.
During the boom era, developers built houses en masse without buyers in place. But today, they typically break ground only after a buyer steps up, a slower, more cautious approach.
Valleywide, new-home sales have climbed from the depths of the recession, and prices have soared the past year or so. But business has slowed dramatically this year as would-be buyers, saddled with weak credit, flat wages and sticker shock, can’t pay the high listing prices.
Southern Nevada builders sold 3,733 new homes this year through August, down 26 percent from the same period in 2013, according to Las Vegas-based Home Builders Research.
“The housing market continues to ‘ho-hum’ its way through 2014,” company President Dennis Smith wrote in a recent report.
Inspirada’s sweeping commercial component, dubbed Inspirada Town Center, is no longer in the plans. The site, just west of the housing developments, was supposed to be anchored by a hotel-casino with up to 1,000 rooms as well as retail, restaurants and a convention center. But the land remains empty and is owned by a large group of investors — including Station Casinos — who don’t plan to build anytime soon.
Other amenities are still on the table, though. Inspirada’s developers have set aside land for four public elementary schools and one public middle school, although Clark County School District officials would decide when to build them, said Rob McGibney, Las Vegas division president for KB Home, Inspirada’s largest landowner.
In the meantime, McGibney said, his group is trying to lure a charter school. Some schools have said they can open there within the next two years, he said.
Before the community stalled, Inspirada’s development group was led by Focus Property Group and included KB, Meritage Homes, Woodside Homes, Toll Bros., Beazer Homes, Kimball Hill Homes and Pardee Homes.
Four remain. KB controls 73 percent of the project; Toll has about 15 percent; Pardee, 10 percent; and Beazer, the rest.
After two years of talks, the group reached a new development agreement with the city of Henderson in January. They resumed roadwork and other projects afterward.
At an event Saturday, the developers will open two parks, Capriola and Potenza, and offer pet adoptions, sports clinics with UNLV athletes, skateboarding demonstrations and tours of model homes.
Rob McGibney, left, division president of KB Home Las Vegas, and Klif Andrews, Southern Nevada division president of Pardee Homes, are shown in the backyard of a model home at the Inspirada master-planned community in Henderson Monday, Sept. 29, 2014.
McGibney and Klif Andrews, Las Vegas division president for Pardee, recently sat down with VEGAS INC to talk about the project. Edited excerpts:
How are things going here?
McGibney: Around the valley, we’re starting to see the first-time buyer come back; we’d obviously like to see them come back in droves, but we’re seeing demand for higher-end, move-up homes. At Inspirada, we’ve just been open for about a month with sales, but as far as KB goes, we opened three new product lines, and they’ve been pretty brisk.
A lot of homes here are attached row-houses and townhouses, or two-story, single-family homes squeezed onto lots with small yards. Will you still do high-density building?
McGibney: We’ll still be doing some higher density, but one of the things we worked to change with the new design guidelines is the ability to do more traditional, single-story homes. Most of the new ones have full-size backyards.
Andrews: There’s a definite shift to more conventional, family-style homes, while still keeping amenities that were part of the original design. We’ve got this really strong park element in the center of the community, connected to the neighborhoods, which has been a huge positive.
When Inspirada opened, why was the plan to build high-density?
McGibney: Back in ‘04, ‘05, ‘06, a lot of the market went to higher-density homes, just because land prices had gotten so expensive.
If you had wanted to build the homes you’re doing now, would they have sold for a lot more?
Andrews: They weren’t allowed. You couldn’t build a conventional house with a three-car garage to the street under the original design guidelines. We had to renegotiate the whole design with the city of Henderson; they understood that wasn’t what residents and buyers wanted anymore. You still have a great design for the community, but we’re going a little less dense, a little more focused around having driveways and yards because that’s absolutely, positively something our buyers demand.
McGibney: Our goal, going into the redesign, was to keep all the things we thought — and that buyers told us — were great about the community: the connectivity, it’s a walkable community, the parks. We kept all that. The one major change we made was the homes.
You mean moving away from high density to more space?
McGibney: At least a better mix.
Andrews: The original village is very pretty, but parts of it are kind of goofy to live in. There are long rows of alleys behind pretty expensive homes; that buyer drives a big car, or a big SUV. How the hell do they get in and out of their garage? How is that not an issue?
What are some of the communal projects you’ve been doing? I believe they all started up again within the last 6 to 8 months.
McGibney: Pretty much. After we got our development agreement approved, we started construction on the parks as soon as we could, in February or March. Only one park had been built before that.
Andrews: Three parks are under construction, and two will be completed this week. We’ve also been doing utilities — water, sewer — and roadways, huge landscape construction, trails.
Across the valley, new-home sales are down about 25 percent year-over-year. Does that worry you guys?
Andrews: We’ll catch up by the end of the year. Sales are actually slightly ahead of last year’s pace, in terms of new people who we put under contract. Last year we were busy at the beginning of the year and got very slow at the end of the year. I think overall, though, the market is healthier than a year ago. At that time, the market really cooled off. We’ve regained that momentum. A year or so ago, we saw a lot of cheap, resale inventory get blown through and purchased by investors. Now, you’re seeing regular families list their homes they’ve been in for 10 years and they’re ready to buy a new one.