When you just look at the numbers, Cadence sounds very similar to countless other big developments. Late next year, the first 1,800 homes of the 15,000-unit community could be delivered. Those homes will be part of a 2,200-acre mixed-use development in Henderson, Nev., that is expected to eventually house 30,000 residents.
But Cadence has a different back story than most new developments: it will sit on top of the site of a former magnesium plant and toxic waste dump. Known as the LandWell Restoration Project, the parcel is one of the country’s largest brownfield redevelopments. It has been tested for contamination 500,000 times, according to numerous local news reports and the project’s Web site. That testing has discovered that 440 acres contain contaminants that could pose a health risk, although LandWell intends to remediate the entire 2,200 acres.
Basic Management, a private company that owns the land, has spent $60 million over 18 years to test the land and groundwater for contaminants, and is now cleaning up the site for residential and commercial reuse. (The LandWell Co. is a real estate development division of Basic Management.)
Mark Paris, its CEO, tells BUILDER that his company will also test every residential lot and provide homeowners with a certification from the company and the state that it is safe. Paris confirms that his company will spend another $70 million during the next 18 months to 24 months to remediate the site. He could not provide the final development or construction costs for Cadence, where buildout is expected to take eight to 10 years.
Paris says his company is about 30 days away from being ready to talk to prospective builders about this project’s products and pricing. He says LandWell will offer finished lots, super pads and even little villages, “whatever the builder might want.” LandWell might also do some of the development itself.
Cadence’s first phase would include 1,000 homes and 300,000 square feet of commercial and retail space. Another phase, which LandWell is working on simultaneously, says Paris, will have 800 homes. When completed, Cadence will include 500 acres of parks, as well as a hotel and casino that comprise the center of a 110-acre “urban core.” The project’s Web site states that the development is permitted for two million square feet of residential component would include a mixture of single-family, condo and apartment units, starting at just under $200,000, says Paris. The top-priced homes are likely to sell in the $700s. “We’re not going to have any gated communities, or custom or semi-custom homes. We’ll be targeting first-time and first- and second-move up buyers.” When completed, Cadence would be roughly equal in size to several of major master-planned communities around Las Vegas, including MacDonald Highlands (3,210 acres), Mountain’s Edge (3,000 acres) and Pulte’s Sun City Anthem (2,525 acres). The project’s Web site says the City of Henderson has included this property in its redevelopment district. A portion of the property taxes generated on this site will be reinvested in Henderson to provide public improvements and enhance areas in need. The community is expected to raise property values by $3.5 billion, generate significant property and sales taxes as well as providing construction and permanent jobs.
What the developer is banking on, no doubt, is a stronger housing market. In April, resales in greater Las Vegas reached 2,247 units, the first time they’ve topped 2,000 in seven months, according to Home Builders Research, a local market tracker. But resales through the first four months of the year were still off 27.3 percent from the same period a year ago.
New-home sales have been even more erratic. While they jumped in April to 939 units, that number was still 39 percent down from last year. The good news has been that new home prices are rising this year, hitting their highest point for 2008 in April at $291,080, according to a market analysis by SalesTraq, another tracking service.
But caution is still warranted for builders and developers. The Las Vegas market is on pace this year to issue fewer than half of the permits it issued in 2007. And foreclosures in April were triple the number for the same month a year ago, according to SalesTraq.
That doesn’t deter Paris.
“We’re confident that the market will stabilize and be healthy again by 2010,” says Paris, “and our schedule is to have the first homes ready by late 2009, early 2010; it wasn’t planned that way, it just happened.” He also notes that the land is debt-free, which will allow Basic some pricing flexibility when it starts marketing this community.
John Caulfield is a senior editor at BUILDER magazine.
Learn more about markets featured in this article: Las Vegas, NV.