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Dec. 16, 2008
Copyright © Las Vegas Review-Journal

Work on ManhattanWest project suspended

By HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL

Construction has been suspended on the ManhattanWest mixed-use condo development in southwest Las Vegas Valley, the developer said today.

Funding for the $350 million project is no longer available and it’s uncertain when new financing will be secured, Gemstone Development Chief Executive Officer Alex Edelstein said.


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    • Edelstein is looking to form a group to purchase the senior notes at a discount and finish the project, but that’s going to take some time, he said.

    “The main problem is a mismatch of what it costs to build one of these things and what people are willing to pay for condos and office space,” he said. “We are very sorry to have to suspend construction. We are looking for ways to finish it. We’re going to try and get it done.”

    ManhattanWest plans call for 700 condo units in 12 buildings, including a nine-story tower that has already been topped off. It would also encompass 150,000 square feet of office space over 50,000 square feet of retail and underground parking.

    The project at the Beltway and Russell Road is near completion, but recent economic events have created an extremely difficult environment for real estate development, Edelstein said.

    “It started out as just a real estate problem and now it’s a global problem. Real estate is hurt because the larger economy is busted,” he said. “If you’d told me a year ago Las Vegas would have severe layoffs in the casinos and a severe drop in tourism and negative population growth, I would have laughed.”

    Gemstone incurred “significant financial impacts” from alleged material contractual breaches by its former general contractor, Apco Construction, Edelstein said. That’s the main reason cited by lenders for terminating financing.

    The increased costs include charges to rework and rebuild parts of the project that were built improperly.

    Existing buyers remain under contract as Gemstone works to complete the project. The sales center remains closed.

    Gemstone, which built the Manhattan condo community at Las Vegas Boulevard and Serene Avenue, acquired 20 acres in 2006 for about $30 million. It was financed by Theraldson Financial Group, the same lender on Manhattan.

    Other mixed-use developments have met a similar fate in Las Vegas. Paxton Walk suspended sales earlier this year and Sullivan Square never progressed past excavation. Two condo projects -- Mira Villa and Vantage Lofts -- halted construction and filed for bankruptcy.

     

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

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    Bill McBeth wrote on January 09, 2009 07:32 PM: What does Las Vegas real estate wannbee Paul Murad have to say about this?


    you gotta be kidding wrote on December 17, 2008 09:29 PM: this is what happens when you try to get involved. if you let the g.c.(apco) run the job from the get go you might have been a month from finishing, but you wanted to be involved and look were your at. good job genius.


    J wrote on December 16, 2008 11:09 PM: Can you PLEASE finish resurfacing Russell Road in front of your project?


    casinocon wrote on December 16, 2008 09:38 PM: Gee, another condo unit gone kaput! Big surprise. Hello!!! Who was supposed to live in these things? Las Vegas is not all that. When will the Casino corps and greedy real estate developers understand that? About now, maybe.


    cyco bob wrote on December 16, 2008 09:33 PM: Oh man, we need to get this done... dont you people know there is a shortage of housing units in this city.


    G.I. Wonder wrote on December 16, 2008 09:15 PM: Gee.... I wonder why Martin Harris refused to jump back in bed with Alex after doing Manhattan ???? Looks pretty obvious now !!!


    So much smoke.. wrote on December 16, 2008 08:53 PM: Which is it Alex..the cost to build this type of thing versus what people will pay or APCO messing up..You are all over the board..Why is it that there are over 25 million dollars in liens on the project for unpaid work to subs..sounds like you took lessons from the Venetian owner....


    Free Nevada wrote on December 16, 2008 08:17 PM: That's why this:

    http://www.lasvegassun.com/news/2008/dec/02/proposal-hendersons-tallest-building-progresses-ci/

    Must be defeated.

    Henderson is salivating at the thought of the property taxes, but it will wind up with half-built skyscrapers like Echelon and now 'ManhattanWest'.


    What A Crock.... wrote on December 16, 2008 08:10 PM: Alex blaming APCO is insane at best. He didn't like that APCO wouldn't put up with his "little mans syndrome" temper, so he's blaming the economy, just like Slade (Vantage) and the automakers are doing !!