Friday, June 6, 2003 | 11:13 a.m.
Weeks of wrangling between developer Bill Walters and the Stallion Mountain homeowners' association have produced a preliminary agreement on the fate of the east Las Vegas subdivision.
The association's board of directors has endorsed a modified plan that would allow two of the development's three golf courses to be sold to home builders, which would build hundreds of homes on the land. The deal would save the third course.
Walters said he proposed the sale of the two courses in April in an effort to prevent foreclosure on the entire golf operation. He had said if no agreement was reached by Sunday he would close all of Stallion Mountain's golf facilities and place the operation into bankruptcy.
A letter spelling out the new agreement was sent to homeowners this week.
The deal increases setbacks from the road leading into the community from 40 feet to 75 feet, creating an additional 1.7 acres of open space. It also increases impact payments for some homeowners. Fifty along the fairways will receive $2,500, unchanged from Walters' initial proposal. About 45 homeowners will receive $1,500 to compensate for lost golf course views, up from Walters' initial offer of $1,000. The majority of the homeowners will receive $1,000 payments as originally proposed.
Lisa Nicklin, president of Horizon Community Management, which represents the homeowners' association, wrote the letter to homeowners.
"Remaining 'as is' is not an option with any scenario presented," Nicklin's letter said. "The board recommends your favorable vote for this revised Walters proposal."
At least 51 percent of the 730 homeowners must now vote in favor of changes to the community's bylaws to make the sale legal.
With the agreement, Walters said he will forego plans to close the courses this weekend.
"We are committed to extending this thing 10 days or two weeks, whatever it takes to get this done," he said. "I don't see (closing the courses) being any type of consideration."
Homeowners' attorney Edward Song said the board, in making its decision to support Walters' plan, dismissed another proposal from a group of local investors. That group, which Song would not identify, planned to wait for the courses to fall into bankruptcy and buy the land from the bank.
That deal was very "non-specific" and involved too much uncertainty, he said.
Homeowners should have received proxy ballots to vote on the Walters proposal by Thursday, said Michael Luce, president of The Walters Group. Luce said the company wants the completed ballots back by Sunday and will send couriers to the neighborhood to pick them up if need be.
"We have a very short window to get this done," Luce said.
Walters has said the quick turnaround is needed in order to solicit bids for the land and secure zoning changes and environmental studies needed to complete the sale prior to February, when a $32 million Wells Fargo Bank loan comes due.
Song, an attorney with Angius & Terry LLP, said getting that many votes in a short amount of time will be difficult, regardless of the board's support.
"It's going to be very daunting," he said. "This is the first step in a long process."
Homeowner opinions on the deal have been difficult for the board to gauge.
"It's fair to say that there's been a broad spectrum of response and reaction to the board's action," Song said.
While obtaining the approval of 51 percent of the homeowners would meet legal requirements, Walters has said his target is 90 percent. That would make the sale more attractive to the three builders that Walters said have expressed an interest in buying the property and building homes on it.
"(The prospective buyers) made it clear that the only way they would be interested is if we have a consensus of homeowners," Walters said.
The courses have been facing foreclosure since Wells Fargo notified Walters that his loan would not be extended and the balance would be due in February.
The termination of the Wells Fargo loan also would cause a second, $4.5 million, loan to come due, leaving the developer with a looming $36.5 million payment.
Walters' plan to sell the courses would allow the construction of about 1,200 homes on the land. The proceeds of the sale would pay off the debt, giving Golf Club of Nevada LLC, which Walters controls, debt-free ownership of the remaining golf course, a driving range and clubhouse.
If Walters is able to secure an estimated sale price of $200,000 an acre, he would receive about $50 million. After paying off the debt and funding a series of concessions for homeowners, he said he would be able to recoup about half of more than $20 million invested in the golf properties.
An appraisal, completed last month by Lubawy & Associates, said the additional homes, traffic and reduced open space would not adversely affect the existing values.
Walters' plan would prohibit the construction of condominiums, apartments or two-story homes in an effort to preserve views and home values for existing residents. Terms of the sale also would include a deed restriction preventing any future development on the remaining course, Walters said.
Also included would be a series of payments to maintain the remaining golf course, subsidize the guard gate and pay impact fees to homeowners.
The three golf courses were built between 1990 and 1995. The property was in default when Walters bought it in 1996. He sold the surrounding land for residential development in 1998. The last of the 730 homes were completed last year.