Lake Las Vegas Resort

Henderson, Nevada

Project Type: Resort/Second-Home Community

Volume 37 Number 15

July–September 2007

Case Number: C037015

PROJECT TYPE

Developed by Transcontinental Properties, Inc., Lake Las Vegas Resort is a resort community located ten miles (16 kilometers) southeast of Las Vegas, Nevada, that is centered around a 320-acre (129.5-hectare) manmade lake. In addition to the lake and other open space, this 3,592-acre (1,454-hectare) project features two luxury hotels; several golf courses; a town center with shops, restaurants, and a casino; and an array of housing types—ranging from single-family homes, townhouses, and condominium units to fractional- ownership flats—that total 8,900 residences. Conscious of its impact on the environment, the community uses lake water to irrigate the golf courses and common-area plantings and encourages the use of nonautomobile transportation.

LOCATION Resort Area

SITE SIZE 3,592 acres/1,454 hectares

LAND USES Resort Hotel, Casino, Golf Course, Single-Family Residential, Multifamily Residential, Townhouses, Lake, Open Space

KEYWORDS/SPECIAL FEATURES

 Hotel-Retail Development  Resort/Second-Home Community  Lakefront

WEB SITE www.lakelasvegas.com

PROJECT ADDRESS

1600 Lake Las Vegas Parkway Henderson, Nevada

DEVELOPERS/OWNERS

Transcontinental Properties, Inc., a subsidiary of Transcontinental Corporation Santa Barbara, California www.lakelasvegas.com/aboutus_history.asp

Bass Family Interests Fort Worth, Texas

LAND PLANNERS/DESIGNERS

Berkus Design Studio Santa Barbara, California 805-963-8901 www.berkusdesignstudio.com

Peridian International, Inc. Newport Beach, California 949-675-2445 www.peridian.net

David Jensen Associates, Inc. Denver, Colorado 303-369-7369 www.davidjensenassociates.com

ENGINEERS

RBF Consulting Las Vegas, Nevada 1-800-479-3808 www.rbf.com

Kimley-Horn and Associates, Inc. Las Vegas, Nevada 702-734-5666 www.kimley-horn.com

GENERAL DESCRIPTION

In a region with many world-class resorts, Lake Las Vegas Resort (LLVR) stands out for its waterfront setting. Located about ten miles (16 kilometers) southeast of Las Vegas in Henderson, Nevada, this destination resort includes a 320-acre (129.5-hectare), privately owned manmade lake at its center that serves as a design focal point as well as a recreational amenity. In addition to the lake, the resort comprises an array of housing types, resort hotels, golf courses, and a town center with shops, restaurants, and a casino. Lake Las Vegas Resort encompasses 3,592 acres (1,454 hectares) of land, much of it preserved as open space.

SITE AND BACKGROUND

The Clark County area is one of the fastest-growing regions in the United States, with the sixth-largest school district in the country. Henderson has a desert climate, with an average of four inches (10.16 centimeters) of rainfall per year and average daily temperatures ranging from the 50s Fahrenheit (10 to 15.5 degrees Celsius) in winter to over 100 degrees Fahrenheit (37.7 degrees Celsius) in summer.

Bureau of Land Management (BLM) property and the vast Lake Mead Recreational Area surround the development on three sides, with Lake Mead located two miles (3.2 kilometers) to the east. The project occupies a visually dramatic site with the aforementioned lake as the focal point and rugged hillsides and outcroppings serving as a backdrop. Beyond the hills, the views are of desert landscapes, the Las Vegas Strip, and Lake Mead.

DEVELOPMENT AND FINANCING

In the mid-1980s, Ronald F. Boeddeker, president and chairman of Transcontinental Properties, Inc., was inspired by a trip he took to northern Italy’s Lake Como. He envisioned a lake surrounded by a Mediterranean-style resort that would include homes, golf courses, hotels, gambling, restaurants, and boutiques, a vision that has become reality. In the fall of 1988, construction began on the 150-foot-high (45.7-meter-high) dam that created Lake Las Vegas. By 1991, the dam was completed and development around the lake could start. Custom-home lot sales commenced in 1993, along with the construction of the first golf course, SouthShore Golf Club. The first two hotels, the Hyatt and Ritz-Carlton, opened in 1999 and 2002 respectively. By 2003, development had accelerated, with the opening of MonteLago Village. In late 2006, the Hyatt changed hands and is now owned by Loews Hotels. Hilton Hotels recently purchased a hotel site and plans on breaking ground in 2008.

Creating both a sense of place and value was critical to the success of the project. Boeddeker’s vision for the property, however, was in total contrast to the geological nature of the region. While the concept breaks with traditional desert themes, the designers were sensitive to the surroundings. The views created by the rugged ridgelines are considered an essential part of the landscape and were not broken for development.

The site was owned by a local rancher until the BLM condemned the land and parceled it into ten-acre (four- hectare) lots. When the developer, Transcontinental Properties, eventually bought the site from the BLM, the parcels had to be reassembled.

The first section was purchased from the Bureau of Land Management. The original contract between the BLM and Transcontinental in 1989 set a price of $4 million, but it took 12 years to clear the mining claims. By that time, the developer had gone ahead and created the lake and the first golf course, increasing the appraised value of the land considerably. The BLM required that payment for the land be based on the new appraisal of $62 million. The initial land purchase and infrastructure development were made with cash. Wells Fargo financed an additional $500 million for development. In 2004, a public investor repaid the bank’s investment in full.

The first phase has a $75 million bond and the second phase has a $48 million bond. A bond will be issued to close out the third phase of the project.

In addition to the cost of the land, there were considerable upfront development costs. Before any lots were sold, infrastructure costs of $90 million had accrued for development of the lake, followed by two golf courses. Also, the hotels needed to be up and running early in the development, before a solid market had been established for them. Therefore, the developer became an investor in the hotels to ensure financial stability in the early development stages.

When the project began, development agreements with the city were uncommon, so one does not exist for LLVR.

PLANNING, DESIGN, AND CONSTRUCTION

The primary design feature is the lake that offers ten miles (16 kilometers) of shoreline along which development is sited. Averaging 150 feet (45.7 meters) in depth, it is the largest privately owned lake in southern Nevada.

Located on the south side of the lake is the 550-acre (222.5-hectare) SouthShore development, comprising custom homesites. Four residential areas are located along the north side of the lake next to the Jack Nicklaus–designed Reflection Bay Golf Club. The north side is anchored by the Loews Hotel. On the west side of the lake, the 349- room Ritz-Carlton Hotel is the centerpiece of MonteLago Village, a $500 million Mediterranean-themed town center developed by Intrawest Corp.

The original LLVR concept called for 15,000 hotel rooms and 5,000 homes, numbers that would have required high density and high-rise buildings. Eventually, a total of 500,000 square feet (46,452 square meters) of retail space, spread throughout several small villages and commercial nodes, will be developed in the resort. But ultimately, the developer chose lower density, greater exclusivity, and a more resident-oriented community. To achieve this goal, the current plan instead calls for 1,900 hotel rooms and approximately 9,000 residences.

Lake Las Vegas Resort includes a wide variety of housing types: custom homes, attached five-unit complexes, condominium units, and fractional-ownership flats. A total of 19 residential communities have been built in Lake Las Vegas Resort as of November 2007, with an expected buildout by 2015. Prices go from the high $300,000s to over $4 million. Custom lots range from $600,000 to $20 million. Demand for property has been strong enough that the developer does not have to finish lots, so raw land is sold to homebuilders. Once the land is sold, LLVR does the grading, engineering, and platting.

Numerous local and national homebuilders are operating within the resort—Pardee Homes, Amland Development, Amstar Homes, Centex, Woodside Homes, Toll Brothers, Engle Homes, Innovative Communities, and Storied Places.

MonteLago Village, which opened in 2003, is the town center for the development. Sited along the lake, it is designed with an Italian-style ambience: cobblestone streets and piazzas form the setting for luxury boutiques, restaurants, and condominiums, as well as the Ritz-Carlton resort hotel. The Italian theme is carried out in a shop- lined bridge that spans Lake Las Vegas, modeled after the Ponte Vecchio in Florence. The town center was built by Intrawest, a company known for its resort town centers throughout the world.

The Ritz-Carlton, the town center’s anchor, is a boutique resort hotel with 349 rooms, a fine-dining restaurant, a luxury spa, and conference facilities. Groups account for about 70 percent of the hotel’s business. Occupancy averages 76 percent and the average room rate is $225. The hotel provides guest transportation to the Las Vegas Strip. One design feature is that the club-level rooms are located on the aforementioned Ponte Vecchio–inspired bridge. The rooms occupy the upper two levels of the bridge buildings, with retail space—currently a wedding chapel and a flower shop—on the ground level. The Ritz-Carlton has won Condé Nast’s Gold Award for resort hotels and is rated five diamonds by the Mobil Travel Guide. And in August 2007, the Ritz-Carlton was rated by Sunset Magazine as one of the top ten lakeside resorts.

The Loews Lake Las Vegas Resort opened in 1999 under the Hyatt name, but was purchased by Loews Hotels at the end of 2006. It comprises 493 guest rooms, including 46 suites, and occupies a 21-acre (8.5-hectare) lakefront site adjacent to the resort’s Reflection Bay Golf Course. The hotel’s amenities include four restaurants, a 9,000- square-foot (836-square-meter) spa, a children’s camp, two swimming pools and a swimming lagoon, and a lakeside fire pit. The hotel has an “adventure concierge” on staff to arrange excursions beyond the resort.

In addition to traditional hotels, the resort offers extended-stay accommodations, which are rented on a per-night basis. These include Intrawest’s MonteLago Village Resort, which consists of 150 condominium hotel units; and Lake Las Vegas Resort Vacation Villas, a luxury rental property that features villas and individual homes that can also be rented for extended stays.

Phase III, under construction as of November 2007, consists of 1,000 acres (404.7 hectares) and includes the 60- acre (24.3-hectare) Island of Lake Las Vegas, which is to be the signature piece of the project. Designed as a Venetian-inspired village at the north end of the lake, it will feature a second town center with a hotel and casino. Phase III will also comprise 3,000 homes and a golf course. Housing at the center will be multifamily flats over retail space. Buildings will step up from one to three stories at the edges to five to eight stories at the core.

The market for very high-end housing continues to be strong, a demand that Phase III addresses with a custom lot program and fewer attached units than originally planned.

AMENITIES

The lake serves as the primary amenity, design feature, and marketing tool for the resort. “The one thing this project has that nothing else can match is the largest privately owned body of water in the state,” Boeddeker says. Because the lake was built with private funds, the developer is able to restrict access to residents and guests of the resort. The lake offers swimming, boating, fishing, and party cruise boats available for rental. Except for the chartered yachts and safety boats, only nonmotorized or electric recreational boats are permitted in Lake Las Vegas.

Golf has been part of the Lake Las Vegas amenity package since the Nicklaus-designed SouthShore Golf Club opened in 1995. Reflection Bay Golf Club, a daily-fee course also designed by Nicklaus, followed in 1998 and the Falls Golf Club opened in 2002, with a Tom Weiskopf–designed course. The next course to open will be the Rainbow Canyon Course, an 18-hole layout designed by Tom Fazio, located on the northwest shore of the lake.

MonteLago Village serves as a major amenity as well. Residents and guests can shop and dine without having to leave the property or even get in their cars. The developer is seeking to add a small, high-end grocery store to the current mix of 28 shops and restaurants.

Even though the project is located in a very low-crime jurisdiction, residents are concerned about security. An additional amenity is the private security patrol that roves the property 24 hours a day in three patrol cars. The South Shore neighborhood is gated and has its own roving security. Residences have alarm monitoring that is part of the homeowners association dues. The hotels also have their own security.

Amenities are in line with the demographics of Lake Las Vegas. Walking trails, golf courses, and “soft” programming—such as a concert series—round out the resort. In 2006, LLVR provided $2 million of funding for the Andrea Bocelli concert, “Amore Under the Desert Sky,” part of PBS’s Great Performances series.

WATER AND ENVIRONMENTAL MANAGEMENT

As mentioned previously, Lake Las Vegas is over 150 feet (45.7 meters) deep at its deepest points and is filled from Lake Mead and the Colorado River. Water rights from Lake Mead came with the land at the time of purchase. Water quality in Lake Las Vegas is biologically controlled; no chemicals are used. It is stocked annually with fish for insect control and recreational purposes (with a catch-and-release policy). In summer, water is tested weekly due to beach use. In winter, it is tested monthly. Wastewater is pumped back into the city system where it is purified. Lake water is used to irrigate the golf courses and common-area landscaping. Residents can use electric or wind- powered boats, but not gas-powered ones, which keeps the lake clean as well as quiet.

Desert plantings are used for common-area landscaping and residents are discouraged from planting turf grasses on private properties. Permeable pavers are used for road surfaces, allowing rainwater to be absorbed rather than become runoff. French drains circulate water back to the golf course.

The community encourages nonautomobile transportation, opting for a variety of alternative modes of travel instead. Golf carts and Vespa motor scooters are used by many residents. A water taxi crosses the lake. LLVR’s bike trails link with a regional system. An electric trolley operates during special events.

A ten-acre (four-hectare) wetland wildlife preserve was created as part of the open-space program. There, residents can see bighorn sheep, which are native to the region, as well as raccoons, quail, eagles, foxes, blue heron, and coyotes.

MARKETING, MANAGEMENT, TENANTS, AND PERFORMANCE

The master developers of Lake Las Vegas Resort are Transcontinental Properties, Inc., and Sid and Lee Bass of Fort Worth, Texas. Transcontinental Properties is a subsidiary of Transcontinental Corporation of Santa Barbara, California. The firm has a diverse portfolio of real estate developments throughout the United States.

The LLVR project began with the golf courses. The firm operates the golf courses and restaurants with in-house staff of about 450 employees. The developer is largely a “horizontal developer.” That is, the firm buys, permits, and engineers the land, then sells it to builders to complete the “vertical development” (the buildings).

The resort environment appeals to purchasers of first, second, or third homes. The typical buyer is over 45 years old. As of fall 2007 there are very few children, but that is beginning to change.

The lake is viewed as a marketing tool, an advantage that no other local property has. The town center, with its restaurants and other amenities, is also a good marketing feature since it establishes the kind of lifestyle many people want—namely, one where it isn’t necessary to drive outside the community for dining or activities. Because this is a resort community, providing other daily needs on site is not considered essential.

The developer receives a percentage of gross sales from the homebuilders, including 50 percent of all lot premiums, 1 to 2 percent of the base home prices, and a small percentage for options and upgrades to homes. The developer expects to gross $7 billion in land sales by the time the project is complete.

EXPERIENCE GAINED

 The developer initially expected to draw casino hotels. But they were not interested in this location, so resort-style hotels were sought out instead. This effort paid off, with two desirable, upscale hotel properties locating in the project, and two more on the drawing boards as of November 2007.  Using improvement districts as a funding mechanism for infrastructure worked well. LLVR had the first local improvement district in Henderson, Nevada.  Time is not always the enemy that some developers think it is. In a project where values are escalating rapidly, it pays to hold back some of the best land for the end. This way, the value created by the development is fully realized in these last parcels. Land that had been selling (to builders) for $300,000 per acre ($741,000 per hectare) at the early stages of development is currently selling for more than $2 million per acre ($4,940,000 per hectare).  The developer is extremely pleased with the performance of Lake Las Vegas Resort and plans to replicate its success elsewhere.

PROJECT DATA LAND USE DATA Site size (acres/hectares): 3,592/1,454 Percentage complete as of November 2007: 55

LAND USE PLAN Use Acres/Hectares Single-family residential 746/302 Townhome residential 30/12 Multifamily residential 667/270 Hotels (4) 48/19 Retail 24/10 Town/village center 41/17 Club facility (excluding golf clubs) 15/6 Golf courses (4) 726/294 Open space 1,295/524 Total 3,592/1,454

RESIDENTIAL INFORMATION Number of Units Density (Units per Unit Size (Square Typical Sales Unit Type Completed/Total Planned Acre/Hectare) Feet/Square Meters) Price Custom lots 350/NA 2/5 $600,000– $20,000,000 Production single 300/400 2–5/5–12.4 1,400–4,800/130–446 $500,000– family $20,000,000 Multifamily 500/4,350 6–36/14.8–89 1,100–4,500/102–418 $350,000– $3,000,000 To be determined NA/4,095 Total 1,150/8,900 2.5/6.2 Net residential density (units per acre/hectare): 6.2/15.2

HOTEL INFORMATION Hotel Name Guest Rooms Average Daily Room Rate Average Occupancy (%) Loews 493 $200–$275 72–80 Ritz-Carlton 349 $250–$350 72–80 Planned 845 Total 1,895

FRACTIONAL UNIT INFORMATION (MonteLago Village Resort) Number of Unit Size (Square Housing Units Interval Type or Length Feet/Square Meters) Typical Sales Price 32 One-eighth 1,900–3,100/177–288 $400,000 per interval

RETAIL AND RESTAURANT INFORMATION (Operated by Intrawest) Tenant Type Number of Tenants Retail 13 Restaurants 11 Other 4 Total 28 Percentage of GLA occupied (as of fall 2007): 80

DEVELOPMENT COST INFORMATION (Estimated Costs at Completion) Site Acquisition Costs: NA

Site Improvement Costs: $342,000,000 Infrastructure: $180,000,000 (excluding lake) Lot finish: $30,000,000 Golf courses: $65,000,000 (excluding clubhouses) Lake and dam: $42,000,000 Landscape: $25,000,000

Clubhouse Construction Costs: $36,000,000

Soft Costs: $110,000,000 Architecture, engineering, planning: $10,000,000 Project management: $20,000,000 Marketing: $20,000,000 Legal/accounting: $20,000,000 Taxes/insurance: $40,000,000

Total Development Cost: $488,000,000

DEVELOPMENT SCHEDULE Planning started: 1986 Site purchased: 1987 Construction started: 1989 Sales/leasing started: 1995 Phase I completed: 2003 Phase II expected completion: 2010 Phase III expected completion: 2015

DRIVING DIRECTIONS

From McCarran International Airport: Take I-215 East to the freeway’s end at Lake Mead Parkway. Continue going east across Boulder Highway to Lake Las Vegas Parkway and the resort entrance signage. After turning left into Lake Las Vegas Resort, follow additional signage to your desired destination.

Driving time: 25 minutes in nonpeak traffic.

Adrienne Schmitz, report author Jason Scully, editor, Development Case Studies David James Rose, copy editor Joanne Nanez, online production manager Kathryn Terzano, editorial associate

This Development Case Study is intended to serve as a resource for subscribers in improving the quality of future projects. Data contained herein were made available by the project’s development team and constitute a report on, not an endorsement of, the project by ULI–the Urban Land Institute.

Copyright © 2007 by ULI–the Urban Land Institute 1025 Thomas Jefferson Street, N.W., Suite 500 West, Washington, D.C. 20007-5201

Developed by Transcontinental Properties, Inc., Lake Las Vegas Resort is an Italian-themed resort community - featuring two luxury hotels, several golf courses, a town center, and 8,900 residences - located in Henderson, Nevada, and centered around a 320-acre (129.5-hectare) manmade lake.

As the community’s primary amenity, Lake Las Vegas offers swimming, boating, fishing, and party cruise boats available for rental. Except for the chartered yachts and safety boats, only electric or nonmotorized recreational boats are permitted in the lake, which is largest privately owned body of water in the state.

A total of 19 residential communities—with home prices ranging from the high $300,000s to over $4 million—have been built in the resort and include a wide variety of housing types: custom homes, attached five-unit complexes, condominium units, and fractional-ownership flats.

Luxury boutiques and the Ritz-Carlton’s club-level rooms are located on the Ponte Vecchio–inspired bridge that crosses Lake Las Vegas.

Golf is a key part of the Lake Las Vegas amenity package - among the four golf courses are two designed by Jack Nicklaus and one designed by Tom Weiskopf. A fifth course is in the works.

Lake Las Vegas Resort site plan.