Are the wealthy fleeing? ‘It all collapsed,’ says businessman who lost millions
Las Vegas man featured in national report shares story of economic downturn
Courtesy of Luxe Estates Collection
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When Eric Petersen came to Las Vegas from Northern California in his Volkswagen van 20 years ago, he quickly learned it was the land of opportunity.
Calling himself broke in 1991, the now 44-year-old Petersen said he built his wealth into the low nine-figure range. The economic downturn and collapse in the real estate market has cost Petersen 80 percent of his wealth, and he’s had enough.
“I’m not long to lose any more money,” Petersen said Friday. “I’m getting out with some.”
Petersen, who was recently featured in a Bloomberg story about the wealthy leaving Las Vegas mansions, just left his.
Bought in 2004 for $14 million, Petersen sold his 11-acre estate built by Prince Jefri Bolkiah, brother of the Sultan of Brunei. His sales price was $15 million after it was listed last year at $37.5 million.
The new owner is Treasure Island owner Phil Ruffin, who knows something about buying value. No real estate agent was used in the transaction.
Petersen made his money making referrals to brokers on commercial real estate deals and operated a catalog merchandising company he shuttered in 2008.
“I was in the right place at the right time and made a lot of money in real estate and subprime credit,” Petersen said. “It all collapsed, and I’m recovering as much as I can.”
Petersen liquidated four other residential properties he owned in Las Vegas and has commercial real estate holdings of office and retail-mixed use, plus a hotel he plans to dispose of. He said the decline in real estate values has taken a bite out of his profits.
But it’s his former mansion he bought in 2004 that has gotten public attention. Petersen said it’s costly to maintain and he doesn’t need as much space since he’s been dealing with health issues.
“Before, you could entertain and hold networking parties and do business deals. It was a storefront as much as a place to live, but there’s nothing going on today.”
Since he bought it for $14 million seven years ago, Petersen said he’s put about $20 million into the property to improve it. It has $6 million in landscaping alone, featuring a rose garden with 2,500 to 3,000 roses that blossom each year.
If someone were to replicate the home today, Petersen estimated it would cost $60 million for construction and the land.
The property on Tomiyasu Lane has more than 71,000 square feet in building space with 18 bedrooms, nine bathrooms, an 11-car garage and a 10-stable horse stall. It has an 80-foot-by-40-foot swimming pool, a tennis court, indoor basketball court, gym, sushi bar, disco, formal ballroom and $1 million office.
The mansion is a combined 50,000 square feet with two separate buildings that are connected by an underground tunnel, Petersen said. It has eight structures, including two guesthouses.
Although he has a home in Beverly Hills, Petersen said he plans to buy another house in Las Vegas at some point because of his business interest. He will rent for now.
Petersen said he still loves the city but misses the old Las Vegas.
Casinos no longer make the little guy feel like the big guy, he said. Other trouble on the horizon, Petersen said, is that Macau will have the same effect that riverboats and Native American casinos are having on Las Vegas.
“We have lost our competitive edge because gaming is everywhere, and the American people don’t need to come here to gamble any longer," Petersen said.
With gaming slowing down, Petersen said that will make it more difficult for the Las Vegas economy to recover.
“It’s as overbuilt as a fat lady at the circus is overweight,” Petersen said. “If I had any answer, I would have struck around. I can make my money back elsewhere and faster than sitting in Las Vegas hoping for something to change ... The house is a testament of what happened to Las Vegas. The wealthy are fleeing Las Vegas because nothing is left.”