Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LAS VEGAS-The Nevada State Contractors Board has suspended the licenses of developer William Plise, his company Plise Development and its subsidiaries. The action was taken after Plise failed to respond to the board’s requests for additional information related to nine complaints regarding multiple projects. Plise, whose $2-billion City Crossing development here is in Chapter 11 bankruptcy, did not return a phone call seeking comment.

Specifics behind the suspensions won’t be made public until a hearing is held, Contractors Board spokesman Art Nadler tells GlobeSt.com. Generally, the complaints include two for possible project abandonment, one for failure to provide financial responsibility—which by itself is grounds for suspension—and six for owing money.

“The respondent has not attended administrative meetings or responded to a request for financial information,” states the letter, which states that Plise has a right to appeal the suspension at a hearing within 60 days if it requests one within 20 days. “The Board finds that the public health, safety or welfare imperatively requires the summary suspension of the license(s).”

In June, the Plise-controlled entity developing City Crossing—a planned 126-acre, 6-million-sf mixed-use development in Henderson, NV—filed for protection from creditors under Chapter 11 of the US Bankruptcy Code. The filing came shortly after it was unable to refinance the short-term loans related to the project. The loans matured on April 1 and total approximately $168 million, according to court documents. Plise’s bankruptcy filing prevents the foreclosure while City Crossing tries to refinance the debt.

The debt was obtained for the acquisition of the 15 parcels associated with the project, according to court documents. In seeking approval to enter Chapter 11 bankruptcy, City Crossing LLC said that given the financial wherewithal of William Plise, who personally guaranteed the debt, and the $72 million of existing equity in the land—it was valued at $240 million in April—the successful reorganization of the LLC and the completion of the project is highly likely. According to recent court filings, settlement talks regarding the reorganization plan are under way.

Plise’s proposed plan is to sell the development after an 18-month marketing period and, thereafter, to distribute the proceeds based on order of priority. In explaining its rationale, Plise says it is the most familiar with the project and the underlying property and therefore, is in the best position to effectively market the property. In addition, Plise argues that the value of the development can only be maximized if the City Crossing Project and the underlying real property are sold as an integrated project.

“Such a sale would permit the Debtor to preserve the property’s current entitlements—and their value—for creditors and to obtain a sale price based on the prospective value of the City Crossing Project, not just based upon the value of the underlying land,” states Plise in arguing for its plan. “If the Plan is not confirmed, the Lenders will likely foreclose upon their parcels at much reduced prices and much of the value of the City Crossing Project will be lost. In light of the foregoing, it is critical that the various parties work together to reach a successful and negotiated conclusion to the plan process.”

Plise requested a court-ordered settlement conference because of the number of creditors involved. The City Crossing project has four institutional lenders, an investor group lead by the previous landowner (Eliot Alper) and hundreds of individual lenders whose debts are serviced by Aspen Financial Services LLC and Clayton Mortgage LLC.

“These lenders have different goals and priorities and reaching agreement on a plan acceptable to all will require difficult negotiations,” states Plise in its request. “A settlement conference is the single best method for assuring that negotiations are productive, reasonable and occur in prompt fashion…[and] prior to the commencement of expensive, draining and inefficient litigation.”

During the marketing period, various affiliates of the Debtor that have guaranteed the short term loans owed by Plise to the Lenders would keep all property taxes, insurance and other carry costs (not including interest) current. The guarantors would also make certain adequate protection payments to Lenders that accept the Plan. In addition, the Plan prevents the Lenders from collecting upon the guarantees of the guarantors during the marketing period unless other creditors, not subject to the Plan, seek to attach the guarantors’ assets.

In explaining the bankruptcy in court documents, Plise states that short-term loans were a reliable way to finance development projects prior to the onset of the mortgage crisis. In essence, short-term loans could be refinanced on a yearly basis, which permitted the developer to tap into the equity in the underlying real estate and obtain favorable interest rates, according to the filing. In the current environment, the developer needs to replace its short-term financing with longer-term loans that will permit it to complete the project without seeking further financing.

“Mr. Plise has the financial wherewithal to make a substantial contribution to the Debtors reorganization, which will be essential to a successful reorganization,” states the original bankruptcy filing. “The Debtor will use the breathing space afforded it by the Bankruptcy Code to negotiate with the lenders to obtain [longer term financing] on a go forward basis.”

Site work for the development got underway last year at St. Rose Parkway and Executive Airport Drive last year and some $30 million of infrastructure work has since been completed. The first vertical phase was supposed to get under way this past summer and include an eight-story, 215,000-sf office building, 184 apartments, a 160-room boutique hotel and 175,000 sf of retail space. The general contractor is Chaparral Contracting, a Plise subsidiary that had its license suspended along with Plise itself.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.