Desert now, but Henderson’s Bermuda Road corridor is ripe for development
The outer edges of southwest Henderson could be seen as the Las Vegas Valley’s Bermuda triangle: a triangle-shaped area with Bermuda Road running through, it’s a place where big, ambitious real estate projects have gone to die.
But that hasn’t stopped other developers from forging ahead this year with plans to build out one of the last, well-located chunks of desert in the region.
Bordered generally by Las Vegas Boulevard to the west, Saint Rose Parkway to the north, Executive Airport Drive and Via Inspirada to the east, and extending south beyond Larson Lane, the area is mostly raw land, save for some homes and commercial properties, including the M Resort, a Las Vegas Valley Water District facility and the Lion Habitat Ranch. Real estate project boards and “for sale” signs — some of which are warped, peeling or covered with graffiti — dot the landscape, reminders of failed and ongoing efforts to sell and develop land there.
One sign promotes a 126-acre mixed-use development with 5 million square feet of “lifestyle living.” But the $2 billion project, City Crossing, went bankrupt in June 2008 and was never built.
Another sign, near the M, is warped and punched with holes. It advertises a 0.63-acre parcel that has been up for sale for at least four years and is largely inaccessible from nearby roads.
“There’s no obvious reason to buy it,” said listing broker Ben Millis, a director with Newmark Grubb Knight Frank.
Overall, the area has flaws but also untapped potential, especially for residential and industrial projects, real estate executives say.
It’s off Interstate 15, giving commuters easy access to the Strip and to the 215 Beltway, and letting truck drivers avoid valley traffic when hauling goods to and from Southern California, making their trips that much faster.
There’s also plenty of space to build.
“This is the only area (where) we can really grow,” said Tracy Foutz, Henderson’s assistant director of community development.
There’s no guarantee the dirt will be paved over. With the homebuilding market improving — but still a shadow of its former self — and little commercial construction in the valley, no one expects a rush of projects to the area anytime soon. What’s more, two commonly suggested uses for the site don’t seem to mix well, as it could be hard to find people who are willing to live near warehouse depots.
Nevertheless, one project is under construction, at least one is on the drawing board and another is in the works.
FedEx Corp. is building a 300,000-square-foot distribution center off Executive Airport Drive, the first piece of what could eventually be a 14-building industrial hub known as the South15 Airport Center. The Memphis, Tenn., shipping giant started construction in May on the FedEx Ground facility and is expected to finish in January.
The company likes the site in part because of its proximity both to major highways and customers’ distribution centers, a spokeswoman has said.
Meanwhile, national homebuilder Lennar Corp. has submitted plans to City Hall to build what appears to be 482 homes just north of the FedEx project. Additionally, Las Vegas developer Joe Kennedy is laying the groundwork for a mixed-use project next to Lennar’s site. He wants to rezone about 114 acres of mostly vacant land to allow commercial and residential construction, city records show.
Foutz said city staffers are not convinced that housing tracts are the “best use” for land near industrial sites and Henderson Executive Airport, just east of the triangle.
Jeremy Parness, Las Vegas division president for Lennar, said that although communities such as Seven Hills are in the airport's flight path, his project site is not even in the "noise zone.”
City staff initially recommended the Planning Commission deny Kennedy’s zoning request, but Kennedy said he has made some changes to his proposal. Among other things, he now wants a bigger buffer zone between the new homes and Executive Airport Drive, a roadway that might be used by trucks going to and from the FedEx facility.
The Planning Commission is scheduled to consider his plans on Nov. 14.
Millis, for one, said the area is ripe for housing because of the available land and proximity to both I-15 and high-end communities such as Southern Highlands, Anthem and Seven Hills. But, he said, it’s a tough sell for commercial developers: Until new homes arrive, strip malls and offices are unlikely to be built.
Those developers took a beating in recent years because during the housing boom, they flooded emerging neighborhoods with projects. When the economy tanked, residents stopped shopping, retailers and office tenants went out of business, and many developments were lost to foreclosure.
Local developers have learned their lesson — for now, at least — and they largely avoid speculative projects.
“That behavior was punished greatly during the recession,” Millis said.
Additionally, nearby Eastern Avenue is one of the most densely concentrated shopping areas in the valley, a corridor filled with shopping centers, big-box stores and restaurants. That limits retail development on Saint Rose Parkway for the time being, said Juliet Cos. principal John Stewart, whose development group owns about 35 acres of the former City Crossing project site.
“For retail to be viable along Saint Rose Parkway, you need a lot more residential development,” he said.
Developers have had big plans for the area, though most of their ideas flopped.
City Crossing was supposed to have housing, offices, retail and hotels but never advanced beyond site work. Its developer, Bill Plise, filed for personal bankruptcy last year, listing $506 million in liabilities, including at least $194 million of personal guarantees for City Crossing project loans. He listed only about $4,700 in assets, including a 9 mm Glock pistol valued at $250.
The project site is now chopped up among several owners who acquired the property out of foreclosure, including Stewart’s group, a wealthy Salt Lake City family that grabbed 44 acres, and local developer Eliot Alper, with about 25 acres.
Alper, owner of Spacefinders Realty, had sold almost the entire project site to Plise and then invested about $50 million in the project. Alper said he obtained a $16 million judgment in connection with the deal but hasn’t collected a dime.
Plise could not be reached for comment.
A few years ago, Texas developer Chris Milam laid out plans to build an indoor arena and three stadiums south of the M Resort. The project was expected to cost far north of $1 billion.
Speculative, multivenue developments are practically unheard of in the sports world, as they’re almost impossible to finance. Still, the Henderson City Council in September 2011 unanimously approved a preliminary project agreement with Milam’s group and gave its full support to selling the 485-acre, federal government-owned project site.
“I’ve said it all along: What community, what mayor wouldn’t want a project like this in their city?” Henderson Mayor Andy Hafen said in April 2012, after a council meeting in which Milam declared project financing was fully approved.
In the end, nothing was built, no teams committed to moving to the planned complex, the financing fell through and the city of Henderson sued Milam’s group this year for allegedly trying to flip the project site to other developers. As part of a court settlement, Milam is banned from doing business in the city.
Kennedy, president of Las Vegas-based J.A. Kennedy Real Estate Co., sought to build a 68-acre shopping and office complex, known as Saint Rose Square, just east of Executive Airport Drive. The Henderson City Council approved the plans in October 2007. That project also was never built.
According to city records, the proposed 29-building project was “designed with a ‘downtown core’ concept, with buildings and streets that emulate an old-fashioned downtown feel.”
Kennedy said he lined up deals with big-box retailers for the center, but “with the collapse of the economy, those deals also collapsed.”
In addition to his rezoning efforts, Kennedy is trying to sell 70 acres of land in the general area for $60 million. The company has some signs posted in the area, one of which says "For Lease." Two signs had been hit with graffiti.
Another proposal that flopped in recent years was Sorano Commercial Village, just east of Saint Rose Square. Plans called for a 21-acre shopping center with underground parking and a turf recreation area, according to city records.
The project site was later seized through foreclosure, property records show, and nothing was built. Sunbelt Development & Realty Partners, a brokerage firm, is now trying to sell the land for $6.15 million. Listing agent Bill Lenhart did not respond to a request for comment.
Despite the setbacks, real estate veterans say the area could be more fully developed one day.
Broker Rich Shuman, owner of the Heritage Group, has been trying to sell about 10 acres near the M Resort for a client for two years. He’s had just six serious inquiries in the past year.
Overall, he said, there’s a “lot of chatter, but not a lot of activity” in the area.
“It just seems like an obvious spot to develop,” he said.