Tales of Woe At Lake Las Vegas
In good times when money is flowing and everything's coming up roses sometimes the impossible seems not just doable but necessary. A manmade lake surrounded by an Italian-style village in the middle of the desert starts to sound not like some sort of fevered heat fantasy but like a smart business decision (and you can even throw a floating ice rink on that lake for good measure). But the development at Lake Las Vegas is starting to look like a stock market mirage. The LA Times has a great piece assessing the damage and chronicling the decline of a neighborhood that has been home to Celine Dion and a Ritz-Carlton.
The trouble began last year as Las Vegas real estate continued to sink. The developer, Transcontinental Corp., lost the property in foreclosure after defaulting on $540 million in loans and the new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. The Ritz-Carlton owned by Village Hotel Investors LLC, also filed bankruptcy and was been sold to new owners and one of the area's golf courses has been abandoned. The Ritz-Carlton remains open is offering a variety of deals that include free nights and special rates.
Meanwhile there's trouble at the Loews Lake Las Vegas resort which is facing foreclosure. Loews Hotels has said it cannot pay off a $117 million loan to San Francisco-based Wells Fargo Bank and is struggling to keep the resort, which was once a Hyatt Regency, open. The failure of the hotel would be another blow for this development because at this point it seems unlikely that another brand would come in and take its place.