The neighborhood that had to die

Looking east from the heart of Richfield Village, past Rex Bell Elementary School, the mansard roof of Palace Station towers over the sedate neighborhood. By Vegas standards, Richfield is venerable, growing up around Rex Bell, built in 1963. But Palace Station is no longer just a landmark or an employer to Richfield residents. It's also become the elephant in the middle of the neighborhood, dismaying longtime denizens of the neighborhood who see a once-stable community drifting into transience and uncertainty, thanks to Station Casinos.

Compared to areas around such paralyzed behemoths as Fontainebleau and the Cosmopolitan on the Strip, the case of Richfield Village is a subtle and obscure symptom of what happens when casino companies' ambitions outrun their wallets. Station and joint-venture partner Fisher Brothers control the southeastern corner of Richfield, in a backwards "L" that wraps around the east and southern sides of Rex Bell Elementary.

Over a three-year period, Station and Fisher bought more than 130 residential properties in Richfield, along with several apartment buildings. In many cases, entire streets were denuded of residents, though a few homeowners still fight rearguard actions. As home values throughout the valley plummeted, Station's offers escalated, nearing $1 million in some instances. However, after spending approximately $95 million bundling a four-block area, including several nearby apartment complexes ... nothing. A series of mercurial business decisions and one enormous miscalculation by Station management has thrust Richfield into limbo.

"There's a whole bunch of empty houses on the street and that's frightening," says Phyllis Ricco, one of a few holdouts on Milo Way.

The windows of many homes now sport identical "For Lease" signs, directing prospective renters to The Property Group (whose representative did not return CityLife calls.) Southern Richfield alternates between meticulously maintained dwellings and ones falling into dilapidation. With the significant number of vacancies, dilapidation appears to be gaining the upper hand.

"Whenever you have a lot of rentals, you have trouble down there," says area resident Pauline Kennedy, adding, "It's not a very good class of people."

Richfield's current uncertainty was four years in the making. During the boom years of 2005-007, confidence ran high that - as the Strip was built up to capacity - casinos and condos would spill across I-15 and a secondary Strip would burgeon along Rancho Road and Dean Martin Drive. The vise on Richfield Village began to tighten.

The out-of-towners

In September 2005, Fisher Brothers purchased the now-demolished Scandia Fun Center, along I-15. The park was slated to become the never-built Opus (aka Kallisto) condo development and came with the entitlement to build 700 high-rise units. New York-based Fisher concentrates on East Coast development and property management, its crown jewels being four skyscrapers its owns in midtown Manhattan.

Although Station and Fisher would not overtly join forces until December 2006, they began acting in concert 11 months earlier. Realtors retained by Station started buying Richfield houses and transferring title to Southern NV Rental and other Fisher holding companies. On Jan. 31, 2006, the first purchase was recorded: five homes on the east side of Wyandotte Street, a clean sweep.

Richfield Village Neighborhood Association President Katherine Martin says one Wyandotte Street dweller "was told if he didn't sell, then he was going to mess up [a] really good deal for his neighbors. And they tore those houses down with the proposition it would a nice little neighborhood park."

Nearby resident Phyllis Ricco calls the demolition "part of Palace Station's -- I don't know what you call it - beautification? They leveled five houses across the street from me. It took them one day."

But three realtors entrusted with the job nearly blew Station's cover. In July, the Las Vegas Sun reported that Richfield homeowners were being badgered to sell. The newspaper obtained a letter to residents saying their houses were to be "boarded up and torn down for redevelopment purposes." It also obtained a map identifying all of Richfield as a "Target Area."

Although residents suspected Station was behind the campaign, realtor Robert Howarth refused to identify his employer and the casino giant would give no comment. Nor did the Sun follow the paper trail back to Fisher. The latter seems to have acted mainly as a front.

"We never met anyone from Fisher Brothers," says Martin, who maintains meticulous records of transactions and police calls in the area, and says she dealt solely with Station Vice President of Real Estate Development Thomas A. Roberts.

Realtors were "threatening people. 'You have to be out of here by Friday. If you don't sell, we'll call [immigration authorities]," recalls Kennedy. Martin corroborates the accusation, noting that another homeowner was threatened with diminished property values.

"That was one of the things we called a strong-arm tactic because it was a scare." (The realtor, Virginia Arroyo, denies making deportation threats, noting that she's of Hispanic descent herself, and adds, "I'm not allowed to answer all those questions" about Richfield Village.)

Confrontational tactics eventually landed at least one other agent before the Greater Las Vegas Association of Realtors on a complaint. "Station supposedly fired that agency," Kennedy says, "and [said] they had nothing to do with bullying, but they sure got a lot of houses cheap," some in the low 200s. Of those sellers Martin says bluntly, "They got taken.

"When it all started, they tried to keep things hidden but we had some savvy with a computer. The thing that made people unhappy was [Station] were so secretive," Martin says. She and others credit Councilwoman Lois Tarkanian for bringing Station out of the shadows and into the discussion.

"In business, you don't advertise what you're doing," Tarkanian points out. After she aired residents' concerns, she recalls, Station started attending neighborhood meetings and relieved the offending realtors of duty.

In December 2006, Station announced a joint venture with Fisher to develop a mix of residential, retail and entertainment offerings on 52 acres near Palace Station. Local businesses like Brides by Demetrios and Cigar Box left the area, anticipating upheaval. News coverage at the time focused solely on the Rancho area.

Station collapses

No one connected the dots to Richfield Village until April 16, when blogger Hunter Hillegas revealed on his Two Way Hard Three discussion board at www.ratevegas.com that some Station/Fisher-owned houses "are again for sale and whoever does ultimately own them seems willing to take a bath to get rid of them." One such bargain was a Sultana Street home for which Station had paid $277,000, now going for $117,000. What had become of Station's master plan?

For starters, it's not clear Station ever decided what it was going to do in Richfield. One former resident who wished to remain anonymous sold in mid-2008, during the last big spasm of homebuying. He recalls being told demolition was imminent.

"They said it would be somewhere in the vicinity of a year. They had lots of things flying around," he says. "I always envisioned it was going to something like [The District in] Green Valley. They were really ready to go and all of a sudden the economy fell apart on them."

Kennedy heard talk of three, 50-story high rises down toward Scandia, plus "a village" and warehouses. Someone else thinks it was more hotels. Martin says Richfield residents who work at Palace Station claim to have seen a model of what Station has in mind, "but all of that's just hearsay. [Station] kept saying, 'It's not finalized,' and I would imagine that's true."

Even Rex Bell Elementary might have been engulfed by a Palace Station expansion.

"There was some preliminary discussion, two or three years ago about a land exchange," says Clark County School District spokesman David Roddy. However, with the recession and Station's bankruptcy, "that completely died, just dropped off the radar."

"Nothing has been planned for the site, and then the economy changed a lot of things," said Stations spokeswoman Lori Nelson. As for Station's vast new residential holdings, "We refurbished a lot of houses and rented them out again," save for some that had been too badly trashed by previous occupants. Nelson, however, refused to offer any further comment. Station Vice President of Real Estate Development Roberts did not return calls.

"I have no comment, to be honest," says Winston Fisher, who oversees acquisitions and new developments at Fisher Brothers. "We don't discuss our business in public. It's nothing personal," he laughed. "It's been an ongoing policy."

Aside from the difficulty of obtaining every last parcel needed in south Richfield, Station's objective has been further clouded by its zigzag business plan. Although the Station/Fisher development agreement was officially struck on Dec. 19, 2006, the company promptly saddled itself with $8.8 billion in debt in February 2007, when it accepted a leveraged buyout spearheaded by CEO Frank Fertitta III and three family members.

The self-acquisition, code-named "Project Rising Sun," inventoried Station's land holdings and filed the Palace Station area under "No Current Development Plans." Priority was given to Aliante Station, the Castaways site (now for sale), long-delayed Durango Station near Rhodes Ranch and a project in Reno.

Station's priorities changed constantly. Even before Aliante Station opened, Station was lobbying North Las Vegas for approval of a second nearby casino, Losee Station. In April, Station proposed "Viva," a $10 billion, 10,000-room metaresort on Tropicana Avenue that would outdo and outspend nearby CityCenter. Simultaneously, the company continued to buckle under its heavy debt burden in a bad economy, eventually going into bankruptcy. Whatever uncertainty surrounded Station's plans was only magnified.

"I think it will be MANY MANY years before [Station] does anything with Fisher Bros there," writes Union Gaming Group principal Bill Lerner in response to a CityLife e-mail. "That has plenty to do with current demand as well as avail[able] credit of course. I'm sure we share the same view on residential."

Hey, big spender

Even as both the economy and housing market deteriorated, Station upped the ante on Richfield Village houses. By the time of the final push in mid-2008, homes were going for $600,000 or more -- $800,000 in one case. But the jackpot was hit by the owner of unprepossessing 2809 Jamestown Way, who bought it in 2005 for $225,000 and flipped it to Station three years later for $950,000. By then, the median home price in the Vegas Valley had dropped to $225,000.

Even at those prices, one real estate agent thinks even a $1 million house was a bargain.

"Those [homes] you are talking about were quite important, so Station Casinos could abandon and vacate the property," says commercial realtor Tony Ricco, whose mother lives in Richfield Village. "It made a lot of sense for them to pay upwards of $3 million for some of these homes."

One resident is alleged to be holding out for 2-1/2 to 3 times as much.

"I have been told by several people that there were one or two holdouts and they were asking $7.2 million for their home," says Tarkanian, who says she's been told the Fertittas will just build around anybody left in the area.

Welcome to our 'park'

Martin eases her car to a stop at the corner of Wyandotte Street and Milo Way.

"There's our park," she sighs. Where five houses once stood is a shoulder-high wall, fronted by a narrow strip with four mulberry trees, landscaped with large, jagged rocks. "The benches they promised us, etc., they're kind of missing." Pointing out 2741 Milo Way, bought by Station at the same time, she says of some former renters, "They were raising goats and chickens in the backyard."

Not anymore.

"This is the area Palace Station patrols, so we don't have a lot of trouble back here," Martin says. Indeed, two very heavyset men are later seen in an unmarked white van, parked in the driveway of a vacant house. One carries a radio. Martin also praises landlord Property Group, saying, "If there are any problems, they are very quick."

Tarkanian defends Station's erection of the barrier, noting that the area was going "into disarray" and that the wall -- along with the roving security presence -- keeps out trouble. It also masks the backside of some Station-owned warehouses.

Even the seediest of the Station-owned homes is nothing compared to the "garbage house" abandoned on nearby Northam Street. Its driveway is covered in litter, derelict furniture and a thoroughly demolished automobile. Martin also points out that Station co-financed the gates that separate Palace Station from three Richfield streets, interdicting the tour buses that used to take shortcuts through her neighborhood.

Turning down Jamestown Way, she says, "This is all gone." When the last sale was recorded, in August 2008, Station had bought out everyone on Wyandotte Street, Jamestown Way, Palm Springs Way, Trona Street, plus the side of Wilmington Way facing Rex Bell. Pockets of resistance are confined basically to three homes on Milo Way.

One of those belongs to Phyllis Ricco, who's lived there 44 years. She moved to Las Vegas during a construction downturn that she likens to the current crisis.

"I was pregnant with my No. 2 son, Angelo. My boys were raised here and it's hard to sell. It's always been home. Can you imagine, after being in this house 45 years, moving? It scares me!" Recalling a time when her house was a favored hangout for neighborhood kids, Ricco says, "I'm having a hard time leaving the neighborhood even if everyone else has."

"She's a tough lady," Tony Ricco says of his mother. "She's been in the house a long time. She'll probably end up dying there. My mom's fine with it. She's been around the block a few times" and didn't think Station's project would happen. Nonetheless, she detailed her son to deal with the realtors who were "banging on my door."

"We were strongly encouraged to sell because if we didn't they were going to cut my mom out of the deal," Tony Ricco says. He adds that residents may have thought they were being pressured because they lacked experience with how commercial land assemblage is done. As for Phyllis Ricco's last stand, Tarkanian says, "The way they've got their plans, [Station would] have to buy that person" out of her house. That could prove a very lucrative payday for the Riccos ... if it ever comes.

An uncertain future

Neither Fisher Brothers nor its Las Vegas rental agent, Gloria Sota, would discuss the endgame for their unplanned surplus of houses. Leo Bidermann, the agent charged with turning a dime on commercial property like the row of empty storefronts that now faces Rancho and I-15, says, "They'll be there for a long time."

Fisher Brothers' timetable, he adds, has shifted several times already.

"Those dates continuously move, based on the economy. My direction is to continue to lease those [office spaces] up." As for redevelopment, he says, "It's no time soon, let's put it that way."

Station and Fisher Brothers, through realtor Carlos Rivera, are attempting to resell nine of the houses acquired in Station's $95 million spree. All lie outside the "L" in which Station intends to build. According to Tarkanian and others, the nine domiciles were purchased in hopes that residents displaced by Station "would want to swap or whatever it took to get moved into them," as a former resident puts it.

"But nobody did," adds Martin. "Nobody." (Rivera deferred queries to Station and Fisher Brothers.)

"The dumbing-down of the neighborhood was Station Casinos' doing, not ours," Kennedy laments. She figures that, when the time comes, Station will use eminent domain - bolstered by incident reports filed with Metro -- to take out the last few homeowners in its path. (Tarkanian disagrees.) Now she's ready to sell.

"If they want to pay me $500,000, I'll take it." Unfortunately for her, she lives outside the four-block area Station has sewn up.

The only losers in this saga may be the homeowners who didn't accept Station's money when they had the chance. As the former resident says, "Nobody else is buying," and the steep discounts at which Rivera is re-selling houses speak for themselves.

"Everybody is now is fairly happy," Martin says of those sellers who were able to buy new homes or put their children into college.

"Station Casinos, they hit a freakin' home run," in terms of what Richfield Village will be worth if developed commercially, Tony Ricco adds. "Some of these people were greedy," waiting out Station, "and they don't sell in time."

Even his mother entertains second thoughts.

"I'm thinking I should have taken it," she says of Station's lucre, "because the market has gotten so bad. But ... I'm comfortable. My eyesight's gotten bad and my hearing is not so well." Still, in her longtime home, "I can wander around in the dark because I know my way."

While Tarkanian has no idea of Richfield's eventual fate, she's still working with Station "because we want something for that community, too." The casino company, she adds, "committed money to Rex Bull to make it a world-class school" and since the master plan doesn't specify a casino, there's no danger of gambling impinging on the school.

"They can go pretty far away from Rex Bell with the land they have now," says the councilwoman, who thinks a new casino might go onto the former Scandia site. She adds that Fisher Bros. has also been receptive to improving the school, calling the developer both honest and "really, really community-oriented."

Neighborhood president Martin, who drives around with a trunkful of paint to obliterate any newfound graffiti, expects Station to be back with some new proposal once the economy improves.

"We just felt like these [realtors] needed to be stopped," she says of her partial victory. "There isn't any way to stop Station."

Despite that somewhat downbeat conclusion, Martin takes solace in advice given her by then-Councilman Michael McDonald: "Always be the [wheel] that's squeaking the loudest." She adds, "We've learned to make noise."