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Sep. 15, 2008
Copyright © Las Vegas Review-Journal

Onyx mid-rise condo project forced into bankruptcy

$28 million project pitched in 2005 as high-rise alternative

By HUBBLE SMITH
REVIEW-JOURNAL
More Info
MILLION-DOLLAR HOME SALES

Luxury Homes of Las Vegas reported the following million-dollar home sales last week:

  $2 million, 3 bedrooms, 4.5 bath, 4,007 square feet, marble and stone flooring, 11-foot ceilings, wet bar, 31st floor, balcony with Strip views, Turnberry Place.

  $4 million, 6 bedrooms, 6 baths, 10,000 square feet, acre lot with double fairway golf and mountain views, additional gate, wine cellar, theater, racquetball court, Summerlin.


The 63-unit Onyx mid-rise condo project has entered involuntary Chapter 11 bankruptcy. Among the creditors are Precision Concrete, Perlman Architects and Jeffrey Stone, owner of Summit Builders.
Photo by Craig L. Moran.

Creditors have forced the 63-unit Onyx condominium project on Duke Ellington Way into involuntary Chapter 11 bankruptcy.

San Diego-based Crestone Co. was developing the 2-acre site, formerly the Tropicana Inn. The telephone number listed on the company's Web site is no longer in service.

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    • Petitioning creditors include Jeffrey Stone, Perlman Architects of California, High Point Construction, Alpine Steel, Sundance Pools and Spas and Precision Concrete.

    The $28 million mid-rise project was announced in 2005 as an affordable alternative to the high rises that were being built near the Strip. Units at Onyx ranged from 740 square feet to 2,300 square feet and were priced from the $400,000s to more than $900,000.

    They came standard with granite counters, stone flooring, General Electric appliances and 10-foot ceilings. Amenities included covered parking, a pool and a fitness center. Proximity to the Strip and McCarran International Airport was also a selling point.

    "I feel sorry for those guys," Las Vegas-based architect Howard Perlman said. "They owe me money, but they got hurt. Everybody's getting hurt, but it's just the timing in the market. Can you sell a condo for those prices? Their strategy was right on when they started."

    Attorney Laurel Davis, whose client has a mechanics' lien of about $4 million, said a potential buyer made an offer of $35 million, though there's been no verification of earnest money deposit or ability to close escrow.

    In a status hearing last week, Tropicana Inn Investments counsel David Winterton confirmed that the debtor consents to the entry of an order for relief, which marks the beginning of a bankruptcy proceeding. Once the order is entered, a number of deadlines for the case will be established, such as the filing of proofs of claim, the deadline to file a plan and other matters.

    The case has been assigned to U.S. Bankruptcy Court Judge Mike Nakagawa.

    ECONOMIC INDICATOR: Ritchie Bros. Auctioneers sold $30 million of used construction equipment in Las Vegas in August, indicating continued weakness in the construction sector of the local economy, Forbes.com reported.

    "We had been hit with the downturn in residential development in Las Vegas, so we decided it made more sense to sell some of our equipment with Ritchie Bros. rather than pay for it to sit idle," said Robert Albano, chief executive officer of American Asphalt.

    About 95 percent of the equipment was sold to bidders outside Nevada. Salmon Earthmoving Services of Australia had five winning bids.

    PECOS BUILDING: United Construction completed the two-story, 24,732-square-foot Pecos Building at 178 N. Pecos Road in Henderson.

    The $2 million office and retail project was speculatively built out into three units on the first floor ready to be occupied.

    The second floor offers nearly 13,000 square feet of office space with expansive windows for views of Henderson.

    Mertz Properties is the developer; Dekker Perrich Sabatini is the architect of record.

    BROKER TRANSACTIONS: Rob Lujan, Jason Simon and Frank Gatski of Gatski Commercial represented Sannik LLC in the purchase of two retail pads at Lake Mead Plaza, 6520 and 6540 E. Lake Mead Blvd. The transaction is valued at $6.4 million.

    Donna Alderson and Greg Tassi of CB Richard Ellis represented Jackson Shaw in the sale of 20 acres at Northeast Crossing Commerce Center, 2975 Lincoln Road, for $9.3 million. The land was purchased by Dermody Operating Co.

    Brad Peterson of CB represented Arroyo Corporate Center in the 63-month lease of 15,103 square feet of office space at 5895 S. Tenaya Way to Stantec Consulting. The lease value is $2.2 million.

    Dan Doherty, Patti Dillon and Laura Hart of Colliers International represented RC Willey Home Furnishings in the 55-month lease of 45,000 square feet of industrial space at Craig & Lamb Distribution Center. The transaction is valued at $924,132.

    Rhonda Panciro, Grant Traub and Keith Cubba of Colliers represented Community Bank of Nevada in the 10-year lease of 3,500 square feet of retail space at Coronado Center. The value is $1.8 million.

    Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.



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    glen wrote on December 19, 2008 10:22 PM: 12/2008 looking for mid construction condo projects in California for sale. Please email with any information. mitchellinvestmentsandrealty@gmail.com


    RJL wrote on September 17, 2008 09:43 AM: GREED is the word that should be used to describe our economy and country right now. Some blame it on Bush, some blame it on non-union builders, others on banks and mortgage companies. The sad fact is that people saw opportunities to get rich quick without having to work hard. Speculators drove up the prices, real estate agents promised quick returns, mortgage brokers offer bad loans to people they knew could not afford them. The cause is GREED. Don't blame the political leaders for YOUR mistake. The home owners who bought on speculation, accept your mistake. Banks which backed bad loans accept your responsibility. Unscruptous realtors and mortgage brokers, well we know you are getting your dues now that little is selling. One way the Bush administration can help is push legislation that will require people to stand up for the error and force banks to extend the terms of loans. Make people own their mistake but give them some help on reducing the monthly payments. Allow banks to keep loans open but earn less money.


    7.62mm FMJ wrote on September 15, 2008 07:27 PM: Another failed project by poorly run Summit Builders. Go back to Phoenix scumbags! You are not wanted or needed in Las Vegas!


    abe s. wrote on September 15, 2008 07:23 PM: That's what happens when you use a non-union general contractor like Summit Builders and a non-union sub like Precision Concrete. A project that is over budget and delivered late. You get what you pay for! Monkey wages=Monkey Work. Ha-HA


    Tom Best wrote on September 15, 2008 05:16 PM: I bought a new house in Henderson in 2000 for $143,000. Paid an extra $3,500 "lot premium" because it has a view of the Strip. Only owe about $95,000 now. But we have 13 houses in foreclosure in the subdivision, and what amazes me is that the average amount owed on the foreclosed homes is over $250,000. What were they thinking? And 2 doors down, my neighbor from Cali has a nice house that he overpaid for-the house originally sold for $179,000, he paid $425,000! He's so upside down, he's inside out. What a country....


    beep beep wrote on September 15, 2008 03:17 PM: This project was supposed to be 'affordable' alternatives to the high rises?? 740 sq feet starting in the $400k ? You are all correct about the housing here, no sooner was there any sign of life did builders start popping up more houses in my neighborhood. anyone trying to sell a house purchased within the last 3 years hasn't got a prayer in the world, unless they dont mind taking a financial beating. Jeezlouise is right, these people who pushed this market into this condition should be held accountable, instead they cry like babies as if they are the ones hurting. I bought my house in 2006 when the market was starting to crumble, and my buyer's rep was still singing the 'you better move quick becuase the house wont be on the market long' story. Anyone else do that it would be blatant fraud or misrepresentation at minimum.


    Mark$ wrote on September 15, 2008 10:33 AM: It's insane, these developers. Who are they kidding! In my neighborhood (Viking & Macleod), they CONTINUED putting up big new spec houses even into this year, long after everyone knew Las Vegas is SATURATED with empty unaffordable housing. And, multiply this on a mass level, financing of unsound projects, and you have what's going on in Washington, the government desperately trying to cover TRILLIONS in non-performing loans. I'll bet the day Bush leaves office is when we REALLY see the cataclysm awaiting us.


    Jeezlouise wrote on September 15, 2008 08:29 AM: The developers are greedy and the mortgage industry is crooked. Especially Countrywide who offered me a mortgage on a 700 sq ft apartment with paper thin walls in Seven Hills-listed at a rediculous $177,000. I said no thanx on that scam. It was the best decision I have ever made. The apartment is worth about $40,000. I dont feel sorry for any of them. Why are the mortgage brokers not facing fraud charges? Now smart people are expected to bail out the scammers.


    builder wrote on September 15, 2008 08:02 AM: It is so sad to see projects get shutdown like this, banks need to give projects like this time to work out a solution, www.pathtodefault.com is dedicated to finding solutions.


    mauna loa wrote on September 15, 2008 06:26 AM: Can you say overbuilt. Joe Citz-aka slot fool can't come to vegas right now. Everything is too high(gas,food,HELLO). With IKE going on, it's going to get worse. Wake up Vegas, the money has dried up, starting with the asian rim. All you fools seem to care about is the OJ trial, or the start of football season.