Tony Vegas development struggles in downturn

The decision was blasted by environmentalists, who now see a bit of karma in Lake Las Vegas' recent troubles.

"This was the height of the gilded age of excess in the 1990s and 2000s. It was a community built on the idea that there were no limits to natural resources or to the number of millionaires willing to invest in a project," said Launce Rake, a spokesman for the Progressive Leadership Alliance of Nevada, a liberal government watchdog group.

"I don't know if Lake Las Vegas is sustainable in the long term. Does it turn into a ghost town?"

This dire notion is dismissed as hyperbole by many residents and the current owner of much of the land and amenities, Atalon Group.

"Like many large-scale second home and resort communities throughout the country, Lake Las Vegas has had to adjust to the decreased demand for property and pricing of investments," Frederick Chin, president of Atalon-subsidiary LLV Holdco LLC, said in a statement.

"Atalon's goal for Lake Las Vegas is to reset and reposition the community to flourish as market conditions improve, thereby achieving what is in the best interests of homeowners and stakeholders alike."

After the development filed for bankruptcy in July 2008, corporate officials won approval to pay for urgent repairs to prevent the premature deterioration of two pipes underneath the lake. They argued the damaged pipes threatened to drain the lake like water from a bathtub.

There are plenty of residents with ample resources working to hold Atalon to its commitment. A savvy and heavily invested group, some are banding together to protect their homes and their amenities. One group is trying to arrange to buy the private SouthShore Golf Club now tied up in the bankruptcy.

Others are ready to move to less remote pastures.

To her own disbelief, resident and real estate agent Lynne Hoffman has had her Lake Las Vegas home on the market for three years with an eye toward moving to a community closer to more ordinary comforts — supermarkets, clothing stores, a bank.

She's dropped the price to $488,000 — $40,000 less than she paid in 2001. She gets offers from potential buyers, she says, but they lowball her lowball price.

"It's insane! I'm like, what do you want people? You want this house for a penny? I have to pay the bank," she said.

There are plenty of properties that have fallen much further from the height of southern Nevada's real estate bubble, one of the most inflated in the nation.

Real estate listings show a 4,000-square-foot mansion that sold in 2005 for $2.7 million was marked down to $1.2 million in May. A 1,700-square-foot condominium that sold for $1.2 million in 2004 is now listed for $389,000.

Celine Dion and her husband Rene Angelil bought a home on the lake's south shore for $1.2 million in 2002, as the Canadian songstress began what became a five-year run at Caesars Palace on the Las Vegas Strip. Since then, Dion has moved on to other gigs and the home has only sunk in value to about $795,000, according to estimates on Zillow.com.

"Deals" like these are drawing a new breed of potential home buyers to the lake. One agent and resident, who asked not to be named to protect her business, described her new clients this way: "It was the Lexus or the Mercedes, we're down to now pickup trucks."

However, it's not likely that this tony retreat will soon become a favorite for young families or middle-class homeowners. Although home values have dropped to affordable levels, homeowners association fees that go to pay for upkeep of common areas have not. Some residents pay three such fees, adding more than $500 to a monthly housing bill.

Santacruz, who now lives in Chicago, laughed a pained chuckle when told the current listing price for the condominium he let go to foreclosure. He paid $359,000 for the 630-square-foot unit in 2004. It's listed for $76,900.

He thought for a minute and said, "At that price, someone could make some money."

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