Las Vegas Sun

December 10, 2016

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Business bankruptcy filings continue to pile up in valley

The Las Vegas commercial real estate market remains troubled as the recession persists locally — and that’s reflected in three new bankruptcy filings in 2011.

Among the latest to file for bankruptcy was Vegas Tomatoes Inc., which filed for Chapter 7 liquidation on Jan. 12 in U.S. Bankruptcy Court for Nevada.

Vegas Tomatoes is licensed to do business as 3 Tomatoes & A Mozzarella, a restaurant and club at 6485 S. Rainbow Blvd., near Sunset Road and the Las Vegas Beltway.

The restaurant remains open and officials couldn’t be reached for comment on whether its operations would be affected by the bankruptcy.

Vegas Tomatoes listed assets of $5,000 and liabilities of $1.3 million owed to Newtek Small Business Finance Inc. The money owed to Newtek is secured by furniture, fixtures and equipment.

The bankruptcy filing came after New York City-based Newtek sued Vegas Tomatoes and several individuals associated with the company on June 18 in Clark County District Court, charging Vegas Tomatoes owed $634,000 under loan agreements in which it was delinquent and seeking to repossess collateral for the loans. The individuals were sued as alleged personal guarantors of the loans.

The individuals sued along with Vegas Tomatoes were Richard A. Tyson Jr., Lucille R. Tyson, Laura D. Cravish, Christian J. Zajac, Shana D. Zajac, James McCluskey, Rebecca McCluskey and James Willis Freeman Jr.

Attorneys for the defendants answered the lawsuit in August, charging there was a dispute about the loans and that Newtek “has unclean hands” and was not entitled to relief from the court. Records from December indicate that case was submitted to arbitration.

Also filing for bankruptcy last week in Las Vegas was TAWK Development LLC, owner of the 198-unit Falcon Landing apartment complex at 5067 Madre Mesa Drive in Las Vegas, near the intersection of Rancho Road and Decatur Boulevard.

TAWK, which filed for Chapter 11 reorganization Friday, said it generated $2 million in rental income last year and that it’s cash-flow positive prior to debt service.

TAWK didn’t disclose detailed financial information in its initial filings, but it said assets and liabilities each top $10 million.

Another Chapter 11 bankruptcy filing was made in Las Vegas on Jan. 5 by B.R. Summerlin Property LLC, which is controlled by investor Bernard Rosenson in Woodland Hills, Calif.

Court records show B.R. Summerlin owns property at 10550 Park Run Drive in Las Vegas, near Charleston Boulevard and Town Center Drive in Summerlin.

Records filed with the Securities and Exchange Commission show that property has been leased to Skilled Healthcare Group Inc. of Foothill Ranch, Calif., for use as a nursing home called The Heights of Summerlin.

B.R. Summerlin in its initial filing said assets and liabilities each exceed $10 million.

These bankruptcies are on top of:

• The $5.7 million Jan. 6 bankrupty of the Beso restaurant and Eve nightclub at CityCenter on the Las Vegas Strip

• Efforts by lenders owed $449 million to foreclose on the Town Square mall and office complex on Las Vegas Boulevard.

• Efforts by different lenders owed $585 million to push the Inspirada planned community in Henderson into bankruptcy.

Local research firm Applied Analysis reported last week that the Las Vegas Valley office vacancy rate reached a new high of 24.2 percent in the fourth quarter of 2010 — it was 23 percent a year earlier — with owners holding 12.1 million square feet of vacant space, a four-year supply at the current absorption rate.

The local retail market, however, is improving by one measure with a vacancy rate of 10.2 percent, down from 10.5 percent at the end of 2009, Applied Analysis said.

But for landlords, the local retail market remains troubled as, Applied Analysis says, asking rents are down substantially from the boom years of 2006 and 2007 when vacancies ran at just 3.2 percent and 4.1 percent, respectively.

“The reported decline in the (retail) vacancy rate is warmly welcomed. However, it is likely that the vacant space, at more than 5.2 million square feet, will take a significant period to draw down as unemployment remains elevated. Consumers’ confidence levels and their future expectations in the economy remain relatively weak. Despite job and economic concerns persisting, residents and visitors to Southern Nevada are spending more than they have compared to a year ago, a ray of light in an otherwise difficult operating environment,” Applied Analysis Principal Brian Gordon said in a statement.

In a third report, Applied Analysis reported continued weakness in the local industrial market with vacancies at 16.9 percent, up from 14.5 percent a year ago.

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