Some of the fliers circulating in North Las Vegas this week invite residents to the city’s annual hot-air balloon festival, BalloonaPalooza.

Other fliers address an issue that’s more of a downer.

The handouts invite residents to a seven-hour workshop dealing with the foreclosure crisis.

Nevada leads the nation in the rate of foreclosures, and North Las Vegas is the eye of the storm. In August, there were more than 800 foreclosures in the city.

That’s only the latest bad-news figure in the ongoing market downturn.

In the second quarter of this year, 12,000 Nevada homes went into foreclosure, and the crisis is expected to continue for at least a year. A study by the Pew Center on the States projected one in 11 Nevada homes will enter foreclosure by the end of 2010.

Some of the newest housing developments in North Las Vegas, including Eldorado and Aliante, had the highest foreclosure rates in the valley at 11 percent to 14 percent from Sept. 1, 2007, to March 31, according to a Sun analysis.

In Aliante, a master-planned community still being developed, nearly one in seven residential properties has gone into foreclosure since last fall.

Against this backdrop, City Hall is telling residents it is not too late to get help.

Buddy Yates, a 60-year-old pastor living in North Las Vegas, says he is one of the homeowners who will be seeking help at the workshop, which will be held from 10 a.m. to 5 p.m. at Texas Station.

He’s working with his lender to lower his $2,365 month payments.

Yates said he went to a workshop in July at Cashman Center that proved fruitless for him.

Saturday’s workshop, officials promise, will be different. It’s the first time North Las Vegas City Hall has addressed the foreclosure crisis head-on, by gathering the nonprofit Consumer Credit Counseling Service, the Department of Housing and Urban Development and the Federal Housing Administration.

“We needed to gear something directly to someone looking at possible foreclosure,” said Kenny Young, an assistant city manager. “Some of the other workshops are more geared toward the lenders.”

Young said not everyone can be helped, but city officials want to at least try.

The city is in the midst of redeveloping its downtown as its northern sections continue to blossom. However, the continued market slump is undercutting development success the city has enjoyed in the past decade.

“We need to stabilize neighborhoods for the people living here,” Young said. “Once we have that we can move forward with the growth in our community.”

Job No. 1 at Saturday’s workshop will be to explain the foreclosure process to beleaguered homeowners. The agencies will also provide a checklist of the documents people need when meeting with a lender in their efforts to renegotiate their loans and avoid foreclosure.

“People look to the government in times of need,” Young said. “This is definitely one of those times.”

Credits: Las Vegas Sun

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No metropolitan area has seen prices fall as much in the past year as in Las Vegas.

That’s the latest, according to the S&P/Case-Shiller U.S. National Home Price Index, which looks at 20 cities across the country.

Las Vegas recorded a 28.6 percent decline in the past year, according to most recent survey. That barely surpasses Miami, whose prices have fallen 28.3 percent in the past year. Phoenix prices have fallen 27.9 percent in the past year.

The U.S. index fell 15.4 percent.

In fourth, prices fell 25.3 percent in Los Angeles and 24.2 percent in San Diego.

The good news for Las Vegas is that the rate of decline has slowed. It dropped 1.6 percent from May to June, a figure that was less than the 2.6 percent drop in Phoenix, 1.8 percent in San Francisco and 1.7 percent in Miami.

In the April to May period, home prices had dropped 2.9 percent in Las Vegas. The rate of decline may be slowing, said David Blitzer, who heads the index committee at Standard & Poor’s. Prices had been falling 2.5 percent a month earlier in the year.

“While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines,” Blitzer says.

None of that compares with Denver and Boston, which have seen three months of consecutive increases, he says.

Dennis Smith, president of Home Builders Research of Las Vegas, says he’s not surprised the index has slowed. New-home prices can’t fall any further, and the poor condition of some of the foreclosure properties is prompting more buyers to ignore them, Smith says.

Foreclosure properties in good condition are getting multiple offers.

“People are willing to pay a little more for a house in turnkey condition,” Smith says. “I hear it from brokers that they have gotten to the point they don’t even want to show some of the homes in bad shape because no one wants to buy them. How much more are people willing to pay? It can be $20,000 to $25,000 or $50,000, depending on the house.”

Smith says he sees prices falling for at least another six months. One reason is there are many homes whose adjustable rate mortgages are set to increase in October and that will force many homeowners to simply walk away, adding to the inventory, he says.

Woodside Homes has been forced into involuntary Chapter 11 reorganization proceedings after creditors say the builder owes them more than $700 million. The company is expected to file for protection by Sept. 16. It is continuing to build homes and operate in the interim.

Credits: In Business Las Vegas

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It started with a phone call from Whole Foods in 2004.

Officials with Las Vegas-based Just Like Sugar had just developed a natural sugar substitute designed to look and cook like the real deal. They hadn’t even marketed the product when a grocery coordinator from Whole Foods in Florida called and ordered 100 cases of Just Like Sugar. Today, the company’s products line shelves in Whole Foods stores countrywide, and Just Like Sugar is reaping the rewards. Its annual revenue gained more than 13,200 percent in three years, going from $345,438 in 2004 to $46 million in 2007.

Now, the company’s quick rise has drawn attention from a national publication.

Just Like Sugar joins seven other Nevada businesses on the Inc. 500, a list of the nation’s 500 fastest-growing businesses based on revenue between 2004 and 2007. The roster, published in the September edition of Inc. magazine, features Silver State companies in a wide range of industries, from real estate and finance to security and printing.

Despite the state’s ailing economy, Nevada fared well in the 2008 Inc. 500. The eight businesses on this year’s compilation doubled 2007’s four Nevada-based Inc. 500 companies. And Nevada’s Inc. 500 contingent grew faster by far than any other state’s grouping; its average expansion rate of 4,690 percent handily beat out No. 2 New Jersey, where Inc. 500 businesses grew 2,545 percent on average.

Mike Hofman, executive editor of Inc., said Nevada’s slowing economy needn’t spell doom for companies. Businesses that produce an unusual good or service, for example, can put up brisk sales even in harder times.

Innovation proved the path to success for Just Like Sugar.

Doctors asked the company’s owners in 2003 to develop a sugar substitute sans artificial sweeteners and man-made chemicals. The answer? A sugar replacement made from chicory root, calcium and vitamin C, with orange peel for sweetness. It’s a natural product that appeals to health-conscious consumers leery of the warning labels slapped on some faux sugars, said Chief Executive Officer Michael Sylver. Doctors refer the sweetener to patients, and Just Like Sugar execs plan to expand the business in coming months with a brown-sugar substitute, cookbooks, chewing gum and a fiber drink.

“It’s a recession-proof product,” Sylver said. “It’s totally unique. You have doctors all over the country and all over the world telling patients they need to get off sugar for their health.”

Just Like Sugar isn’t the only Nevada-based Inc. 500 member capitalizing on health issues.

HealthDataInsights, an information-technology business that helps insurers, health plans and Medicare recover claim overpayments, landed at No. 388 on the roster.

Other Inc. 500 businesses in Nevada were Group Gemstone, a Las Vegas condominium developer; SellingSource, a Las Vegas company that provides marketing, technology and data services for financiers of auto loans, cash advances and credit cards; Elko-based Modern Concrete, which makes Ready-Mix concrete for residential and commercial customers; Sting Surveillance, a Henderson security business; The Siegel Group, a Las Vegas redeveloper of apartment communities; and commercial printer Abbott’s Custom Printing of Las Vegas.

When they’re not scoring thanks to one-of-a-kind products, Inc. 500 businesses find prosperity through “superior execution of a familiar idea,” or by seeking out a business model that countervails economic trends, Hofman said.

For new and improved execution of old ideas, take Sting Surveillance. The company provides customized surveillance systems to businesses and homeowners. Sounds straightforward, right? A camera, a video recorder, some monitors. But Sting carved a special niche through regularly updating its technology. Company officials have worked with a software developer for six years, constantly adding new functions to its digital video recorders.

“We identified an industry that hadn’t changed the technology in three decades,” said President Jonathan Fine. “A lot of new technologies were being introduced in the industry, and the companies that had been in business for 15 years, 30 years or 50 years were not adopting those technologies. We came in and provided the technology. We literally never said, ‘no.’ ”

At SellingSource, economic downturns play into the company’s business plan.

SellingSource — the only Nevada company from 2007’s Inc. 500 to make the 2008 roster — operates credit-reporting functions and provides software for banks that provide cash advances, credit cards and installment loans. Today’s tighter financial markets mean fewer conventional funding options for consumers, and rising unemployment and falling home values make it tougher for people to stay ahead of their bills. Thus the rising demand for small, short-term loans such as cash advances.

“Our business thrives in soft and strong economies because there’s always a group of people living on the financial edge,” said Derek LaFavor, chief executive officer of SellingSource. “But when the economy turns, that market increases, and it’s a boon to our lenders. We have the tools and strategies to identify consumers and get them to lenders.”

Entrepreneurs also thrive in hard times when they position themselves as low-cost providers looking to steal business from established competitors, Hofman said.

“They say, ‘We’re mean, we’re lean and we’re aggressive, and if you’re used to paying a certain amount for this service, we can save you 10 percent to 15 percent,’ ” Hofman said. “They feed off negative trends in the economy.”

Today’s business climate offers plenty of negative trends to exploit. Taxable sales in Nevada fell 6 percent in June when compared with the same month in 2007. Visitor volume in June dropped 3.1 percent compared with June 2007, and the median resale home sold for 23.9 percent less in July than it did a year earlier.

Still, Nevada posted more growth in the Inc. 500 than any other state. On top of its nation-leading average expansion rate, the Silver State also boasts the only city — Las Vegas — with two companies in the top 10.

Hofman credited sustained business growth in Nevada to nonstop ferment among the state’s businesses. Regions with higher-than-average bankruptcy rates typically enjoy greater startup activity as well, he said.

“Economic churn is painful,” Hofman said. “It’s not as pleasant to live through as a period of stability. But stability can also be paralyzing. One thing about Nevada, it’s a really dynamic place. You may have companies going out of business, but you also have new companies that are small and nimble and creative starting up and taking on entrenched interests. They’re looking for better ways to do things, and they can grow very fast.”

It’ll be interesting to see what happens to the Inc. 500 next year, when 2008’s economic torpor factors into earnings, Hofman said. It’s conceivable that local companies, especially operations related to the real estate sector, will post less-impressive revenue increases. But if the Inc. 500 offers one message, it’s that opportunities always exist for entrepreneurs willing to rethink traditional business models.

“Even in trying times,” said Hofman, “you can have great economic success at the company level.”

Credits: Review Journal

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Henderson plans to ask the Nevada Legislature next year to pass a bill that would require homeowners associations to maintain the block walls around the neighborhoods they represent.

At present, city officials say, many communities have no clear guidelines on whether that responsibility falls on the association or individual homeowners whose homes abut the wall.

“As our city ages, some of those walls have started to deteriorate, and we’ve found that it has been difficult to determine who is responsible for that maintenance,” said Terri Barber, Henderson director of intergovernmental relations.

The City Council voted 4-0 on last Monday to authorize the city attorney’s office to submit a draft bill to the Legislative Counsel Bureau, which handles legal matters for the Legislature. It was one of two bill drafts the city plans to submit when the Legislature convenes next February. The other approved draft would allow cities to create alternative sentencing programs in their municipal court system.

Barber said most homeowners associations take care of the perimeter landscaping around their neighborhoods. The bill would include perimeter walls as part of that responsibility.

“I don’t think anybody foresaw that (the walls) would require maintenance,” she said. “I don’t think anyone realized how fast they would deteriorate because of sprinklers and the sun.”

Kevin Wallace, president and chief executive of RMI Management, the largest homeowners association management firm in Nevada, said most of the associations he’s familiar with have defined the responsibility for exterior wall maintenance. As a general rule, he said, the outward facing part is the responsibility of the association, while the inward facing part is the responsibility of the homeowner whose yard it faces.

Interior walls — the ones between homes — are the responsibility of the homeowners, he said.

“That’s the way it is most of the time, so I don’t think (the proposed legislation) is going to affect a lot of homeowners associations, except maybe some of the older ones,” Wallace said.

If a wall needs to be replaced, he said, that would generally be done by the association out of its reserve fund — the portion of association dues that are set aside for major maintenance projects — unless it can be shown that the homeowner did something to cause the wall to deteriorate. Wallace said he has seen some situations in which a homeowner put irrigation lines near a wall, and the water caused the wall to crumble.

Most of the associations created in the last eight to 12 years have defined the wall maintenance responsibilities, Wallace said, but said he thinks the city may be looking at older associations in the Green Valley area that were created before those regulations were commonplace.

“Associations were just getting going and so there wasn’t a lot of understanding of what was going on,” he said. “(Wall maintenance) may not even be mentioned in the (governing documents).”

Credits: Las Vegas Sun

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